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Annual Report 2017-18
1
CONTENTSChairman’s Message 05
Board of Directors 07
Directors’ Report 11
Annual Accounts
• Comments of the Comptroller & Auditor General of India 68
• Independent Auditors’ Report 69
• Financial Statement 94
Notice of AGM 156
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Chairman-cum-Managing Director Shri Ravindra Nath (Upto 30.09.2018)Directors • Smt.AlkaNangiaArora,JointSecretary,M/oMSME
On behalf of Board of Directors, it gives meimmense pleasure to welcome you to the 63rdAnnual General Meeting of “The National SmallIndustries Corporation Ltd. (NSIC)” an ISO9001:2015certifiedCompany.AttheoutsetIwouldlike to thank all stakeholders for the steadfastsupportandunwaveringconfidencereposedintheCompanythroughthickandthin.
Your Company’s Directors’ Report and AuditedAnnualAccountsalongwithAuditors’reportthereon,forthefinancialyearended31stMarch,2018,havebeencirculatedtoyouandIseekyourpermissiontotakethemasread.
Ishallconfinemyselftoverybrieflymentioningthesalient operating results of NSIC for the financialyear2017-18.NSICregistereditshighestbusinessturnover of Rs. 22,457 crores compared toRs. 20,622 crores during last year and the Profit(Before Tax and Provision for pay revision)amountedtoRs.175.33croreasagainstRs.165.07croreinlastyear.TheseresultsarecommendableinadifficultyearandprovethatyourCompanyhastheresiliencetorideoutdifficultsituationsandalsotobe firmly rooted through the storms - past andpresent.Difficult circumstancesbringout thebestinNSICians.
YourCompany’smanagementhasalwaysbelievedin value creation and maximizing shareholders’wealth. If we create value - profits, growth andreturnswillfollow.Incommemorationoftheprofitsearnedduringtheyear,yourBoardofDirectorshasrecommended thedividendofRs.28.37crore forthefinancialyear2017-18,subjecttotheapprovalof shareholders. I believe that, thanks to ourresilience,ourresultswillcontinuetogrowsteadilyandfairlyconsistently.
TheCompanyhasimplementedthepayrevisionforallitsemployees.ThiswillleadtoaboostofmoraleofNSICians.Thiswillhoweverleadtoanincreasein cost of operations. Therefore, it becomesextremely important that we work wholeheartedlyforincreasingtherevenuesandalsocutallwastefulandavoidableexpenditure.
With its long legacy, over the last 63 years of itsexistence, NSIC is continuously striving to assistMSMEs with its uniqueness by providing pool ofdiverse services in areas of Marketing, Finance& Technology and other support services. Therelevance of NSIC’s services and its servicedeliverytoMSMEsinthetougheconomicscenariowhichprevailedinthecountryduringtheyear,hasbeenacknowledgedbyvariousstakeholders.
WeinNSIChavealwaysrealizedthattheCorporationneedstomovewiththetimesandengagewiththeunlimitedchangesaroundit–unlimitedintermsofspirit, capabilities and opportunities and to createnewepicentersofgrowth.
I am truly proud to say that your Company isfirmly rooted in the soil of core values of EthicalConduct,FinancialPrudence&Propriety,Integrity,TeamWorkandCommitmentforsoundCorporateGovernancesystem.
India as a populous country on the thresholdof becoming an economic super power, facesthe acid test of whether it can take advantageof its demographic dividend by ensuring gainfulemployment to its youth. Employment generationhas been one of the most important objectivesof India, more-so in recent years, because jobcreation and opportunities for self-employmentand entrepreneurship-development are key to
Chairman’s Message
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meettherisingaspirationsof India’syouth.NSIC,through its IncubationCentre all over the countryis encouraging youth to become “Job Provider”insteadof“JobSeeker”.ManyStatesGovernmentshave approached NSIC to open up TechnologyCentre/IncubationCentrefortheiryouth.
Notonly in India,manycountrieshavealsobeenapproaching NSIC to share our experienceswith them in promoting entrepreneurship cultureamongst the youth in their countries leading toMSMEdevelopment.NSIConbehalfofGovernmentofIndiahasbeenestablishingIncubationCentreinvarious countries. So far, IncubationCentre havebeen set up in Burkina Faso, Egypt, Ethiopia,Rwanda,BurundiandGambia.
NSICalsosignedMOUwithSMECorp.Malaysiaand Small and Medium Business Corporation(SBC),SouthKorea for enhancing cooperation inthefieldofMSMEsbetweentwocountries.
Duringtheyear,severalCSRinitiativeshavebeenundertaken in various sectors like Education,Health,VocationalTraining,SafedrinkingwaterandEnvironmentsustainabilityetc.acrossthecountry.
NSIC has also been performing promotionalactivities as prescribed by the Ministry of MSMEfrom time to time which inter-alia includes,implementation of National Scheduled Caste andScheduledTribeHub (NSSH) to increasemarket
access and ensure higher participation of SC/STentrepreneursinpublicprocurementandtopromotecreationofnewenterprisesbySC/STentrepreneursacrossthenationandprovideleveragetoStandupIndiainitiative.
Acknowledgments
On behalf of the Board of Directors and everyNSICian,IwouldliketoplaceonrecordmysincerethankstoHon’bleMinisterofMicro,Small&MediumEnterprises,SecretarytotheGovernmentofIndia,Ministry of Micro, Small & Medium Enterprises,JointSecretary,DirectorsandotherofficialsoftheMinistryofMSMEfortheircontinuoussupportandreposingconfidenceinus.
On behalf of the Board of Directors I would liketo place on record our deep appreciation ofour partners & associates and bankers for theircontinuedsupportwhichhelpedNSICinrenderingadmirable services for the MSMEs across thecountry.
Iwould like to thankmycolleagueson theBoardandNSICiansfortheircommitmentandteamworktowardscontinuedgrowthofNSICand inmakingmystaywithNSICveryenjoyableandproductive.Thanks again for all your encouragement andsupport.
Ms. Alka Nangia Arora, Government Nominee Director is a post graduate from IIT – Roorkeeand joined IDAS - 1991 batch. On completion ofFoundationcourseanddepartmental training joinedas a Probationer at Ordinance Factory, Dumdum,Kossipore, Calcutta in January, 1993. Workedat Naval Pay Office, Mumbai as In-charge ofimplementation of 5th PayCommission. From 1991to2001workedasIn-chargeofAreaAccountsoffice,payandallowancesforEasternCommand,Kolkata.From2002-2005workedasFinancialAdviserNavalDockyard at Mumbai. In 2006-2009 as Director(Finance) with NTRO, an organization setup postKargil War for fast track procurement. From 2009-2013 was appointed as Additional CommissionerHandicraft, Ministry of Textiles. In 2011 was givenadditional charge of Managing Director, CottageEmporium. The company was in losses and laterturnedintoprofitmakingorganizationandwasgivenfull-fledgedMDcharge in2013.FromMay,2014 toJuly,2017workedasIntegratedFinancialAdvisertotheWesternAirCommandandArmyHospital(R&R).Frommid-July,2017hasassumedthechargeofJointSecretaryintheMinistryofMicro,SmallandMediumEnterprises.
Mr. Ravindra Nath, Chairman-cum-Managing Director is a Chartered Accountant and holdsBachelor’sDegreeinCommerce(Hons.).
Mr. NathhasmorethanthreedecadesexperienceinvariousareasofFinance/ Accountsandpolicyformulation and dealing with various issuespertaining to promotion, development andfinancing ofMicro, Small &MediumEnterprises(MSME). He has been involved in developingnew programs implemented through NSIC fordevelopmentofMSMEsinIndia. WhileworkingwithNSIC,hehasalsoexecutedvariousassignmentsinforeigncountriesforformulatingstrategiesandpolicies for the development of SMEs. He hasbeen conferred with “Outstanding LeadershipAward”forachievingBusinessExcellencethroughCreativity, Innovation & Entrepreneurship andduringhis tenureNSICreceived“FirstSwachhtaAward, 2017” under the most Cleanest Officecategory.
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Shri D.P.S. Negi, Government Nominee Director,IndianEconomicServiceOfficer1985Batch,hashadalonganddistinguishedcareer,havingheldvarioussignificantpositionsandroleswithintheGovernmentofIndia.HislongesttenurehasbeenwiththeMinistryof Housing & Urban Development, where he hasbeenthearchitectofflagshipprogrammeJuNURM&RajivAwasYojna{StreetVendorsAct&RealEstateRegulationAct (RERA)}andspearheadedmany forreaching housing and poverty alleviation schemes,benefittingseveralurbanpoorfamiliesinthecountry.Hehasalsomadehispresence in the internationalarena and has the honor of having been the soleIndian representative of the United Nations forum.TheInternationalCouncilforResearch&InnovationinBuilding andConstruction (CIB),where he couldexpress and voice the strengths and concerns ofthe Indian Building Industry to the internationalcommunityatlarge.FromNovember,2016hehasassumedthechargeofEconomicAdvisor(Finance),MinistryofMicro,Small&MediumEnterprises.
Mr. P. Udayakumar, Director (Plg. & Mkg.) holdsa degree in B.E. and did his Post-Graduation fromIndian Institute of Management, Bangalore. He hasaround28yearsofexperienceinPetroleum,Fertilizerand Small Medium Enterprise Sectors in variouscapacities.
Hehasbeenakeymemberofvarioustaskforceteamsand Strategic initiatives in different organisations.The National Small Industries Corporation hasstarted a separate business vertical for distributionof Petrochemical products under his guidance.He actively involved in development of Futuristicverticals in Defence Procurement, Logistics, IT andPublicProcurementfortheMinistryofMicro,Small&MediumEnterprises.Hehasbeenregularspeakerinpanel discussions in IIMRohtak,IICA,Manesar andothermanagement institutions.Hewas theMemberof the Technology Award Committee of GITA, aCII initiative. He contributed inputs to theOneManCommittee formed for revamping theMSMESectorunder the Chairmanship of Mr. Prabhat Kumar,Ex-CabinetSecretary.Healsoleddelegationstovariouscountries and addressed Round Table Conferenceon the Topic “Impact of SME Sector on the GlobalEconomy”inGuangzhou,ChinainOctober,2016.
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Professor Adya Prasad Pandey is an Indianeconomistandacademic.HeisM.A.(Economics),M.B.A.andPh.D.Heisappointedasnon-officialpart time Director in the Corporation w.e.f.25thJanuary,2017.HeservesasViceChancellorof Manipur University, Imphal. Prof. Pandeyhas been Head in Department of Economics inBanarasHinduUniversity,Varansi.Hehasmorethan37yearsofexperienceinacademics.HeisalsoNationalVicePresidentandLifeMemberofNationalSocialScienceAssociation.Prof.PandeyhasspecializationinIndustrialEconomics,LabourEconomics, Financial Management, CurrentEconomic Problems and Policies, Agricultural,Micro and Health Economics and MSME. Hehas published 3 Books more than 90 researchpapers in National and International Journals,havecompleted3MajorandOneMinorResearchProjects and have successfully guided 26 PhDResearch Scholars. His research works havebeen cited in various International and NationalResearch Journals and organizations includingWorldBankandUNDPreport.He isalsoexpertinvariousAcademicInstitutionsandGovernmentorganizations.
Mr. A.K. Mittal, Director (Finance) is a CharteredAccountant and holds a Bachelor’s degree inCommerce(Hons.).HeisalsofellowmemberofTheInstituteofCharteredAccountantsofIndia.Mr.Mittalhasmorethan38yearsofworkingexperiencein thePrivateSector,StateGovernment and in theCentralGovernmentPublicSectorUndertakings.HehasvastexperienceindealingwithBanks,National/ State level Cooperative Federations and variousState/CentralGovt.authoritiesforarrangingfinancialassistance to the Private Institutions, CooperativeSocieties and the Government owned Enterprises.HejoinedtheCorporationinMay,1996andheadedalmost all the Divisions of the Corporation viz.Finance, Business Development, Internal Audit,HumanResource, Exhibition,Technology, Vigilanceetc.He is also instrumental in assisting / formulatingstrategies and policies of the Corporation fordevelopment of MSMEs as well as growth of theCorporation.
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Dr. Ramesh BhatisanalumnusofHarvardandDelhiUniversity having 38 years of professionalandacademicexperience.Heiscurrentlyworkingas Provost and Dean of AACSB Accredited,School of Business Management, NMIMSUniversityMumbai.Hehasbeenon theBoardsofCorporationBank,BEMLLimited, ITI Limited,Ahmedabad Stock Exchange, Basic HealthServices and Advisor to the Human ResourceDevelopment Ministry, Government of India.His professional milestones include being aProfessor of Finance at the Indian Institute ofManagement, Ahmedabad (IIMA) from 1986 to2009andlater2014to2016,DeanoftheSchoolof Business Management, NMIMS University,MumbaiandAssistantDirectorat the InstituteofCharteredAccountantsofIndia,NewDelhi. Hehasbeenconsultantandadvisor toanumberoforganizationsinIndiaandabroad.Hehasworkedwithanumberoforganizationsinmanufacturing,infrastructure, services, healthcare, and logisticsindustries and his area of work has focused oncorporate finance, business valuation, financialandmanagementcontrolsystems,privateequityfinanceandhealthcarefinancing.
Ms. Geeta Gotiisawell-knownnameinHRConsulting,Corporate Governance & Labour Compliance.Shehasanoverall30yearsofexperienceworkingwith Government, Private Sector and NGOs. Herconsulting experience is across various companiesdealingwithAgriculture,Airlines,FMCG,Banking,ITservices&NGOsincountrieslikeUS,UAE,SriLankaapartfromIndia.
SheisM.PhilinPsychology,MSW(MastersinSocialWork)&LawGraduate.Currently,she ismentoringWomeninMfg.throughtheWomenergyAssociationofIncubatorsinMfg.(WEAIM).Ms.Geetahasworkedinthedevelopmentsectorslikehealthcare,womenwelfare,youthdevelopmentetc.ShefunctionedasNationalPresidentbyConfederationofWomenEntrepreneursofIndia(COWE)for2016-17,anNGOworkingonWomenEmpowerment.Presently, she is nominated as a 3rd partymemberontheInternalComplaintsCommittee(aCommitteeconstitutedunderPreventionofSexualHarassmentofwomenatworkplace)withInsurance,Manufacturing,InfrastructureandITcompanies.
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Dear Members,
YourDirectors’welcometheShareholdersandtakepleasure in presenting the 63rd Directors’ Reportof theCorporation alongwith the audited financialstatementoftheCorporationforthefinancialyearended31stMarch,2018.
1.0 Operating performance
NSIChascontinueditseffortsoffacilitatingMicro, Small & Medium Enterprises(MSMEs),duringthefinancialyear2017-18also, through integrated support servicesencompassing Marketing, Credit,Technology and other Services. Despitethechallengesbeing facedby theMSMEsector due to various factors, overallbusinessoftheCorporationhasreachedatanall-timehighlevelofRs.22,457croreascompared to Rs. 20,622 crore during thepreviousyear,recordingagrowthof9%.
During the year 2017-18, theCorporation
has earned Profit (Before Tax andProvision for Pay Revision) amounting toRs. 175.33 crore as against Rs. 165.07crorereportedinthepreviousyear.PBTfortheyear2017-18isRs.152.05croreafterabsorbing impact of Pay Revision (w.e.f.01.01.2017 for the employees under IDApatternand01.01.2016fortheemployeesunderCDApattern)amountingtoRs.23.28crore,implementedasperapprovaloftheGovernmentconveyedon03.05.2018.
TheBoardofDirectorsof theCorporationhas recommended a dividend@ 30% ofthenetprofitafter tax i.e.Rs.28.37croreforthefinancialyear2017-18.
The dividend recommended is subject tothe approval of the shareholders at theAnnualGeneralMeeting.
3.0 Other major highlights under various activities of the Corporation for the financial year 2017-18
3.1 Raw Material Distribution
NSIC plays the role of a major catalystin growth of Micro, Small & MediumEnterprises (MSMEs), by fulfilling theirrequirementofsteadyandtimelydeliveryoftheirrawmaterialsinrequisitequantitiesatthemostaffordableandcompetitiveprices.ThisnotonlyenhancesthecompetenceofMSMEs but also contribute in increasingtheirbusinessvolumes.
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During the FY 2017-18, NSIC servicedthe raw material requirements of MSMEsthrough supply of Iron & Steel fromM/s.Steel Authority of India (SAIL) & M/s.Rashtriya Ispat Nigam Limited (RINL),Aluminum fromM/s.NationalAluminiumCompanyLimited(NALCO),Paraffin WaxfromM/s.ChennaiPetroleumCorporationLimited(CPCL),CoalfromM/s.CoalIndiaLtd.(CIL),Polymer Productsi.e.PP,HDPE&LLDPEfromM/s. IndianOilCorporationLimited(IOCL),CementfromM/s.CementCorporation of India (CCI) and M/s. ACCCement.
TheCorporationhasaddedanothermain
producer i.e. M/s. Hindustan PetroleumCorporationLtd.(HPCL)forhandlingtheirBitumen&Emulsionmaterialbyopeninga new distribution center at Guwahatiunder its“Agency Sales Scheme”.Withthis,theCorporationnowhas37numbersofRawMaterialdistributingcentresacrossthecountry.
The total raw material distribution was12,57,272 MTs as against 11,35,788MTsduringthepreviousfinancialyear.
3.2 Single Point Registration Scheme (SPRS)
NSIC registers Micro and Smallenterprises (MSEs) under SinglePoint Registration Scheme (SPRS) forparticipation in Government purchases.The units registered under Single PointRegistrationScheme ofNSIC are eligibleto get the following benefits under PublicProcurement Policy for Micro & SmallEnterprises(MSEs)Order,2012asnotifiedbytheGovernmentofIndia:-
a. IssueofTendersfreeofcost; b. Exemption from payment of Earnest
MoneyDeposit(EMD); c. Price matching option to the MSEs
quotingpricebandofL-1plus15%; d. Issueofcompetencycertificate.
The revenue earned from Single PointRegistration Scheme (SPRS) during theyearwasRs.13.62crore.
Duringtheyear2017-18,4,502freshunitswereaddedand6,286unitswererenewed.20,102 live units were registered underSPRSason31stMarch,2018.NSICalsoaddedmoreinspectionagenciestoincreasethereachofSPRSamongtheMSEs.
3.3 Consortia & Tender Marketing
Micro & Small Enterprises (MSEs) arefacing constraints in procuring the largeorders when they bid for tender on theirowncapacityvis-à-vislargeenterprises.Inorder to alleviate this hurdle, NSIC formsconsortiaofsmallunitsmanufacturing thesame products, thereby pooling in theircapacity which provides comfort level toMSEsassuppliersandalsotobuyers.TheCorporation applies for tenders on behalfof consortia ofMSEsand secures ordersforbulkquantities.Theseordersare thendistributedamongstMSEsinlinewiththeirproductioncapacity.
Under the Tender Marketing Scheme,NSICfacilitatestheMSE(s)ineverystageoftenderactivityrightfromtheparticipationintenderstillexecutionoftenders.
During the year 2017-18, 638 tenderswereexecutedvaluingtoRs.228.98crore.Sevennumbersof consortiawere formedduringtheyear.
3.4 Credit Support to MSMEs
NSIC provides credit support for rawmaterial procurement by making thepayment to suppliers in Raw MaterialAssistance scheme against BankGuarantee.NSICalso facilitatesfinancingby providing assistance toMSMEs underschemes such as Tender Marketing,ExportsandBillDiscounting.
Further, to meet the credit requirementsof MSME units, NSIC has entered intoMemorandum of Understanding withNationalized and Private Sector Banks.Through syndication with these banks,NSICarranges for credit support (fundornon-fundbasedlimits)frombankswithoutanycosttoMSMEs.
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Credit facilitation of Rs. 6,373 crore wasmadeduringtheyear2017-18.
4.0 NSIC provides technical support to MSMEs through a number of TICs & LBIs spread across the country
4.1 NSIC provides the following technologysupportservicestoMicroSmall&MediumEnterprises through its eight “NSICTechnical Services Centres” (NTSCs)located at Okhla (New Delhi), Hyderabad(Telangana),Howrah(WestBengal),Rajkot(Gujarat), Chennai (Tamil Nadu), Rajpura(Punjab)Aligarh(UttarPradesh)&Neemka(Haryana):
i) Demand Driven Industries orientedtrainingin:
Hi-Techareas, Conventionaltrades
ii) Entrepreneurship Orientation Pro-gramme(EOP)
iii) Common Facility Services (Testingfacilities) through NABL accreditedlaboratories
Skill development (Capacity Development) NSIC Technical Service Centres are
presently offering Skill developmenttrainingon various streams in the linesoftherequirementby industriesandMaterialtesting facilities through NABL accreditedlaboratory.
The details of training courses running inthecentresareasunder:
iv) Information Technology: AdvanceSoftware Technology, ComputerHardware & Networking, ‘O’ Level,Computer Programming languages,Website Design & Development,Big Data & Hadoop, Python, SQLServer, Core Java, MCP-CCNA,Android Application, Advanced Java,Cloud Computing, C++ & OOPS,ComputerizedAccounting&TallyERPetc.
During Financial Year 2017-18 36,437trainees passed out through differenttechnicalcentres.
Someofthemajoractivitiesconductedby
NSICTechnicalServicesCentresare:
4.2 Placement Facilitation initiatives
NSICfacilitatesplacementtoitssuccessfultrainees by arranging Job Fairs in itscampus.DuringtheFinancialYear2017-18,25 Job Melas were organised for ourstudentsinwhichmorethan350companiesparticipated e.g. Havells, KelmensEngineering, Munjal Showa, Daikin, LNMAutoIndustries,AccurateEngineering,etc.are some to the major companies whichhave offered placements to our traineesduringouron-campusJobFairs.
4.3 Common Facility Services
Inadditiontotheskillandentrepreneurshipdevelopment, the center is offeringtesting facilities through NABLAccreditedlaboratoriestoindustries.
The details of testing facilities availablethroughthecentersaredetailedunder:
Center Testing facilities available
NewDelhi
FerrousandNonFerrousmaterials,Pipes,Steel wires, Building materials, Plastics,Wood&SoilandBitumentesting
Howrah Electrical Conductor, Wires and Cables,Insulators,MaterialTesting
Rajpura ElectricalAppliancesTesting
Chennai Calibration lab, Material Testing, PumpTesting,EnergyAudit
4.4 Association with Industry as “Knowledge Partners”
In addition to the ongoing activities, thecentres had taken initiative to makelinkages with industries with an aim tostrengthentheongoingtrainingprograms.Someofthelinkagesmadewithindustrieshavingagreedtosharetheirknowledgeonlatest technologies to the trainees are asunder:
Axis, CNC Wire cut EDM, CMM, ProfileProjector, Injection Moulding Machine,CNC Turning Centre, Vertical MachineCentre,CNCWirecutEDM,CNCTrainerLathe, CAD/CAM Software etc. weresuccessfullycommissionedand training&commonfacilityserviceshavestarted.
4.6 Association with Academic Institutions
NSIC-TechnicalServiceCentersdevelopedlinkageswithAcademicInstitutessoastofacilitate the students engaged with suchAcademic Institutes for practical trainingon the technologies deployed in NSIC-TechnicalServiceCenters.
In this direction, MoU was signed withinstitutes like Amity University, ThaparUniversity,VeltechUniversityetc.
4.7 Entrepreneurship Development through Incubation Centers
For taking advantageof the demographicdividendinthecountryandtoaddresstheissues of ‘job creation’ / ‘unemployment’,NSIChasintroducedanewinitiativecalled‘Incubation Program for Small EnterpriseDevelopment’. Through this initiative,NSIChascreatedopportunitiestoengagewith the youth in the country, to inculcatein thementrepreneurialskillsby impartingstructuredtrainingatitsIncubationCenters.
NSIC engaged in impartingentrepreneurship development trainingthrough their IncubationCentersatOkhla(New Delhi), Howrah (WB), Guwahati(Assam),Mandi(HP),Kolar(Karnataka).
These Incubation Centres providefacilities of hands-on training on workingprojects and also covering the theoreticalaspectsofbusinesssuchasbusinessskilldevelopment, identification of appropriatetechnology, project/product development,handsonexperienceonworkingprojects,opportunityguidanceincludingcommercialaspectsofbusinessesunderoneroofetc.At the end of the Training Program, thetrainee(s) is ripe enough to set up theirownsmallenterprise.Itis,thus,acompleteprocess of transforming a person from
‘unemployment’ to ‘self-employment’-‘Berozgar to Swarozgar’.AlternativelythetraineecangetemployedinIndustry.
In order to promote the concept of“Incubation Program for Small EnterpriseDevelopment” by setting up IncubationCenters across pan India, Ministryof MSME, Govt. of India launched ascheme called “Scheme for Promotionof Innovation, Entrepreneurship & AgroIndustry (ASPIRE)”. Under this scheme,NSIC set up six Livelihood BusinessIncubatorsatDeoria(UP)Rajkot(Gujarat),Kashipur(Uttrakhand),Naini(UP),Nawada(Bihar)andChennai(Tamilnadu).
4.8 Setting up Vocational Training Center (VTC) / Incubation Center (IC) in overseas countries
This model of NSIC’s Incubation Centrehasbeenwellappreciatedand is ingreatdemand in various developing countries.NSIC has established such IncubationCentres in Tanzania, South Africa andSenegal.
MinistryofExternalAffairs,GovernmentofIndia under India-Africa Forum Summit-I(IAFS-I),has requestedNSIC toestablishsuch Incubation Centres in 10 Africancountries. NSIC has already establishedincubation centre in seven countriesnamelyEthiopia,Burundi,Rwanda,BurkinaFaso,Gambia,ZimbabweandEgypt.TheIncubationCentre inMozambique is likelytobeoperationalduring2018-19.
NSIC by engaging with Senegal MilitaryDepartment has set up a training-cum-IncubationCentreatDakar,Senegalforthebenefitoftheex-servicemenofSenegaleseMilitary.
5.0 MSME Global Mart
With increase in competition and meltingaway of international boundaries, thedemand for information is reaching newheights. Today more and more B2B(Business to Business) companies aresearching the internet for direct deal,
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instantsearchingofbuyers/supplier,betterpricing, increased services and location-specificpartners.
Realizing the needs of MSMEs, NSICfacilitates E-Marketing Service effectivelyto MSMEs across the country. NSIC isassisting MSMEs through MSME GlobalMart Web Portal www.msmemart.com.The portal provides an online platform toB2B (Business to Business) marketingactivities. The portal hosts vast databaseof registered members who are lookingfor business opportunities, in terms ofsustainable partnership, sub-contractingand participation in Public Procurements.Themajorfeaturesofwww.msmemart.comare: Interactive database of MSMEs,GlobalandNationalTenderNotices,Self-Web Development Tool, Centralized MailSystem,PopularProductSection,UnlimitedGlobal Trade Leads, Trust Seal of NSIC,Multiple Language Support, DiscussionBoard, Call Centre Support, PaymentGatewayformembershipsubscription.
During the period 2017-18, 11,210 unitswere registered under B2B portal ascomparedto6160unitsinthefinancialyear2016-17,registeringthegrowthof82%andrevenueofRs.3.26crorewasearned.
6.0 Implementation of Government Schemes
TheCorporationisimplementingfollowingschemes on behalf of theGovernment ofIndia:
6.1 Marketing Assistance Scheme
Ministry of Micro, Small & MediumEnterprises through NSIC, has beenproviding marketing support to Micro &SmallEnterprises(MSEs)underMarketingAssistanceScheme.
To showcase the competencies ofIndian MSMEs, NSIC facilitates MSMEs’participations in National & InternationalExhibitions, Fairs, Buyer Seller meets,Intensive campaigns and marketingpromotion events etc. on concessionalterms under the Marketing AssistanceSchemeoftheMinistryofMSME.Throughparticipation in these events,MSMEs arealso facilitated to capture new marketsmakingthemgloballycompetitive.
During the year 2017-18, theCorporationparticipated / organized / co-sponsored95 exhibitions in India and participated in14 international exhibitions,wherein1050units participated. Further, 51 Vendor
Development Programs were organizedto facilitate MSEs, wherein 2197 unitsparticipated.
Apartfromabove,244marketingcampaignswere conducted to create awareness ofvariousschemes /activities for facilitatingMSMEs.
6.2 National SC-ST Hub (NSSH)
The National SC-ST Hub Scheme,launchedintheyear2016-17, isaimedatprovidingprofessionalsupporttotheSC/STentrepreneurs for their participation in thepublicprocurement,inadoptingapplicablebusiness practices and leveraging thestand-up India initiative. The followingspecialsubsidiestoSC/STenterprisesareprovidedthroughtheCorporation:
•100% subsidy on processing andinspection fees to obtain / renewRegistration under the single PointRegistration Scheme (SPRS) of NSICforgovernmentpurchasesonanominalpaymentofRs.100/-.
•100% subsidy for visit / participation indomestic/InternationaltradefairsunderSpecial Marketing Assistance Scheme(SMAS);
•Concession up to 90% in the fee forobtainingPerformanceandCreditRatingfrom the empanelled Rating Agencies.There isprovision forsubsidyupto50%ontherenewableofratingalso.
SpecialVendorDevelopmentProgrammes(SVDPs) are organized with an objectiveto provide a common platform for SC/STMSEsandbuyer organizations i.e.CPSE/CentralGovt.Departments.Morethan60SpecialVendorsDevelopmentprogrammeswere organized in FY 2017-18 in whichmore than 1800 SC/ST entrepreneursparticipated.
The Corporation set up 12 offices in2017-18, namely National SC/ST HubOffices (NSSHOs) at Agra, Bengaluru,Bhubaneswar,Chennai,Guwahati,Ranchi,Patna,Kolkata, Ludhiana,Mumbai,Pune
and Varanasi. These offices of theCorporation are exclusively working forcarrying out interventions under NSSHScheme inter alia to handhold the SC/ST entrepreneurs in e-tendering andfinancefacilitationthroughbanks/financialinstitutions.
Trainingprogrammesforcapacitybuildingof SC/ST entrepreneurs and youth havebeenfundedundertheSchemeatpremierinstitutions(i.e.IITs,IIMsandXLRI),SectorSkillCouncils,RSETIs,TechnologyCentresundertheO/oDevelopmentCommissioner(MSME) and NTSCs of the Corporation.More than 1,400 SC/ST entrepreneurs/youthhavebeenbenefitedthroughvariousshort-termtrainingprogrammes.
In order to reach out to the CPSEs forsensitizing them of their critical role infulfilling the mandate under the PublicProcurement Policy, 2012, a CPSEconclave was organised in SCOPEComplex New Delhi. Recognizing theIndustry Associations and Incubators asimportantstakeholders,aConfluencewasalsoorganisedatPravasiBhartiyaKendra,NewDelhi.Basedonthedeliberationsheldwith CPSEs, Industry Associations andIncubators,aneedwasfeltforamalgamatedeffortstobuildbetterecosystemattheStatelevel for augmenting the competenciesof SC/ST owned MSEs. Accordingly, 24state conclaves under NSSH Schemewere envisaged by the Ministry in 2017-18. 22 such Conclaves were organisedacross the country for bringing togetherthe SC/ST entrepreneurs, aspiring SC/ST entrepreneurs, CPSEs, IndustryAssociations, Financial Institutions andStateGovernmentonacommonplatformand deliberate upon steps required forincreasing the procurement from SC/ST MSEs. More than 10,000 SC/STentrepreneurs/youth have attended suchConclaves.
6.3 Performance & Credit Rating Scheme for Micro & Small Enterprises
Scheme” for Micro and Small Enterprises(MSEs). The purpose of scheme is toprovideatrustedthirdpartyopiniononthecapabilities and creditworthiness of theMicro and Small Enterprises. It createsawareness amongst Micro and SmallEnterprises (MSEs) about the strengthsandweakness of their existing operationsso as to provide them an opportunity toenhancetheirorganizationalstrengthsandcredit worthiness. The rating under thescheme is carried out by the accreditedrating agencies.An independent rating bythe accredited rating agency has a goodacceptance from the Banks / FinancialInstitutions, Customers / Buyers andVendors.UnderthisScheme,ratingfeesissubsidizedtoMSMEunits.Duringtheyear,3,003unitswereratedunderthescheme.
7.0 International Cooperation
The main objective of InternationalCooperation is to create awarenessamongst the MSMEs of India about theopportunities for developing technical orbusinessallianceswithenterprisesofothercountries. Activities undertaken are asfollows:
7.1 International Delegations
A Number of International delegationsvisited NSIC during the year 2017-18 forexploring the possibilities of cooperationwithNSICforthedevelopmentofMSMEsintheirrespectivecountries.Someofthemarementionedbelow:
a) Delegation from South Korea: ASouth Korean delegation comprisingofficialsofSmall&MediumBusinessCorporation and Small & MediumBusinessAdministration visitedNSICon20thJuly,2017andhelddiscussionsregarding mutual cooperation withNSICinMSMEsector.
b) Delegation from Tanzania: A 20member delegation led by Hon’bleMinister of Trade & Industry,Government of Tanzania visitedNSIC’s Rapid Incubation Centre at
New Delhi on 28th September, 2017andexpresseddesireforcooperationwith NSIC for developing MSMEs inTanzania.
c) Delegation from Ghana: Adelegationof Government officials from Ghanavisited NSIC’s Rapid IncubationCentre at Okhla, New Delhi on10th November, 2017 and showedkeeninterestintheconceptinitiatedbyNSIC for generating self-employmentopportunitiesforunemployed.
d) Delegation from Mauritius: Hon’bleMr. Soomilduth Bholah, Minister ofBusiness,Enterprises&Cooperativesof the Republic of Mauritius visitedNSIC Technical Services Centre atOkhla, New Delhi on 1st December,2017. Hon’ble Minister expressedhis keen desire for cooperation withNSIC for development of MSMEs inMauritius.
e) Delegation from Papua New Guinea: An eight member delegation led byH.E. Mr. Richard Maru, Minister ofNationalPlanning&MonitoringoftheRepublicofPapuaNewGuineavisitedNSIC’sAdvancedTrainingCentreandRapidIncubationCentreatNewDelhion14thDecember,2017inthecontextof development of self-employmentopportunities in PNG in cooperationwithNSIC.
f) Delegation from Jordan:AdelegationledbyH.E.Mr.AymaSafadi,ForeignMinister of Hashemite, Kingdomof Jordan visited NSIC-TechnicalServicesCentreatOkhla,NewDelhion29thDecember,2017.
g) Delegation from Kenya:Mr.SamuelK Tunai, Hon’ble Governor of NarokCounty of Republic of Kenya visitedNSICon13thJune,2018.Heobservedthat NSIC’s Rapid Incubation Modelis apt for bridging the skill gap andproviding suitable alternatives ofemployment to youth in Republic ofKenya.
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7.2 Signing of Memorandum of Understanding
a) NSIC Signs MoU with SME Corp. Malaysia: A Memorandum of Under-standingwassignedbyMr.RavindraNath,CMD,NSICandDr.HafsahHashim,CEO,SMECorp.Malaysia forcooperation in thefieldofMSMEsbetweenthetwocountries.Sh.GirirajSingh,Hon’bleMinisterofState(Independent Charge), Ministry of MSME,Government of India and Dr. MustapaMohamed, Minister of International Trade& Industry, Government of Malaysia,witnessed the signing of MoU. Coincidingwith the occasion, NSIC also organizedinteractivemeetingsbetween15Malaysianenterpriseswith50IndianMSMEs.
b) NSIC signs MoU with SBC, South Korea: NSIC signed a Memorandum ofUnderstanding (MoU) with Small andMedium Business Corporation (SBC) ofSouth Korea for enhancing cooperationamongstMSMEsofIndiaandSouthKorea.TheMoUwassignedinthepresenceofSh.GirirajSingh,Hon’bleMinisterofState(I/c),
MinistryofMSME,GovernmentofIndiaandMr. Jong Haak Hong, Hon’ble Minister ofSMEsandStart-ups,GovernmentofSouthKoreaonJuly10,2018.
A Technology Exchange Conference wasalso organized during the occasionwhereonetoonemeetingsof18enterprisesfromSouth Korea were organized with theirIndiancounterpartenterprises.
c) India-Korea Technology Exchange Centre established at NSIC: India-KoreaTechnologyExchangeCentre(IKTEC)wasinaugurated by Sh. Giriraj Singh, Hon’bleMinister of State (I/c), Ministry of MSME,Government of India and Mr. Jong HaakHong,Hon’bleMinisterofSMEsandStart-ups, Government of South Korea on July10,2018atNSIC’sTechnicalCentreinNewDelhi.IKTECwillassistIndianMSMEsandSouthKoreanenterprises to formalliancestobuild theircomplementarycompetenciesandbecompetitiveinglobalmarket.
8.1 NSIChasanetworkofofficesinNER.Thisincludes Branch Office at Guwahati andSub-Offices at Tinsukia (Assam), Imphal(Manipur), Dimapur (Nagaland), Itanagar(ArunachalPradesh),Shillong(Meghalaya)andAgartala(Tripura).
8.2 NSIC’s Incubation Programme is verysuccessfulintrainingbuddingentrepreneursin North Eastern States. Its IncubationCentre, Guwahati trained 164 traineesunder internal training,195 traineesundersponsoredtrainingand124traineesunderNSSH in various trades like FashionDesigning,FoodProcessing,Beautician&Candle Making. NSIC conducted trainingprogramme at Tripura in different tradesalso which is sponsored by differentGovernment departments under Govt. ofTripura. During the year 2017-18, 1216traineesweretrained.
8.3 TIC Guwahati has arranged Internationalbusiness visits for Nine WomenEntrepreneurs fromAssam to explore theIndustrialmodelinSouthAfricawithfocus
8.4 Other activities for the year 2017-18 inNorthEasternRegionareasfollows:-
Organizing Conclaves
• State SC/ST Conclave at Agartala, Tripura: On 29th December, 2017,a State Conclave was organized atPragyaBhavan,Agartalawith380SC/STparticipants.
• Regional SC/ST Conclave at Guwahati, Assam: On 12th January,2018, the State Conclave wasorganizedatGuwahati,Assamwith451participants.TheparticipantsbelongedtoallthedistrictsinthestatesofAssam& Meghalaya. The Conclave wasgracedbyShri.RaviCapoor, IAS, theAdditionalChiefSecretary,Departmentof Industries andCommerce,Govt. ofAssam.
• Special Awareness Program on SC/ST Hub Scheme: Shri. P.B Acharya,
Honorable Governor of NagalandgracedtheSpecialAwarenessProgramon the National SC/ST Hub scheme,which was organized by NSIC-GuwahatiinassociationwithMSME-DI,Dimapurwherein110peoplebelongingtoSC/STcommunitiesparticipated.
Exhibitions
• Inauguration of NSIC Pavilion: Shri.P.B Acharya, Hon’ble Governor ofNagalandinauguratedNSICPavilionintheNagalandInternationalTradeExpo2017 on 25th November, 2017. Therewere120participantsintheevent.
• 19th International Shillong Trade Fair 2018: The 19th International ShillongTradeFair2018(from9th-25thMarch,2018)wasinauguratedbytheChairmanof the Dorbarshnong (Headman) Mr.Pyllun and members of LaitumkhrahSport CulturalClub,Shillong. 43SC/STunitsfromAssamparticipatedunderSMASschemeintheFair.
• The 25th International Guwahati TradeFair 2018 ( from 1st - 18th February2018) was organized by Industriesand Trade FairAssociation ofAssam.The event was inaugurated by theBangladesh High Commissioner Shri.Syed Muazzem Ali. There were 120participantsincludingeightfromabroad.
• NSIC,underitsSMAShasparticipatedin the Sangai Festival which wasorganizedbythedepartmentofTourismand Commerce & Industries, Govt.of Manipur from the 21st -30th Nov.2017. The event was graced by theHon’ble President of India. NSIC hasfacilitated40SC/STunitsofManipurforparticipatingintheevent.
• NSIC,GuwahatihasparticipatedintheIndustrial&BusinessTradeFairUDYAM2017 (15-19 June, 2017) at ManiramDewanTradeCentre,Guwahati,whichwas organized by “Laghu UdyogBharati” with Dept. of Industries &Commerce,Govt.ofAssam,where150
unitsofNorthEastregionparticipatedinthisevent.
9.0 Management Discussion & Analysis
In terms of DPE guidelines, a separatereport on Management Discussion andAnalysisisattachedtothisreport.
10.0 Capital Structure & Borrowings
ThePaid-up-Capital of theCorporation isRs.532.99croreason31stMarch,2018.
The outstanding Long Term Loans(excludingcurrentmaturitiesofLongTermDebt) fromfinancial institutionsason31stMarch,2018isRs.54.10crore.
The short term borrowings of theCorporationason31stMarch,2018isRs.2051.14crore.
11.0 Issue of Commercial Paper
NSICforthelastthreeyearshasbeenraisingresources through issue of CommercialPaper, as short-term debt instrumentandmeeting its short term liabilities. TheCommercial Paper issued by NSIC wererated as CRISIL A1+ (pronounced asCRISILAOnePlus)ratingandSMERAA1+(pronouncedasSMERAOnePlus) ratingby CRISIL and SMERA rating agenciesrespectively. Debt Instruments with theseratings are considered to have “VeryStrongDegreeofSafety”regardingtimelypaymentoffinancialobligations.Duringtheyear 2017-18, theCorporation has raisedRs.1,000crorethroughCommercialPaper.
12.0 Investments As on 31st March, 2018, the Corporation
had 4,70,230 equity shares of Rs. 2/-each inM/s.Singer IndiaLtd.DividendofRs.0.75perequitysharewasreceivedfromM/s.SingerIndiaLtdfortheyear2017-18.
13.0 Fixed Deposit
The Corporation has not accepted anyfixed deposits and as such no amount ofprincipalorinterestwasoutstandingason31stMarch,2018.
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14.0 Human Resource Management
14.1 ThetotalmanpoweroftheCorporationason 31st March, 2018 was 814 as against830 in thepreviousyear.During theyear,cordial relations were maintained withvarious NSIC Employees Unions of theCorporation.
The break-up of the manpower was asfollows:
S.No.
Description As on31.03.2018
Ason31.03.2017
1. Managerial 519 485
2. Supervisory 132 158
3. Non-Supervisory
163 187
Total 814 830
NSIC extends a wide range of welfareactivities for itsemployees.These includehousebuildingadvance,vehicleadvance,computer advance, festival advance tounionizedemployees,medicalfacilitiesforserving and retired employees, employeeprovident fund, benevolent fund scheme,NSIC family Pension scheme in case ofdeathinharnessoftheservingemployees,free training to theeligibledependentsonthedeceasedemployeesinNSICtechnicalservicecenterasperthechoiceexercised,gift on completing 25 years of servicein the Corporation, Gift on retirementon attaining the age of superannuation,scholarship to the meritorious wards ofservingemployeesetc.Besides,theNSICEmployees Superannuation PensionSchemeforIDAemployeesisalsoinplace.
14.2 StaffTraining
NSICconductedtrainingforitsemployeesatHeadOfficeandfieldofficesacrossthecountry, in alignment with the changingbusiness needs, behavioral and technicalskillsoftheemployees.
NSIC conducted 25 in-house trainingprograms forNSICianson topicssuchasTraining of Trainers, Goods and ServiceTax, Health Management Program,
ISO 9001:2015 Standard and EnterpriseRiskManagement,AdvancedManagementProgram,InternalAuditorTrainingCourse,Disciplinary Proceedings & PreventiveVigilance, General Management Programetc. These focused programs provideimmense learnings with respect tobehavioralandtechnicalskillstoemployeesof all levels of NSIC in addition to keepthemupdatedonfunctionalschemes.
During the year 426 employees including360fromGroupAweretrained.
14.3 Policy for Prevention of Sexual Harassment
The Company has complied with theprovisions relating to the constitution ofInternal Complaints Committee underthe Sexual Harassment of Women atWorkplace (Prevention, Prohibition andRedressal)Act,2013toredresscomplaintsreceived regarding sexual harassment.All employees (permanent, contractual,temporary,trainees)arecoveredunderthispolicy.
During the year 2017-18, one complaintwasreceivedwhichhasbeendisposedoffaswithdrawn.
14.4 Particulars of Employees
NoneoftheemployeesoftheCorporationwere in receiptof remuneration inexcessof limits prescribed under Rule 5(2)of the Companies (Appointment andRemuneration of Managerial Personnel)Rules,2014.
14.5 Representation of SCs, STs, OBCs, Persons with Disability and Minorities
The directives of the Government issuedfrom time to time with regard to thereserved categories such as ScheduledCaste, Scheduled Tribe, Other BackwardClasses,andPersonswithDisability(PwD)arebeingfollowedbytheCorporation.The post based Reservation Rosters fordirectrecruitmentaswellaspromotionarebeingmaintainedwhicharedulyinspectedby the Liaison Officer for SC/ST/OBC oftheCorporationanddisplayedontheNSICIntranet.SC/STemployeesinGroupC&D
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posts are given one year relaxation intermsofeligibilityperiodinthetimesscalepromotion. Also, candidates belongingto SC/ST/PWD are given relaxation inthe marks in the selection against directrequirement.
The number of employees belonging toSC, ST, OBC, PwD & Minorities in theCorporationason31stMarch,2018areasunder:
ScheduleCastes 140
ScheduleTribes 20
OtherBackwardClasses 131
PersonswithDisability 26
Minorities 69
Total 386
15.0 National Entrepreneurship Day
NSIC Incubation Centres & LivelihoodBusiness Incubation Centres (LBIs)across the country celebrated “NationalEntrepreneurship Day” on 9th November,2017.Thethemeoftheeventwas‘CatalyzingaCulturalShiftinYouthEntrepreneurship’.
The event was attended and addressedby the representatives of organisationsassociatedinentrepreneurshipdevelopmentatregionallevelviz.DICs,Banks,IndustryAssociationsetc.
16.0 NSIC Celebrates Constitution Day
NSICcelebrated“ConstitutionDay”on26thNovember,2017alsoknownasSamvidhanDivas. On this day in 1949, ConstituentAssemblyofIndiaadoptedtheConstitutionofIndiawhichlatercameintoeffecton26thJanuary, 1950. Previously this day wascelebrated as “Law Day”. Shri GaurangDixit,ChiefGeneralManager(F&A),NSICtookthepledge.byrecitingthePreambletotheConstitution.
17.0 International Women’s Day, 2018
Ontheoccasionof“InternationalWomen’sDay 2018”, an interaction meet wasorganized for the Women EmployeeswithShriP.Udayakumar,Director(P&M)andShriA.K.Mittal,Director(Finance)on8th March, 2018. During the interaction itwas emphasized that womenmust sparesubstantial time for self-care, healthcareand last but not the least for making the
Vigilance is an integral part of themanagement function and assist inmaintaining integrity, purity and efficiencyoftheadministration.Vigilancedepartmentworks in cooperation with other divisions/ units of the Corporation at all levels.The vigilance department also works incoordination with the Central VigilanceCommission (CVC), the administrativeministryandtheCBI.
Preventivevigilanceinspectionsarecarriedoutbyvigilancedivisioninthevariousoffices/centersoftheCorporationforcurbinganywrongdoing/corruption.Thedepartmentaldisciplinary proceedings were conductedagainst the erring officials involved in thecases.
During the year 2017-18, “VigilanceAwarenessWeek”wasobservedfrom30thOctober,2017to4thNovember,2017asacampaignagainstcorruptionandtocreateits awareness amongst the employees,
clients and other stakeholders of theCorporation.
The theme of VigilanceAwarenessWeekwas “My Vision – Corruption Free India”. A pledge to bring integrity anderadicate corruption was administered toall the employees of the Corporation inall itsofficesatvariousplacesacross thecountry. Online IntegrityPledgehasalsobeenundertakenbytheemployeesof theCorporation.
The Immovable Property return of allthe officers of “A” & “B” category of theCorporationwereobtainedandactiontakenasfeltnecessarybasedonthescrutiny.
19.0 Corporate Social Responsibility Initiatives
A separate report on Corporate SocialResponsibilityinitiativesoftheCorporationformspartoftheAnnualReportisannexed.
20.0 Awards & Recognitions:
• NSIC Conferred with 1st Swachhta Awards, 2017
Shri Giriraj Singh, Hon’ble Minister ofMSME conferred NSIC Head Office with
• NSIC Conferred with “ET Now - CSR Leadership Award”
NSIC is conferred with “ET Now - CSRLeadership Award” at the Green FutureLeadership Awards held at Mumbai on18th Feb., 2018, acknowledging its CSRinitiatives in various activities like HealthCare andMedical assistance to divyangsand otherweaker sections of the society,Education, Safe Drinking Water, WomenEmpowermentetc.
• NSIC Conferred with “Outstanding Leadership Award”
Shri Ravindra Nath, Chairman-cum-Managing Director-NSIC was conferredwith “Outstanding Leadership Award” forachieving Business Excellence throughCreativity,Innovation&Entrepreneurshipatthe19thEditionoftheNationalManagementSummit on 24th Feb., 2018 held at NewDelhi.
21.0 Auditors
21.1 Statutory Auditors
TheComptroller&AuditorGeneralofIndiahasappointedM/s.KPMC&Associates,CharteredAccountants,GhaziabadastheStatutory Auditors for the financial year2017-18.TheStatutoryAuditorshavegiventheir report on the financial statementsof the Corporation for the financial year2017-18.
The Directors’ Replies to the StatutoryAuditors’Reportareannexed.
21.2 Secretarial Auditors
M/s. Sanjay Chugh, Practicing CompanySecretarieswere appointed to conduct theSecretarialAudit of theCorporation for thefinancial year 2017-18 in terms of section204oftheCompaniesAct,2013readwiththeCompanies(AppointmentandRemunerationofManagerial Personnel) Rules, 2014.TheSecretarialAuditReportforthefinancialyear2017-18formspartoftheDirectors’ReportandannexedtotheDirectors’Report.
Comments of the Comptroller & AuditorGeneralofIndiaundersection143(6)(b)oftheCompaniesAct,2013on thefinancialstatement are annexed to the AnnualReport.
22.0 Extract of Annual Return
In accordance with Section 134(3) (a) oftheCompaniesAct,2013,anextractoftheAnnualReturn in theprescribed format isannexed.
23.0 Internal Financial Controls
The Board has adopted the policies andprocedures for ensuring the orderly anefficient conductof itsbusiness, includingadherence to the Company’s policies,safeguardingofitsassets,theaccuracyandcompleteness of the accounting recordsand the timely preparation and reliablefinancial disclosures. For this internalaudit of all the field offices is carried out.In Raw material assistance against bankguarantee, several checks and balanceswere introduced to further strengthen thesystem including issuance of additionalguidelinesforconfirmationunderStructured
Financial Messaging System (SFMS)modeandremittanceofproceeds incaseofinvocationtoanominatedbankaccountat head office for effective monitoring ofutilization of funds and introduction ofnew improvised software for accountingofcreditsupportgivenunderRMAagainstBankGuarantee.
24.0 Citizens’ Charter
NSICiscommittedtoprovideefficientandpromptserviceon thebasisofobjectivity,transparencyandcourtesy indealingwithour citizens for thepromotionandgrowthof MSMEs. To inculcate these values intheemployees,NSIChascomeoutwithaCitizens’Charter.
25.0 Signing of Memorandum of Under-standing with the Government
NSIC signed a MoU with the Ministry ofMicro, Small andMedium Enterprises fortheyear2018-19.
The Corporation’s rating based on theresultsfortheyear2016-17is“VeryGood”.
Witha view toensureprogressiveuseofHindi in the Corporation, implementationof theprovisionsofOfficialLanguageAct,1963 and Rules framed thereunder andthe compliance of the directives of theOfficialLanguageDepartmentandMinistryofMSMEwere continued to be observedduring 2017-18. In addition, followingspecial activities were carried out duringtheyear toensure theprogressiveuseofHindi.
• Hindi Pakhwada (Fortnight) wascelebratedduring1st -15thSept.2017and six Hindi Competitions wereorganizedintheCorporation.Thefocusof thesecompetitionswas tomotivatetheemployeestoincreaseuseofHindiintheirday-to-dayofficialwork.
• “HindiDiwas”wascelebratedon14thSeptember, 2017 in the Corporationunder the Chairmanship of Director(P&M)inwhichHeadsofDepartmentsat Head Office & NCR officesparticipated.Onthisday,HindiDiwas
messageofHon’bleMinisterofState(Independent charge) forMSME andCMD, NSIC was read out.A specialtraining programme of google inputtool i.e. speech to text in Hindi andregionallanguageswasconductedforseniorofficersoftheCorporation.
• AnAnnual InspectionProgramme forOfficialLanguagewaspreparedforthevarious departments at Head OfficeandfieldofficesoftheCorporationandthesamewasimplemented.
• Hindi workshops were organizedregularly in which the training wasimpartedtotheofficer/employeesforincreasetheuseofHindiintheirday-to-day official work. Besides, OfficialLanguage awareness programmes /Hindiworkshopswerealsoconductedin subordinate offices during theirOfficialLanguageinspections.
• Outofthetotalamountearmarkedforpurchase of books more than 50%amountwas incurredonpurchaseofHindibooks.
Duringthereportyear,aHindicompetitionwas organized for the member PSU’s ofTownOfficialLanguageCommittee(Delhi)Upkram-2,wherein30officialsparticipatedfromvariousDelhibasedPSUsandcashprizes were given to the winners in thecompetition.
27.0 Particulars of Energy Conservation, Technology absorption
AsNSICdoesnothaveanymanufacturingactivities, the declaration of informationregarding conservation of energy &technology absorption is not required. Inlinewith thesuccessful implementationofroof top grid connected Solar System onNSIC Buildings at NewDelhi, Hyderabadand Chennai in the last year, during thisyear i.e. 2017-18,NSIChasawarded thecontract for the implementation of gridconnected rooftop solar photovoltaic (PV)systematNTSC-RajkotandNTSC-Howrahin order to promote energy Conservationthroughrenewableresources.
The Corporation has successfullyimplemented the Public ProcurementPolicy of the Government of India forprocurement from MSEs. The value ofgoods and services procured from Micro& Small Enterprises during the year wasRs. 55.95 crore.As against the target of20 per cent for procurement fromMSEs,thisprocurement fromMSEswas77.37%(previous year 60.69%) of the totalpurchasesmadebytheCorporation.
29.0 Foreign Exchange
Duringtheyear2017-18,theCorporation’sexpenditure in foreign currency wasRs. 260.05 lakh as compared toRs. 254lakhintheyear2016-17.
30.0 Quality Management System
Quality Management System ISO9001:2000inNSICwasestablishedduringtheyear2003.Initially,NSICwascertifiedunder ISO9001:2000 version,whichwasrevisedandupdatedintheyear2008withthe versionof ISO9001:2008, since thenNSIC has been implementing the revisedversionofthestandard.
Your Directors are pleased to informthat the Corporation has been upgradedto the latest version of certification ISO9001:2015.
31.0 Directors
During the year 2017-18, the followingchangeshavetakenplaceintheBoardoftheCorporation:-
a) Smt. Alka Nangia Arora, JointSecretary, Ministry of MSME wasappointedasOfficialpart-timeDirectorin the Corporation w.e.f. 26th July,2017.
b) Shri Manoj Joshi, Joint Secretary,MinistryofMSMEceasedtobeOfficialpart-timeDirectorw.e.f.26thJuly,2017.
c) Shri D.P.S. Negi, Economic Adviser,Ministry of MSME was appointed asOfficial part-time Director w.e.f. 10thNovember,2017.
Duringtheyear,fivemeetingsoftheBoardofDirectorswereheld.Inaddition, fiveAuditCommittee Meetings, three meetings ofCorporateSocialResponsibilityCommitteeand two Nomination & RemunerationCommitteeMeetingswereconvened.Thedetails of the meetings are given in theCorporateGovernanceReportwhichformspartofthereport.
32.0 Directors’ Responsibility Statement
Pursuant to the requirementunderclause(c) of sub-section (3) of section 134 oftheCompaniesAct,2013,with respect to
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Directors’ Responsibility Statement, it isherebyconfirmedthat:
• in the preparation of the annualaccounts, the applicable accountingstandardshadbeenfollowedalongwithproperexplanationrelatingtomaterialdepartures;
• theDirectorshadtakenproperandsufficient care for the maintenanceof adequate accounting records inaccordancewiththeprovisionsofthisActforsafeguardingtheassetsoftheCorporation and for preventing anddetectingfraudandotherirregularities;
• the Directors prepared the annualaccountsonagoingconcernbasis;
• the Directors had laid down internalfinancial controls to be followed bytheCorporationandthatsuchinternalfinancial controls are adequate andwereoperatingeffectively;
• the Directors had devised propersystems to ensure compliance withthe provisions of all applicable lawsandthatsuchsystemswereadequateandoperatingeffectively.
TheDirectorswould like todrawattentiononthedisclosure/explanationgiveninpara5ofNote35ofthefinancialstatementswithrespecttotheoutstandingduesrecoverablefromUnitedBankofIndia,Kolkata.
33.0 Corporate Governance
TheCorporationreceived“Excellent”ratingon compliance of Corporate Governance
AseparatereportonCorporateGovernanceforms part of the Annual Report and isannexed.
34.0 Acknowledgements
The Board of Directors wish to place onrecordtheirgratitudetotheHon’bleMinisterof Micro, Small & Medium Enterprises(MSMEs) for the help, guidance andsupportprovided.
The Board wishes to place on record itsappreciation for the valuable guidance &supportprovidedbytheSecretary,MinistryofMSME.
The Board also sincerely acknowledgesthe support, cooperation and guidancereceived from Ministry of Micro, Smalland Medium Enterprises and from otherMinistries and Government of India. TheDirectorsalsoacknowledgewiththanksthesupportreceivedfromJointSecretary,M/oofMSMEandAS&FA,MinistryofMSME.
The Directors also like to express theirsincere appreciation for the positivecooperation received from Company’sBankers, Financial Institutions and theyalsowishtothankall thestakeholdersforreposingtheirfaith,trustandconfidenceinourCorporation.
The Directors acknowledge the constantsupport and assistance received fromStatutoryAuditors,ComptrollerandAuditorGeneralofIndiaandMemberAuditBoard.
The Board of Directors also take thisopportunitytoplaceonrecordtheirsincereappreciation for thehardwork,dedicationandeffortsput inbyall theemployeesfordrivingNSICtowardsagloriousfuture.
TheNationalSmall IndustriesCorporationLtd. (NSIC), an ISO 9001:2015 certifiedGovernment of India Enterprise underMinistry of Micro, Small and MediumEnterprises (MSMEs), has been workingto fulfil its mission of promoting, aidingandfosteringthegrowthofMSMEsinthecountrysinceitsestablishmentin1955.
TheCorporationisclassifiedasMiniRatnaCategory-IPublicSectorEnterpriseunderthe administrative control of Ministry ofMicro, Small and Medium Enterprises,GovernmentofIndia.
Schemes of the Corporation: Schemesand servicesprovidedby theCorporationis detailed in the Directors’ Report. TheCorporation has registered office in NewDelhi.NSICoperatesthroughlargenetworkspreadsacrossthecountryhavingvariousofficesandeighttechnicalcentreslocatedat Chennai, Howrah, Hyderabad, Okhla(New Delhi), Rajkot, Rajpura, Neemka(Hariyana) & Aligarh. The Corporationhas set up incubation centres at Okhla(New Delhi), Deoria (Uttar Pradesh),Howrah (West Bengal), Guwahati, Kolar(Karnataka), Jubbal&Kanaid (HimanchalPradesh)andNeemka(Haryana).
II. Financial Performance
TheCorporationachievedgrossrevenueofRs.2,592.50croreasagainstRs.2,376.24crore in previous year.The revenue fromoperations was Rs. 2,535.82 crore asagainst Rs. 2,308.87 crore in previousyear. NSIC has continued its efforts offacilitating MSMEs, during the financialyear 2017-18 also, through integratedsupportservicesencompassingMarketing,Credit, Technology and other Services.DespitethechallengesbeingfacedbytheMSMEsectorduetovariousfactors,overallbusinessoftheCorporationhasreachedat
anall-timehighlevelofRs.22,457croreascompared to Rs.20,622 crore during thepreviousyear,reportingthegrowthof9%.
During the year 2017-18, theCorporationhas earned Profit (Before Tax andProvision for Pay Revision) amounting toRs. 175.33 crore as against Rs. 165.07crorereportedinthepreviousyear.PBTfortheyear2017-18isRs.152.05croreafterabsorbing impact of Pay Revision (w.e.f.01.01.2017 for the employees under IDApatternand01.01.2016fortheemployeesunderCDApattern)amountingtoRs.23.28crore,implementedasperapprovaloftheGovernmentconveyedon03.05.2018.
TheCorporationcontinued toplay its roleof facilitator to the MSMEs by facilitatingthemwith integrated support with specialfocusonmarketingsupport-rawmaterialdistribution(12,58,803MTs),creditsupport(Rs.6,373 crore), technology support-trainingactivities(37,459trainees).
The Corporation also continued toimplement the Government’s Schemesnamely Performance & Credit RatingScheme; Marketing Assistance Schemeto support marketing efforts of MSMEs);National SC-ST Hub, Assistance forTrainingInstitutionsandASPIREScheme.
The Board members has recommendeddividendofRs.28.37croresubject to theapprovalofshareholders.
III. Segment-wise Performance
NSIC’s activities are broadly classifiedinto ‘Promotional’ and ‘Commercial’. The‘Promotional’activitiesincludetheactivitiesfor which budgetary support is providedto the Corporation by the Governmentand / or its agencies. The schemesof ‘Marketing Assistance Scheme forMSMEs’, ‘Performance & Credit RatingScheme (PCRS) for Micro and Small
Annexure to Directors’ Report Point No. 9.0
Management Discussion & Analysis
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Enterprises’, ‘Assistance for Training toInstitutions’and‘NationalScheduleCaste–ScheduleTribeHub’(NSSH)etc.,forwhichbudgetary support has been provided tothe Corporation alongwith administrativeexpenditure restricted to the tune of 10%of the total expenditure under MAS and7.5%ofthetotalexpenditureunderPCRSand NSSH Scheme for implementationof such schemes, get reflected under the‘Promotional’activity.Theexpensestowardsorganization / participation in exhibitions(both domestic and international), buyersellers meet, intensive campaigns, othermarketingsupportservices(advertisement,publicityetc.),ratingofMSEsandtrainingexpenses are met out of the budgetarysupportprovidedfortheaboveschemes.
The‘Commercial’activitiesinter-aliainclude
the activities whereby the Corporationprovides ‘Marketing’ (including tender
marketing andRawMaterialDistribution),‘Credit’, ‘Technology’ and ‘other support’services to cater to the diverse needs oftheMSMEs.TheCorporation funds these‘Integrated’ support services. In addition,activities not met out of the budgetarysupportbutwhicharepromotionalinnature(sincecarriedoutwiththeintenttosupporttheMSMEs)aremergedwithcommercialactivitiesastheexpensesofsuchactivitiesarebornebytheCorporation.Accordingly,the activities of the Corporation havebeen divided into two segments namely“Commercial”&“Promotional”.
The following table presents the revenue,profit/(loss),assetsandliabilitiesinformationto the Business segments for the yearended 31st March, 2018 as required byAS-17on“SegmentReporting”issuedbytheInstituteofCharteredAccountantofIndia:
Description For the year ended 31/03/2018 For the year ended 31/03/2017A.PrimarySegment–
BusinessSegment Promotional Commercial Total Promotional Commercial Total
I. SEGMENT REVENUE
a. SegmentRevenue (includinggrant) 5709.71 253540.58 259250.29 6677.68 230945.85 237623.53
II. SEGMENT RESULTS
a. SegmentResults@ 0.00 9940.66 9940.66 0.00 10639.84 10639.84
b. OperatingProfitbeforeinterest 0.00 28428.88 28428.88 0.00 36257.05 36257.05
c. Priorperiod 0.00 (-)24.12 (-)24.12 0.00 15.82 15.82
d. InterestPaid 0.00 13340.85 13340.85 0.00 19748 19748
• NSIC is a national level organizationwith thehugeknowledgebaseaboutworking of MSME sector and havingpresence all over the country byhavingofficesin157locations.
• The Corporation offers integratedpackage of services, ranging fromfinancialsupport,marketing,technologyandinformationsupporttoMicro,Small&MediumEnterprises.
• TheCorporationhaslinkageswithMicro,Small &Medium industry organizations/ associations within the country andseveral partner organizations overseasfordevelopmentofMSMEsector in thecountry.
• The Corporation has proven trackrecord in the area of internationalcooperation in MSME sectordevelopmentandinstitutionalcapacitybuilding.
• The considerable asset base ofthe Corporation gives it an addedadvantage for expansion of itsactivities.
• A profit making, dividend payingCompany,with“AA+”ratingbyCARE.
• Notification and implementation of‘Procurement Preference Policy’for MSEs by the Government toincreaseparticipationofMicro&SmallEnterprisesinGovernmentpurchases.InadditiontoCorporation,someotheragencies have also been authorizedto register MSEs for GovernmentPurchase.
• Non-availabilityofthestatusof“PriorityLending” earlier given by ReserveBankofIndia.
c. Opportunities
• There is vast potential for servicesbeing offered by NSIC to MSMEswithinthecountryandaboard.
• International Cooperation, TechnologyTransferandInternationalConsultanciestodevelopingcountries.
• Availability of physical assets fordevelopmentofnewprojects.
d. Threats
• Competition from other national andstate level institutions in theareasofmarketing, technology support andfinancing pose a threat to the coreactivitiesoftheCorporation.
• State Governments preference tostate agencies over NSIC, for rawmaterialdistribution.
• Entry of large players due toglobalization poses challenges forMSMEsector.
NSICcarries forward itsmission toassistMSME with a set of specially tailoredschemes designed to put them in acompetitiveandadvantageousposition.
NSIChassignedvariousMOUstoachieveitstargetsandtoincreasethegrowthandprofitabilityof theCorporation.Toachievethe desired growth, NSIC is enhancingits capabilities to access Domestic andInternationalMarkets and for this,ProjectManagement and Implementation,Technology, Quality and CustomerSatisfactionhavebeenidentifiedasmajorthrustareas.
The Corporation plans to further explorethe new business opportunities in areasofMarketing, setupnewTechnologyandIncubation Centres to provide trainingto enhance the knowledge level and toincreasetheemploymentopportunitiesforunemployedyouth.
VI. Risks & Concerns
The Corporation regularly identifiesand reviews the risks which can be theoutcomeofregularbusinessactivitiesandtakesappropriate steps from time to timeto mitigate these risks. Themanagementis committed to further strengthen riskmanagement capabilities in order toprotect and enhance stakeholders’ value.The Corporation has devised the “RiskManagementPolicy”.
VII. Internal Control Systems
The Board has adopted the policies andprocedures for ensuring the orderly anefficient conductof itsbusiness, includingadherence to the Company’s policies,safeguarding of its assets, the accuracyand completeness of the accounting
records and the timely preparation andreliable financial disclosures. For thisregularinternalauditofallthefieldofficesiscarriedout. InRawmaterialassistanceagainst bank guarantee, several checksand balances were introduced to furtherstrengthen the system including issuanceof additional guidelines for confirmationunder Structured Financial MessagingSystem (SFMS) mode and remittanceof proceeds in case of invocation to anominated bank account at head officefor effective monitoring of utilization offunds and introduction of new improvisedsoftware for accounting of credit supportgivenunderRMAagainstBankGuarantee.
VIII. Developments in Human Resources, Industrial Relations front including number of people employed
HumanResourceisthemainassetoftheCorporation. Success of any organizationdepends upon the engagement andmotivation levels of its employees. TheHuman Resource division has played asignificant role in achieving the overallobjectives of building capability amongstpeople andmore importantly, involve andengageemployeesinvariousimprovementprogramsacrossthefunctionsforachievingimprovedresults.
Forthispurpose,varioustrainingprogramswere conducted as training is a learningprocess that involves the acquisition ofknowledge,sharpeningofskills,concepts,rules and changing of attitudes andbehaviors to enhance the performanceofemployees.NSIChasanexclusiveTrainingdivision which conducts and administerstrainingprogramsforall theemployeesofNSICacrossthecountry.
IX. Cautionary Statement
Statements in Management DiscussionandAnalysis describing theCorporation’sobjectives, projections, expectations,estimates are based on current businessenvironment. Actual results could differfromthoseexpressedorimpliedbasedongovernment policy decisions and futureeconomicenvironment.
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1.0 A brief outline of the Company’s CSR Policy, including overview of projects or programmes proposed to be undertaken and a reference to the web-link to the CSR Policy and projects or programmes:
TheCorporationalwaysstrivestointegrateits business values and operations inan ethical manner to demonstrate itscommitment to sustainable developmentof the various constituents of our Society.TheCSRcommitmentofNSICpositionsitssocialandenvironmentalconsciousnessasanintegralpartofitsbusinessplanandasasteptowardsthisdirectionhascommittedto strengthen the quality of life of under-privilegedsectionsofthecommunity.
The Corporation’s CSR Policy has beendesigned as per requirements of theCompanies Act and guidelines issued bythe Department of Public Enterprises andinsynchronizationwiththeaboveobjectiveof the Corporation. The diversified CSR
applicationsarespreadacrossthecountryintheneedspecificsectorslikeEducation,Health, Disability, Capacity Building andExpansionofHumanCapabilities.
TheCompany’sCSRPolicyincludingCSRinitiatives undertaken are available onCorporation’swebsiteatwww.nsic.co.in.
2.0 Health Care & Medical Assistance to Specially Abled and Other Weaker Sections of Society:
• Nine Medical Camps at Jalandhar,Phillaur, Kapurthala, Hoshiarpur,Amritsar,Gurdaspur,Pathankot,BatalaandTarnTaranwereorganized in thedistrict ofPunjab. 415 specially abledpersons were provided 441 artificiallimbs from these camps. In addition,Tricycles, Wheel Chairs, Crutches,Rollators, Elbow Crutches, AuxiliaryCrutches,WalkingStick, BrailleCaneetc.wereprovidedto144divyangsat
Annexure to Directors’ Report Point No. 19.0
Corporate Social Responsibility “Commitment for building a better tomorrow for our communities”
SiddipetdistrictofTelanganaand264divyangsatAhmedabaddistrict in theStateofGujarat.
• Health Camps were organized at tenvillages namely Ralawata, Peenglot,Khatoli,Singara,MohanPura,Raamnerki Dhaani, Cheetakheda, Salemabad,Sarana and Mangra in district Ajmer,(Rajasthan) focusing on awarenessbuilding on prevention of commonailments, promotion of hygiene &sanitation etc.Medicines and supportservicesofdoctorswerealsoprovidedtothe5,650poorvillagers.
• ReconstructiveSurgeries (RCS)wereperformed for 24 persons who wereaffectedbyGradeIIdeformitiesduetoleprosy at TLM Community Hospital,Shahdara,Delhi.
• NSIC organized 100 Eye Check-upcamps at Faridabad, Nuh, Mewat,Hatin, Hassanpur, Hodal (Haryana)and Kosi (Uttar Pradesh) and its
• NSIC organised eight Health Campsin different districts of Uttar PradeshnamelyDeoria,SuraulilPaikoliMarket,TarkulawaMarket,Bariyarpur,GurvaliyaMarket / Turkpatti, Jeurabazar,Salemgarh and Bisanpur Kala andCorrectiveSurgerieswereperformedof51childrenwithcongenitaldisability.
• Diabetes Treatment Camps for theweaker sections of the society inassociationwiththeGovernmentofDelhiatChhatarpurwereorganisedbyNSICwhere 570 diabetic and hypertensionpatientsweretreatedupon.
• NSIC provided chemotherapy(injection and medicines), radiodiagnosis, surgical needs, prostheticsandnutritionalandeducationalaidandothersupportservicestopoorchildrenforcancertreatment.37childrenbelowpovertylinesufferingfromcancerweretreatedatChennai.
Education is the key to the task of nationbuilding as well as to provide requisiteknowledgeandskillsrequiredforsustainedgrowthoftheeconomyandtoensureoverallprogress.
• NSIC provided assistance to theeducationcenterintheslumofDakshinPuri,NewDelhi to the primary schoolgoingchildrenwhereapproximately116childrenwerebenefittedineachmonth.
• NSICprovidedEducationalFacilities&Nutrition Supplements to the childrenof domestic workers / daily wagesworkers who are away from theirhomes. Under this initiative, total 98childrenwerebenefittedpermonth.
• NSIChassetupalibraryinKolarDistrict(Karnataka) where approximately 30studentsaretakingbenefitdaily.
Womenfaceeconomicandsocialchallengesin the society. Many women in weakersectionstrytoearnincomefortheirfamiliesbyundertakingworkafteracquiringcertainskills. In this perspective, NSIC providedvocational Training on Dress Designing &Tailoring (Skill Development Training) for180 women belonging to weaker sectionsatHudhkeshwar,Gondwana,Katol,Kharbi,Dighori andGodhni in theNagpurDistrict(Maharshtra).
6.0 Skill Development & Computer Training Centres for people with disabilities and other weaker sections of community
• NSIC provided vocational trainingprogrammesinComputerApplications,Tailoring,EnglishSpeaking,Personalitydevelopment, Music & Handicraftsat Jodhpur (Rajasthan) where 200divyangsstudentswerebenefitted.
• NSIC provided vocational training inthefieldofcomputerto442studentsinNewDelhi.Inaddition,theCorporationprovided running cost of IncubationCentre earlier setup by NSIC for the
training in Computer & BeauticianCourses.86Studentswerebenefittedunderthisprogramme.
• NSIC provided vocational trainingat Ludhiana (Punjab) in the field ofknittingindustryandunderthistraining81males&46femaleswerebenefitted.
7.0 The Composition of the CSR Committee
The Board has constituted the “CSRCommittee of the Board”. Presently, theCommittee has five members viz. Ms.GeetaGoti,Chairperson,Prof.A.P.Pandey,ShriRameshBhat,ShriP.UdayakumarandShriA.K.Mittal.
Others PANIndia 1,03,00,700/- 1,03,00,700/- 1,03,00,700/- Direct
TOTAL 3,28,13,136/- 3,02,94,769/- 3,02,94,769/-
Annual Report 2017-18
41
TheMembers,The National Small Industries Corporation Ltd.NSICBhawan,OkhlaIndustrialEstate,NewDelhi-110020
I have conducted the Secretarial Audit of thecompliance of applicable statutory provisions andtheadherencetogoodcorporatepracticesbyThe National Small Industries Corporation Limited(hereinafter called the Company). SecretarialAudit was conducted in a manner that providedusareasonablebasisforevaluatingthecorporateconducts/statutorycompliancesandexpressingouropinionthereon.
BasedonmyverificationoftheCompany’s books,papers,minutebooks,formsandreturnsfiledandother records maintained by the Company andalsothe informationprovidedbytheCompany, itsofficers, agents and authorized representativesduringtheconductofSecretarialAudit,weherebyreportthatinouropinion,theCompanyhas,duringtheaudit period covering financial year endedon March 31, 2018 (“Audit Period”) complied withthestatutoryprovisions listedhereunderandalsothat the Company has proper Board-processesandcompliance-mechanisminplacetotheextent,in themanner and subject to the reportingmadehereinafter:
Ihaveexaminedthebooks,papers,minutebooks,formsandreturnsfiledandotherrecordsmaintainedby the Company for the financial year ended onMarch 31, 2018accordingtotheprovisionsof:
i. The CompaniesAct, 2013 (theAct) and therulesmadethereunder;
ii. The Securities Contracts (Regulation) Act,1956(‘SCRA’)andtherulesmadethereunder;(Not applicable to the Company during the audit period);
iii. TheDepositoriesAct,1996andtheRegulationsand Bye-laws framed there under; (Not applicable to the Company during the audit period) ;
iv. ForeignExchangeManagementAct,1999andthe rules and regulations made there underto the extent of Foreign Direct Investment,Overseas Direct Investment and ExternalCommercial Borrowings; (Not applicable to the Company during the audit period)
v. The following Regulations and GuidelinesprescribedundertheSecuritiesandExchangeBoardofIndiaAct,1992(‘SEBIAct’):-
(a) TheSecuritiesandExchangeBoardofIndia(SubstantialAcquisitionofSharesand Takeovers) Regulations, 2011(Not applicable to the Company during the audit period) ;
(b) TheSecuritiesandExchangeBoardofIndia (Prohibition of Insider Trading)Regulations, 1992 (Not applicable to the Company during the audit period);
(c) The Securities and Exchange Board ofIndia (Issue of Capital and DisclosureRequirements) Regulations, 2009 (Not applicable to the Company during the audit period);
(d) The Securities and Exchange Board ofIndia(ShareBasedemployeeBenefits)Regulations, 2014 (Not applicable to the Company during the audit period);
(e) The Securities and Exchange Board ofIndia(IssueandListingofDebtSecurities)Regulations, 2008; (Not Applicable as the Company has not issued any debt securities);
Annexure to Directors’ Report Point No. 21.2
FORM No. MR-3
SECRETARIAL AUDIT REPORTFor The Financial Year ended on 31st March, 2018
(Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014)
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(f) The Securities and Exchange Boardof India (Registrars to an Issue andShare Transfer Agents) Regulations,1993 regarding theCompaniesActanddealingwithclient(Not applicable to the Company during the audit period);
(g) The Securities and Exchange Boardof India (Delisting of Equity Shares)Regulations,2009;and(Not applicable to the Company during the audit period);
(h) The Securities and Exchange Board ofIndia(BuybackofSecurities)Regulations,1998;(Not applicable to the Company during the audit period);
(i) Compliances / Processes / systemsincluding other applicable laws to theCompanyarebeingverifiedonthebasisof periodic certificate submitted to theBoardofDirectorsoftheCompany.
(j) OtherlawsapplicabletoCompanyare:-
(i) Guidelines issued by DepartmentofPublicEnterprises
(b) The Listing Agreement entered into bythe Company with the Stock Exchange,/SEBI (Listing Obligations and DisclosureRequirements) Regulations, 2015 (Not
applicable to the Company during the audit period)
During theperiodunder review theCompanyhascomplied with the provisions of the Act, Rules,Regulations, Guidelines, Standards, etc. asmentionedabove.
We further report that
• TheBoardofDirectorsoftheCompanyisdulyconstituted with proper balance of ExecutiveDirectors, Non-Executive Directors andIndependentDirectors.
• Thechanges in thecompositionof theBoardofDirectors that tookplaceduring theperiodunder reviewwere carried out in compliancewiththeprovisionsoftheAct.
• Adequate notice is given to all directors toschedule the Board Meetings, agenda anddetailed notes on agenda were sent at leastseven days in advance, and a systemexistsfor seeking and obtaining further informationandclarificationson theagenda itemsbeforethemeetingandformeaningfulparticipationatthemeeting.
• Resolutions were passed at all themeetingsby the requisite majority and there were noinstances of the dissentwhichwere requiredto be captured and recorded as part of theminutes.
I further report that there are adequate systemsandprocessesinthecompanycommensuratewiththesizeandoperationsofthecompanytomonitorandensurecompliancewithapplicablelaws,rules,regulationsandguidelines.
FOR SANJAY CHUGHCompanySecretary
Date:3rdAugust,2018 FCSNo:3754Place:NewDelhi C.P.NO.3073Note: This report is to be read with our letter of even date which is annexed as Annexure- A and forms an integral part of this report.
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43
Annexure “A”
To,TheMembers,The National Small Industries Corporation LimitedNSICBhawan,OkhlaIndustrialEstate,NewDelhi-110020
Ourreportofevendateistobereadalongwiththisletter.
1. MaintenanceofSecretarial record is theResponsibilityof themanagementof thecompany.Ourresponsibilityistoexpressanopiniononthesesecretarialrecordsbasedonouraudit.
2. We have followed the audit practices and processes as were appropriate to obtain reasonableassuranceabout the correctnessof the contents of theSecretarial records.The verificationwasdoneontestbasistoensurethatcorrectfactsarereflectedinsecretarialrecords.Webelievethattheprocessesandpractices,wefollowedprovideareasonablebasisforouropinion.
5. ThecomplianceoftheprovisionsofCorporateandotherapplicablelaws,rules,regulations,standards is the responsibilityofmanagement.Ourexaminationwas limited to theverificationofproceduresonrandomtestbasis.
III. Change in Promoters’ Shareholding (please specify, if there is no change) Thereisnochangeinpreviousyear’sshareholdingbetween01/04/2017to31/03/2018
SNo. Particulars
Shareholding at the beginning of the year
Cumulative Share-holding during the year
No. of shares
% of totalshares of
thecompany
No. of shares
% of totalshares of the
company
Atthebeginningoftheyear ….. …… …… ……
Date wise Increase / Decrease inPromoters Shareholding during theyearspecifyingthereasonsforincrease/ decrease (e.g. allotment / transfer /bonus/sweatequityetc.):
…..
……
……
……Attheendoftheyear ….. …… …… ……
IV. Shareholding Pattern of top ten Shareholders: (other than Directors, Promoters and Holders of GDRs and ADRs):
SNo.
For Each of the Top 10Shareholders
Shareholding at the beginning of the year
Cumulative Shareholding during the year
No. of shares
% of totalshares of the
company
No. of shares
% of totalshares of the
companyAtthebeginningoftheyear ….. …… …… ……
Date wise Increase / Decrease inPromoters Shareholding during the yearspecifying the reasons for increase /decrease(e.g.allotment/transfer/bonus/sweatequityetc):
…..
……
……
……Attheendoftheyear ….. …… …… ……
V. Shareholding of Directors and Key Managerial Personnel:
SNo.
Shareholding of each Directors and each Key Managerial Personnel
Shareholding at the beginning of the year
Cumulative Shareholding during the year
No. of shares
% of totalshares of the
companyNo. of shares
% of totalshares of thecompany
1.
At the beginning of the year
ShriRavindraNath,CMD,NSICLtd.
400 400
ShriS.N.Tripathi,AS&DC,MSME 200 200
ShriManojJoshi,JointSecretary,MSME 100 100
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2. Change in the shareholding - - -a) Transfer of 100 shares from
VIII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
TypeSection of the
Companies Act
Brief Description
Details of Penalty /
Punishment/ Compounding fees imposed
Authority [RD / NCLT/
COURT]
Appeal made,
if any (give Details)
A. COMPANYPenalty
NonePunishmentCompoundingB. DIRECTORSPenalty
NonePunishmentCompoundingC. OTHER OFFICERS IN DEFAULTPenalty
NonePunishmentCompounding
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Annexure to Directors’ Report Point No. 33.0
Report on Corporate GovernanceThe Corporation is always committed towardshigh standards in corporate ethics, transparency,disclosures,accountability&integrity.TheCorporateGovernanceadherenceoftheCorporationassistedinachievingitsgoalsandinmaximizingthewealthof its stakeholders. The Corporate Governanceframework encompasses practically every sphereof management, from action plans and internalcontrols to performance measurement andcorporatedisclosure.
The Board of Directors of the CorporationhasanoptimumcombinationofFunctional,Nominee and Independent Directors asstipulated in DPE guidelines. As on 31stMarch,2018,theBoardofDirectorshaseightmembers comprising of a Chairman-cum-ManagingDirector,twoFunctionalDirectors,twoGovernmentnomineeDirectorsandthree
non-official part-time Directors including aWomanDirector.
Board members are professionals fromdiverse fields having valuable experienceinManagement, Legal, Human Resources,Research, Economics, Administration andFinance.
2.0 Meetings of the Board
The meetings of Board of Directors wereheldatperiodical intervals.During theyear2017-18,fiveBoardMeetingswereheldon28th&29thMay,2017;26thAugust,2017;29thSeptember, 2017; 25th January, 2018 and27thMarch,2018.
Thedetailsofconstitutionof theBoardandthe number of Directorships held in otherCompanies as on 31st March, 2018, andtheirattendanceattheBoardMeetingsandAnnual General Meeting held during theyear,aregivenbelow:
S.No.
Name of the Director & DIN No. Category
No. of Board
Meetings attended
Attendance at the AGM held on 29th Sept.,2017
No. of outside
Director-ships
1.Shri Ravindra Nath as Chairman-cum-ManagingDirectorDINNo.02815496
The following Sub-Committee(s) of theBoardwereconstitutedasper thestatutoryrequirements consisting of executive andnon-executivemembers.ConsequenttothechangesintheBoard,thesesub-committee(s)oftheBoardwerere-constitutedbytheBoardofDirectors.
4.0 Audit Committee
The Audit Committee of the Board isconstituted as per section 177 of theCompanies Act, 2013 read with the DPEguidelines.
TheAudit Committee invites senior managementof the Corporation, as it considers appropriate(particularly the head of the finance function) &representativesoftheAuditorsatitsmeetings.
Role of the Audit Committee: The terms ofreferenceofAuditCommitteeareasfollows:
I. Oversight of the Company’s financialreporting process and the disclosure ofits financial information to ensure that thefinancial statement iscorrect, sufficientandcredible.
II. Recommending the appointment andremovalofexternalauditor,fixationofaudit
fee and also approval for payment for anyotherservices.
III. Reviewing with management the annualfinancial statements before submission totheBoard,focusingprimarilyon:
• Matters which are required to beincludedintheDirectors’ResponsibilityStatement of Board’s report and anychange in accounting policies andpractices.
• Major accounting entries based onexerciseofjudgementbymanagement;
• Review the Qualifications in draftaudit report and also the significantadjustmentsarisingoutofaudit;
IV. Reviewwith themanagement,externalandinternalauditors,adequacyofinternalcontrolsystems,adequacyofinternalauditfunctionincluding the structure of the internal auditdepartment, staffing and seniority of theofficial heading the department, reportingstructurecoverageandfrequencyofinternalaudit.
V. Discussionswith internalauditors regardingany significant findings and review thefindingsofanyinternalinvestigationsbytheInternalAuditorsintothematterswherethereisfraudorirregularitiesfoundandreportthesametotheBoard.
VI. Discussionwithstatutoryauditors/agenciesbefore the audit commences, nature andscope of audit as well as has post-auditdiscussiontoascertainanyareaofconcern.
VII. Review the Company’s financial and riskmanagementpolicies.
VIII. To look into the reasons for substantialdefaults in the payment to the depositors,debenture holders, shareholders (in case
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53
of non-payment of declared dividends) andcreditors,and
• Review the quarterly and half-yearlyfinancialstatementwithmanagement.
• Provide sufficient opportunity for theinternalandstatutoryauditorstomeetwith themembers of audit committeewith and / orwithout themembers ofmanagementpresent.
• Review the quarterly and half-yearlyfinancial statement with management,humanresources,successionplanning,recoverypositionandtrends,Repaymentof fixed deposits and payment ofstatutorydues.
IX. To review the follow-up action on the auditobservationsoftheC&AGaudit.
X. To review the follow-up action taken on therecommendations of Committee on PublicUndertakings(COPU)oftheParliament.
XI. Provide an open avenue of communicationbetween the independent auditors, internalauditorsandtheBoardofDirectors.
XII. Review all related party transactions inthe company. For this purpose, the AuditCommittee may designate a member whoshall be responsible for reviewing relatedpartytransactions.
5.0 Nomination & Remuneration Committee
Our Corporation being a GovernmentCompany, the appointment, tenure andremuneration ofDirectors is decided by thePresident of India. The remuneration paidto Chairman-cum-Managing Director andFunctional Directors during the year 2017-18wasasper termsandconditionsof theirappointment.IndependentDirectorsarepaidonly sitting fee as approved by the BoardwithintheceilingfixedundertheCompaniesAct, 2013 and also in accordance with theGovernment guidelines for attending theBoard Meetings as well as CommitteeMeetings. The Government NomineeDirectors do not draw any remuneration /
sitting fee for Board / Committee MeetingsfromtheCorporation.
Consequent to the change in the Board,theNomination&RemunerationCommitteewas re-constituted by the Board. Presently,the Committee has four members. All arenon-executive directors out of which threeare Independent Directors and one isGovernment Nominee Director. During theyear, the Remuneration Committee met on28thMay,2017and24thJanuary,2018.
Themainroleoftheremunerationcommitteeistodecide:
• PerformanceRelatedPay• Annual Bonus / variable pay and policy
for itsdistributionacross theExecutivesandnon-unionizedsupervisors,withinthescribedlimits.
6.0 Corporate Social Responsibility Committee
During the year, the Committee met threetimes on 28thAugust, 2017; 28th December,2017 and 24th January, 2018. Consequentto the changes in theBoard, theCorporateSocial Responsibility Committee was re-constituted by the Board. Presently, theCommitteehasfivemembersviz.Ms.GeetaGoti as Chairperson, Prof. A.P. Pandey,ShriRameshBhat,ShriP.UdayakumarandShriA.K.Mittal.
The Corporate Social Responsibility CommitteeoverseesCorporateSocialResponsibilitiesoftheCorporationandapproveCSRproject-wisebudget.TheCorporation hasCSRpolicy approved by theBoard.
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54
7.0 Write Off Committee
At present, the members of the Writeoff Committee are Shri Ramesh Bhat asChairman, Shri Ravindra Nath, Prof. A.P.Pandey and Smt. Geeta Goti as members.NoWriteoffMeetingwasheldduringtheyear2017-18.
8.0 Disclosures
As per DPE guidelines on CorporateGovernance and Companies Act, 2013 thefollowingdisclosuresaremade:
• Vigil Mechanism / Whistle Blower Policy
The Corporation has implemented a vigilmechanism through adoption of WhistleBlower Policy as per the compliance ofsection177oftheCompaniesAct,2013withanobjectivetoenableanyemployeestoraiseconcernsaboutanyorun-expectablepracticeandanyeventofmisconduct.Weaffirmthatno employee of the Corporation has beendenied access to theAuditCommittee.TheWhistle Blower Policy is available on thewebsiteoftheCompany.
• Code of Ethics and Business Conduct
AspertheCorporateGovernanceGuidelines,theCorporation has issued “Code of Ethicsand Business Conduct” for compliance andalsoposted thesameon thewebsiteof theCorporation.DirectorsoftheCorporationhaveaffirmedtheiradherencetotheprovisionsoftheCode.
The Board of Directors has appointed thefollowing persons as the “Key ManagerialPersonnel”oftheCorporationpursuanttotheprovisionsofSection203oftheCompaniesAct, 2013 and Rule(8) of the Companies(Appointment&RemunerationofManagerialPersonnel)Rules,2014.
S. No. Name Designation
1.ShriRavindraNath Chairman-cum-Managing
Director
2.ShriP.Udayakumar WholeTimeDirector
3. ShriA.K.Mittal WholeTimeDirectorandCFO
4.ShriGaurangDixit AsManager(KMP)
5. Ms.NishthaGoyal CompanySecretary&KMP
11.0 Declaration by Independent Directors
The Independent Directors has submittednecessarydeclarationaspersection149(7)of the CompaniesAct, 2013 and confirmedthattheysatisfythecriteriaofindependenceaslaiddowninsection149(6)oftheAct.
12.0 Related Party Transactions
Duringtheyear, therewerenorelatedpartytransactions,whichwasmaterialorsignificantandwhich could havepotential conflictwiththeinterestsoftheCorporation.
13.0 Risk Management Policy
BusinessRiskEvaluationandManagementisanon-goingprocesswithintheorganization.The Corporation has risk managementframework to identify,monitor andminimizerisks.
This fund would be utilized to meet outany financial loss under the Raw MaterialAssistanceSchemeagainstBankGuaranteearising due to investment becomingunsecuredasperthelaiddownguidelines.
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14.0 Details of compliance with the requirements of DPE Guidelines on Corporate Governance
Therequirementsof theDPEGuidelinesonCorporateGovernanceforCPSEshavebeenduly complied by the Corporation. In thisregard,acertificatefromM/s.KumarWadhwa&Company,PracticingCompanySecretaries,confirming compliance with the conditionsas stipulated under DPE Guidelines onCorporateGovernanceisannexed.
15.0 Material changes and commitments affecting the financial position of the Company
There have been no material changes andcommitments other than disclosed in thereport,ifany,affectingthefinancialpositionoftheCompanywhichhaveoccurredbetweentheendofthefinancialyearoftheCompanytowhich thefinancial statements relateandthedateofthereport.
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Comments of Statutory Auditors & Management Replies thereto on the Accounts for the Financial Year 2017-18
S. No. COMMENTS OF STATUTORY AUDITORS MANAGEMENT`S REPLY1. Report on the Financial Statements
WehaveauditedtheaccompanyingfinancialstatementsofThe National Small Industries Corporation Limited (“the Corporation”), which comprises oftheBalanceSheetasat31st March, 2018,theStatementofProfitandLoss,theCashFlowStatement,theStatementofProfitandLoss(Commercial)andthe Statement of Income and Expenditure (Promotional) for the year thenended,andasummaryofsignificantaccountingpoliciesandotherexplanatoryinformationoftheCorporation,inwhichareincorporatedfinancialstatementsofHeadOfficeauditedbyusand63branchofficesincludingtechnicalcentersaudited by other independent auditors appointed by Comptroller &AuditorGeneralofIndia.
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2. Management’s Responsibility for the Financial Statements
The Corporation’s Board of Directors is responsible for thematters statedinSection134(5)oftheCompaniesAct,2013(“theAct”)withrespecttothepreparationofthesefinancialstatementsthatgiveatrueandfairviewofthefinancial position, financial performance and cash flows of the Corporationin accordance with the accounting principles generally accepted in India,including theAccountingStandardsspecifiedunderSection133of theAct,readwithRule7oftheCompanies(Accounts)Rules,2014.Thisresponsibilityalso includes maintenance of adequate accounting records in accordancewiththepreparationoftheActforsafeguardingtheassetsoftheCorporationand for preventing and detecting frauds and other irregularities; selectionand application of appropriate accounting policies; making judgments andestimatesthatarereasonableandprudent;anddesign,implementationandmaintenance of adequate internal financial controls, that were operatingeffectively for ensuring the accuracy and completeness of the accountingrecords,relevanttothepreparationandpresentationofthefinancialstatementsthatgiveatrueandfairviewandarefreefrommaterialmisstatement,whetherduetofraudorerror.
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3. Auditor’s ResponsibilityOurresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.We have taken into account the provisions of theAct, the accounting andauditingstandardsandmatterswhicharerequiredtobeincludedintheauditreportundertheprovisionsoftheActandtheRulesmadethereunder.We conducted our audit in accordance with the Standards on AuditingspecifiedunderSection143(10)oftheAct.ThoseStandardsrequirethatwecomplywith ethical requirements and plan and perform the audit to obtainreasonableassuranceaboutwhether thefinancialstatementsare free frommaterialmisstatement.Anaudit involvesperformingprocedures toobtainauditevidenceabout theamounts and the disclosures in the financial statements. The proceduresselecteddependontheauditor’sjudgment,includingtheassessmentoftherisks of material misstatement of the financial statements, whether due tofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalfinancial control relevant to the Corporation’s preparation of the financialstatementsthatgiveatrueandfairviewinordertodesignauditproceduresthatareappropriate in thecircumstances.Anauditalso includesevaluatingtheappropriatenessoftheaccountingpoliciesusedandthereasonablenessoftheaccountingestimatesmadebytheCorporation’sDirectors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.We believe that the audit evidence we have obtained is sufficient andappropriatetoprovideabasisforourqualifiedauditopiniononthefinancialstatements.
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4. Basis for Qualified Opinion
AttentionisinvitedtoNote19andParaNo.5(b)ofNote-35inrespectofthefrauddetectedduringfinancialyear2016-17relatedtoBankGuarantees(BGs)amountingto₹17,350lakhsatthreeoffices(namelyKolkata₹10,550lakhs,SaltLake₹6,300lakhsandNTSCHowrah₹500lakhs)oftheCorporationinWestBengalauditedbyotherIndependentAuditorandfurthertoitabovementionedBGsamounting to₹17,350 lakhs received fromUnitedBankof India (UBI)againstadvancesgiventothepartiesunderRawMaterialAssistancescheme(RMA)whichwereinvoked,remainunpaidbythebanktilldate.Managementhas considered the total outstanding balance of ₹17,057.38 lakhs as goodand fully recoverable against theseBGs and no provision has beenmadeas the report of Questioned Documents Examination Bureau (QDEB) andForwarding Report dated 4thAugust 2017 submitted in the court by CrimeInvestigationDepartment(CID)confirmthattheBGsheldbytheCorporationwereoriginal.Achargesheet, in thematter,hasalreadybeenfiledbyCIDWestBengal.TheMinistry ofMSME (TheAdministrativeMinistry ofNSIC)afterexaminationofthestatusofthecaseandfindingsoftheQDEBReport,has takenup thematterwith thedepartmentofFinancialServices,MinistryofFinance (TheAdministrativeMinistryofUnitedBankof India)asking thelater to impressuponthebanktohonourNSIC’srightful invocationofBankGuaranteesworth₹17350lakhstogetherwithaccruedinterest.Managementsignifiedthattheyareofthefirmopinionthattheamountisfullyrecoverableandaccordinglyconsideredgood.However, lookingintothematterwhichisdependent upon theultimate findingsby the competent agenciesand theiroutcome,independentauditorofabovebranchesexpressedtheirinabilitytoquantify theprovisionrequired.WeatHeadOffice level,havenoadditionaldocuments/information to disagree with the opinion of the branch auditor.Hence, we are also unable to comment on quantum of provision requiredagainstoutstandingbalanceof₹17,057.38lakhsasat31stMarch2018.
The outstanding dues arebacked by the original bankguarantees,asconfirmedbytheCIDinitsQDEBReport.Further, the case is beingtaken up with the Ministryof MSME and Ministry ofFinance for early resolutionof the matter betweenNSIC and UBI. Hence, theprovisions have not beenmadeinaccordancewiththepolicyoftheCorporation.
5. Qualified Opinion
Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,exceptforthepossibleeffectsofthematterdescribedintheBasisforQualifiedOpinionparagraph, theaforesaidfinancialstatementsgive theinformationrequiredbytheActinthemannersorequiredandgiveatrueandfair view in conformitywith the accounting principles generally accepted inIndiaofthestateofaffairsoftheCorporationasat31stMarch2018,anditsprofitanditscashflowsfortheyearendedonthatdate.
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6. Emphasis of MatterWedrawattentiontothefollowingmattersintheNote-35tothefinancialstatements:a)Para-1 which, describes that the balances of Trade Receivables, Loans and
b)Para-5(a)¶-5(d)ofnote-35regardingdetectionof forgedbankguaranteesof₹2,100 lakhs received from thepartiesunderRawMaterialAssistance (RMA)schemebythemanagement.Loansandadvancesoutstandingason31stMarch2018of₹1,920.43lakhsagainsttheforgedbankguaranteeshavebeenconsideredasdoubtfuland100%provisionhasbeenmade.ThematterwasreferredtoCentralBureauofInvestigation(CBI)forfurtherinvestigation.
e)Para- 12 regardingpay revisionofBoard level andbelowBoard level andnon-unionized supervisors of CPSEs w.e.f. 01.01.2017 which was approved by theMinistryon3rdMay2018.Currentyearprovisionof₹2328.11lakhs,(PreviousyearNIL)OurOpinionisnotmodifiedinrespectoftheabovematter.Other MatterWe did not audit the financial statements/information of 63 (Previous Year 63)Branch Offices & Technical Centers included in the financial statements of theCorporation,whosefinancialstatements/financialinformationreflecttotalassetsof₹3,42,254.90lakhsasat31stMarch,2018(₹3,37,934.90lakhsasat31stMarch,2017) and total revenues of ₹ 2,54,952.15 lakhs (PreviousYear ₹ 2,29,676.62lakhs) for theyearendedonthatdate,asconsidered in thefinancialstatements.Thefinancialstatements/informationof thesebrancheshavebeenauditedbytheindependent auditorswhose reports have been furnished to us, and our opinioninsofarasitrelatestotheamountsanddisclosuresincludedinrespectofthesebranches,isbasedsolelyonthereportofsuchindependentbranchauditors.
Ouropinionisnotqualifiedinrespectofthismatter.
The cases of non-confirmationof balances is very negligible,however,observationsnotedfornecessarycompliance.
.
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7. Report on Other Legal and Regulatory Requirements1. As required by Companies (Auditor’s Report) Order, 2016 (“theOrder”),
issuedbytheCentralGovernmentofIndiaintermsofSub-section(11)ofSection 143 of theAct,we give in the “AnnexureA” a statement on thematterspecifiedinparagraph3and4oftheorder,totheextentapplicable.
2. AsrequiredbySection143(3)oftheAct,wereport,totheextentapplicable,that:a. We have sought and, except for thematters described in theBasis
for Qualified Opinion paragraph, obtained all the information andexplanations which to the best of our knowledge and belief werenecessaryforthepurposesofouraudit.
b. ExceptforthepossibleeffectsofthematterdescribedintheBasisforQualifiedOpinion paragraph above, in our opinion, proper books ofaccountasrequiredbylawhavebeenkeptbytheCorporationsofarasitappearsfromourexaminationofthosebooksandproperreturnsadequate for thepurposesofouraudithavebeen received from thebranches&technicalcentersnotvisitedbyus.
c. Thereportsontheaccountsofthebranchoffices&technicalcentersoftheCorporationauditedunderSection143(8)oftheActbyindependentauditorshavebeensenttousandhavebeenproperlydealtwithbyusinpreparingthisreport.
d. The Balance Sheet, the Statement of Profit and Loss, the Statementof Profit and Loss (Commercial) and the statement of Income andExpenditureAccount(Promotional)theCashFlowStatementdealtwithbythisReportareinagreementwiththebooksofaccountandwiththereturnsreceivedfromtheBranches&TechnicalCentersnotvisitedbyus.
e. ExceptforthepossibleeffectsofthematterdescribedintheBasisforQualified Opinion paragraph, in our opinion, the aforesaid financialstatements comply with the Accounting Standards specified underSection133oftheAct,readwithRule7oftheCompanies(Accounts)Rules,2014.
f. The matter described in the Basis for Qualified Opinion paragraphabove,inouropinion,mayhaveanadverseeffectonthefunctioningof theCorporationwhich is linkedwithoutcomeof investigationandthemanagementhasbeenintheprocessoftakingsuitableactionforredressalofthesamesincelasttwoyear.
g. In our opinion and to the best of our information and according totheexplanationsgiven to us, theprovisionsof section164(2) of theAct shall not apply to theCorporation, being aGovernment of IndiaEnterpriseinviewofnotification[F.No.1/2/2014-CL-V]dated5thJune2015ofMinistryofCorporateAffairs.
h. With respect to theadequacyof the InternalFinancialControlsoverFinancialReportingoftheCorporationandtheoperatingeffectivenessofsuchcontrols,refertoourseparateReportin“AnnexureB”.
i. WithrespecttotheothermatterstobeincludedintheAuditor’sReportinaccordancewithRule11oftheCompanies(AuditandAuditors)Rules,2014,inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous:
i. TheCorporationhasdisclosedtheimpactofpendinglitigationsonitsfinancialpositioninitsfinancialstatements–ReferNote34and35tothefinancialstatements;
ii. TheCorporation did not have any long-term contracts includingderivativecontractsforwhichtherewereanymaterialforeseeablelosses.
iii. TherewerenoamountswhichwererequiredtobetransferredtotheInvestorEducationandProtectionFundbytheCorporation.
(b) Themanagementduringtheyearhasphysicallyverifiedalltheassetsandthereisaregularprogrammeofverification,which,inouropinion,is reasonable having regard to the size of theCorporation and thenatureofitsassets.Nomaterialdiscrepancieswerenoticedonsuchverification.Asregardsfixedassetsonlease,wehavebeeninformedthattherehasbeenasystemofphysicalverificationincaseofdefaultcases&inrespectofothers;verificationisdone,ifnecessary.Wehavebeeninformedthatnoseriousdiscrepancyhavebeennoticedonsuchphysicalverification.
(c) According to the information&explanationsgiven tousandon thebasis of our examination of the records of the corporation, the titledeedsofthefollowingimmovablepropertiesarenotheldinthenameofthecorporation: (₹inLakh)
2 Flats at Branch OfficeMumbai 3660sqft. 5.87* 6.06*
*Figuresarewrittendownvalueasondate.
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(ii) As informed tous, in respectoffinishedgoods, rawmaterials,storeandspareparts,physicalverificationhasbeencarriedoutduringtheyearorattheendofyearbymanagement. Inouropinion, frequencyofverificationisreasonable.Nomaterialdiscrepanciesarenoticedonsuchverification.
(iv) Inouropinionandaccordingtotheinformationandexplanationsgiventousduringthecourseofaudit,theCorporationhascompliedwiththeprovisionsofSection186oftheCompaniesAct,2013inrespectofinvestmentofthecorporation. Further, the corporation has not granted any loans and hasnotgivenanyguaranteesandsecurityundertheprovisionofsection185ofthecompaniesAct,2013;therebytheprovisionofthesaidsectionisnotapplicabletothecorporation.
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(v) Accordingtotheinformationandexplanationsgiventous,thecorporationhas not accepted any deposits from the public during the year withinthemeaning ofSection 73 to 76 or any other relevant provisions of theCompanies Act, 2013 and the rules framed thereunder. Therefore, theprovisionofclause3(v)oftheOrderisnotapplicabletotheCorporation.
(vii) (a) TheCorporationisgenerallyregularindepositingundisputedstatutoryduesincludingProvidentFund,Employee’sStateInsurance,IncomeTax,SalesTax,ServiceTax,CustomDuty,ExciseDuty,Valueaddedtax, cess and any other statutory dues, as applicable, with theappropriateauthorities.Accordingtotheinformationandexplanationsgiventous,therewerenoundisputedamountspayableinrespectofabovestatutoryduesoutstandingon31stMarch,2018foraperiodofmorethan6monthsfromthedatetheybecamepayable.
(b) According to the information and explanations given to us, therearenoduesofSalesTax, IncomeTax,CustomsDuty,ExciseDuty,ServiceTax,ValueaddedTax,Cess,whichhavenotbeendepositedonaccountofanydisputeinvariousoffices,oftheCorporationasawholeason31stMarch,2018,exceptthefollowings:
(viii) Based on our Audit procedures and according to the information andexplanationsgiven tous,weareof theopinion that theCorporationhasnot defaulted in repayment of dues to a financial institutions, banks orGovernment.Corporationhasnotissuedanydebentures.
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(ix) Inouropinionandaccordingtotheinformationandexplanationsgiventous,thecorporationhasnotraisedmoneysbywayofinitialpublicofferorfurther public offer (including debt instruments) and the term loanswereappliedforthepurposeforwhichtheloanswereobtained.
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(x) According to the information and explanations given to us, nofraud by the corporation or any fraud on the corporation by itsofficers or employees has been noticed or reported during the year(except the cases referred to in Para-5 of Note 35 regarding detectionof fraudsduring the financial year 2016-17 related toBankGuarantees(BGs)amounting to₹17,350 lakhs (Outstandingadvancesof₹17,057.38lakhsasat31stMarch2017)receivedfromthepartiesunderRawMaterialAssistanceSchemewhichwereinvoked,remainunpaidbythebanktilldate.Noprovisionhadbeenmadeforthat.Further,fraudrelatedtodetectionofforgedbankguaranteeshavingoutstandingbalanceof₹1,920.30lakhs(netofadjustingamount received inMay2017)againstBGsvalueof₹2,100lakhsason31stMarch2017hadbeenconsideredasdoubtfuland100%provisionwasmadeinthepreviousyearitself.AllthemattershadalsobeenreferredtoCBI/CIDforfurtherinvestigations.)
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(xi) Inouropinionandaccordingtotheinformationandexplanationsgiventous,GovernmentCompaniesvideMCA’snotificationpublished inGazetteDt.5thJune2015,areexemptsfromtheapplicabilityofprovisionsofsection197 read with Schedule V to the CompaniesAct regarding managerialremuneration.
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(xii) Inouropinionandaccordingtotheinformationandexplanationsgiventous, the corporation is not aNidhiCompany.Therefore, theprovisionsofclause4(xii)oftheOrderarenotapplicabletotheCorporation.
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(xiii) In termsof the informationandexplanations sought byusandgivenbythemanagementandthebooksandrecordsexaminedbyusinthenormalcourseofauditandtothebestofourknowledgeandbelief,westatethattherearenotransactionswiththerelatedpartiesexceptremunerationpaidtokeymanagementpersonnel.Thedetailsofwhichhavebeendisclosedinthefinancialstatementsasrequiredbytheapplicableaccountingstandards.
ANNEXURE TO THE INDEPENDENT AUDITOR’S REPORTReport on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”).
S. No. COMMENTS OF STATUTORY AUDITORS MANAGEMENT`S REPLY
Wehaveauditedthe internalfinancialcontrolsoverfinancialreportingof THE NATIONAL SMALL INDUSTRIES CORPORARTION LIMITED (“theCorporation”) as ofMarch 31, 2018 in conjunctionwith our audit of thefinancialstatementsoftheCorporationfortheyearendedonthatdate.
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(i) Management’s Responsibility for Internal Financial ControlsThe Corporation’s management is responsible for establishing andmaintaining internal financial controls based on the internal control overfinancial reportingcriteriaestablishedby theCorporationconsidering theessential componentsof internalcontrolstated in theGuidanceNoteonAuditofInternalFinancialControlsoverFinancialReportingissuedbytheInstituteofCharteredAccountantsofIndia.Theseresponsibilitiesincludethedesign,implementationandmaintenanceofadequateinternalfinancialcontrolsthatwereoperatingeffectivelyforensuringtheorderlyandefficientconduct of its business, including adherence to Corporation’s policies,thesafeguardingofitsassets,thepreventionanddetectionoffraudsanderrors,theaccuracyandcompletenessoftheaccountingrecords,andthetimelypreparationof reliablefinancial information,as requiredunder theCompaniesAct,2013.
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(ii) Auditors’ ResponsibilityOur responsibility is to express an opinion on theCorporation's internalfinancialcontrolsoverfinancialreportingbasedonouraudit.WeconductedourauditinaccordancewiththeGuidanceNoteonAuditofInternalFinancialControlsOverFinancialReporting(the“GuidanceNote”)andtheStandardsonAuditing, issuedby ICAIanddeemed tobeprescribedundersection143(10)oftheCompaniesAct,2013,totheextentapplicabletoanauditofinternalfinancialcontrols,bothapplicabletoanauditofInternalFinancialControls and, both issued by the Institute of CharteredAccountants ofIndia.ThoseStandardsandtheGuidanceNoterequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetheradequateinternalfinancialcontrolsoverfinancialreportingwas established andmaintained and if such controls operatedeffectivelyinallmaterialrespects.Ourauditinvolvesperformingprocedurestoobtainauditevidenceabouttheadequacyoftheinternalfinancialcontrolssystemoverfinancialreportingand their operating effectiveness.Our audit of internal financial controlsover financial reporting included obtaining an understanding of internalfinancialcontrolsoverfinancialreporting,assessingtheriskthatamaterialweakness exists, and testing and evaluating the design and operatingeffectivenessofinternalcontrolbasedontheassessedrisk.Theproceduresselecteddependontheauditor’sjudgement,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our qualified audit opinion on theCorporation’sinternalfinancialcontrolssystemoverfinancialreporting.
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(iii) Meaning of Internal Financial Controls over Financial ReportingA Corporation's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding thereliabilityoffinancialreportingandthepreparationoffinancialstatementsfor external purposes in accordancewith generally accepted accountingprinciples.ACorporation'sinternalfinancialcontroloverfinancialreportingincludesthosepoliciesandproceduresthat(1)pertaintothemaintenanceof records that, in reasonable detail, accurately and fairly reflect thetransactionsanddispositionsoftheassetsoftheCorporation;(2)providereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancialstatementsinaccordancewithgenerallyacceptedaccountingprinciples,andthatreceiptsandexpendituresoftheCorporationare beingmade only in accordance with authorisations ofmanagementand directors of theCorporation; and (3) provide reasonable assuranceregardingpreventionortimelydetectionofunauthorisedacquisition,use,ordispositionoftheCorporation'sassetsthatcouldhaveamaterialeffectonthefinancialstatements.
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(iv) Inherent Limitations of Internal Financial Controls over Financial ReportingBecause of the inherent limitations of internal financial controls overfinancial reporting, including the possibility of collusion or impropermanagementoverrideofcontrols,materialmisstatementsduetoerrororfraudmayoccurandnotbedetected.Also,projectionsofanyevaluationoftheinternalfinancialcontrolsoverfinancialreportingtofutureperiodsaresubjecttotheriskthattheinternalfinancialcontroloverfinancialreportingmay become inadequate because of changes in conditions, or that thedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate.
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(v) Qualified OpinionAccording to the informationandexplanationsgiven tousandbasedonouraudit,thefollowingmaterialweaknesseshavebeenidentifiedasat31stMarch2018
1. AttentionisinvitedtoNote19andParaNo.5(b)ofNote-35inrespectofthefrauddetectedduringfinancialyear2016-17relatedtoBankGuarantees(BGs)atsomeoftheofficesoftheCorporationinWestBengalandfurtherto it total BGs amounting to ₹17,350 lakhs received fromUnited BankofIndia(UBI)againstadvancesgiventothepartiesunderRawMaterialAssistance scheme (RMA) which were invoked, remain unpaid by thebanktilldate.Managementhasconsideredthetotaloutstandingbalanceof ₹17,057.38 lakhs as good and fully recoverable against these BGsandnoprovisionhasbeenmadeasthereportofQuestionedDocumentsExaminationBureau(QDEB)andForwardingReportdated4thAugust2017submitted in thecourtbyCrime InvestigationDepartment (CID)confirmthattheBGsheldbytheCorporationwereoriginal.Achargesheet,inthematter,hasalreadybeenfiledbyCIDWestBengal.TheministryofMSME(TheAdministrativeMinistryofNSIC)afterexaminationofthestatusofthecaseandfindingsoftheQDEBReport,hastakenupthematterwiththedepartmentofFinancialServices,MinistryofFinance(TheAdministrativeMinistryofUnitedBankofIndia)askingthelatertoimpressuponthebankto honourNSIC’s rightful invocation ofBankGuaranteesworth ₹17350Lakhstogetherwithaccruedinterest.Managementsignifiedthattheyareof thefirmopinion that theamount is fully recoverableandaccordinglyconsidered good.However, looking into thematterwhich is dependentupontheultimatefindingsbythecompetentagenciesandtheiroutcome,we are unable to comment on quantum of provision required, if any,againstoutstandingbalanceof₹17,057.38lakhsasat31stMarch2018.
3. Theprocedureforreviewoffinancialstatements/accountsoftheborrower,inspectionoftheunits,periodicalconfirmationofbalances,renewaloflimitsanctioned to the units and review of outstanding balances exceeding360dayson timelybasisunderRawMaterialAssistanceschemewerenot effectively implemented/monitored. However, the entire procedurehasbeenreviewedandrevisedbythemanagementinthelightoftheseweaknesses toensure thateffectivestepsare inplaceand thevariouschecks/controlsprovided,areoperatingeffectively.Inourview,theInternalFinancialControlarerequiredtobemonitoredandreviewedperiodically.
4. InternalcontrolneedsfurtherstrengtheninginrespectofimplementationofriskmanagementandsystemstoensurecontinuedimplementationofCorporation’s riskmanagement policy and strategy and documentationthereof,criticalreviewandrefreshprocessonanongoingbasis.Moreover,to avoid any manual intervention in the preparation and reporting offinancials,anintegratedaccountingpackageneedstobeimplemented.
5. Budgeting needs further improvement. No budget was prepared byH.R.Division for recruitments throughopenmarketbasedon thecadre/ post wise vacancies available, which should be prepared by the topmanagementatthecommencementofFinancialYear.
The outstanding dues arebacked by the original bankguarantees, as confirmed bythe CID in its QDEB Report.Further, the case is beingtaken up with the Ministry ofMSMEandMinistryofFinancefor early resolution of thematterbetweenNSICandUBI.Hence,theprovisionshavenotbeenmadeinaccordancewiththepolicyoftheCorporation.
Nocommentsrequired.
Observationsnotedfornecessarycompliance.
Observationsnotedfornecessarycompliance
Observationsnotedfornecessarycompliance
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(vi) In our opinion, to the best of our information and according to theexplanations given to us, except for the effects/possible effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Corporation has maintained, in all materialrespects,adequate internalfinancialcontrolsoverfinancial reportingandsuch internal financial controls over financial reporting were operatingeffectivelyasofMarch31,2018basedon“theinternalcontroloverfinancialreportingcriteriaestablishedbytheCorporationconsideringtheessentialcomponents of internal control stated in theGuidanceNote onAudit ofInternalFinancialControlsOverFinancialReportingissuedbytheInstituteofCharteredAccountantsofIndia”.
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CORPORATE GOVERNANCE COMPLIANCE CERTIFICATE
To
TheMembersThe National Small Industries Corporation Limited
WehaveexaminedthecomplianceofconditionsofCorporateGovernanceofThe National Small Industries Corporation Limited,fortheyearended31stMarch,2018asstipulatedintheGuidelinesonCorporateGovernance forCentralPublicSectorEnterprises (CPSEs) issuedbyMinistryofHeavy IndustriesandPublicEnterprises,DepartmentofPublicEnterprises,GovernmentofIndia.
The compliance of conditions of Corporate Governance is the responsibility of the Management. OurexaminationwaslimitedtoareviewoftheproceduresandimplementationsthereofadoptedbytheCompanyforensuringcompliancewiththeconditionsofCorporateGovernanceasstipulatedintheGuidelinesonCorporateGovernanceforCentralPublicSectorEnterprises(CPSEs)issuedbyMinistryofHeavyIndustriesandPublicEnterprises,DepartmentofPublicEnterprises,GovernmentofIndia.ItisneitheranauditnoranexpressionofopiniononthefinancialstatementsoftheCompany
COMMENTS OF THE COMPRTOLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6) (b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF THE NATIONAL SMALL INDUSTRIES CORPORATION LTD. FOR THE YEAR ENDED 31ST MARCH, 2018
I, onbehalfof theComptrollerandAuditorGeneralof India,haveconductedasupplementaryauditofthe financial statements of THE NATIONAL SMALL INDUSTRIES CORPORATION LTD. for the yearended31March,2018undersection143(6) (a)of theAct.Thissupplementaryaudithasbeencarriedout independentlywithoutaccess to theworkingpapersof thestatutoryauditorand is limitedprimarilyto inquiriesof thestatutoryauditorandcompanypersonnelandaselectiveexaminationofsomeof theaccountingrecords.
The Members of The National Small IndustriesCorporationLimited
Report on the Financial Statements
We have audited the accompanying financialstatements of The National Small Industries Corporation Limited (“the Corporation”),whichcomprisesoftheBalanceSheetasat31st March, 2018, theStatementofProfitandLoss, theCashFlow Statement, the Statement of Profit andLoss (Commercial) and theStatement of Incomeand Expenditure (Promotional) for the year thenended, and a summary of significant accountingpolicies and other explanatory information of theCorporation, in which are incorporated financialstatements of HeadOffice audited by us and 63branchoffices including technical centersauditedby other independent auditors appointed byComptroller&AuditorGeneralofIndia.
Management’s Responsibility for the Financial Statements
TheCorporation’sBoardofDirectorsisresponsiblefor the matters stated in Section 134(5) of theCompanies Act, 2013 (“the Act”) with respect tothepreparationof thesefinancial statements thatgivea trueand fair viewof thefinancialposition,financial performance and cash flows of theCorporation in accordance with the accountingprinciples generally accepted in India, includingtheAccountingStandardsspecifiedunderSection133oftheAct,readwithRule7oftheCompanies(Accounts) Rules, 2014. This responsibility alsoincludes maintenance of adequate accountingrecords inaccordancewith thepreparationof theActforsafeguardingtheassetsoftheCorporationand for preventing and detecting frauds andother irregularities; selection and application ofappropriateaccountingpolicies;makingjudgmentsand estimates that are reasonable and prudent;and design, implementation and maintenanceof adequate internal financial controls, that wereoperatingeffectivelyforensuringtheaccuracyandcompletenessof theaccounting records, relevanttothepreparationandpresentationofthefinancialstatements thatgivea trueand fairviewandare
free from material misstatement, whether due tofraudorerror.
Wehave taken intoaccount theprovisionsof theAct, the accounting and auditing standards andmatters which are required to be included in theauditreportundertheprovisionsoftheActandtheRulesmadethereunder.
We conducted our audit in accordance with theStandards on Auditing specified under Section143(10) of theAct.ThoseStandards require thatwecomplywithethicalrequirementsandplanandperformtheaudit toobtainreasonableassuranceabout whether the financial statements are freefrommaterialmisstatement.
An audit involves performing procedures toobtain audit evidence about the amounts andthe disclosures in the financial statements. Theprocedures selected depend on the auditor’sjudgment,includingtheassessmentoftherisksofmaterialmisstatementof thefinancialstatements,whether due to fraud or error. In making thoserisk assessments, the auditor considers internalfinancial control relevant to the Corporation’spreparationofthefinancialstatementsthatgiveatrueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstances.Anauditalsoincludesevaluatingtheappropriatenessoftheaccountingpoliciesusedand the reasonablenessof the accounting estimates made by theCorporation’sDirectors,aswellasevaluating theoverallpresentationofthefinancialstatements.
We believe that the audit evidence we haveobtainedissufficientandappropriatetoprovideabasisforourqualifiedauditopiniononthefinancialstatements.
(BGs) amounting to ₹ 17,350 Lakhs at threeoffices(namelyKolkata₹10,550Lakhs,SaltLake₹ 6,300 Lakhs and NTSCHowrah ₹ 500 Lakhs)of the Corporation in West Bengal audited byother IndependentAuditorand further to it abovementionedBGs amounting to ₹17,350 lakhs rec-eived from United Bank of India (UBI) againstadvancesgiventothepartiesunderRawMaterialAssistance scheme (RMA) which were invoked,remainunpaidby thebank tilldate.Managementhas considered the total outstanding balance of₹17,057.38 lakhs as good and fully recoverableagainst these BGs and no provision has beenmade as the report of Questioned DocumentsExamination Bureau (QDEB) and ForwardingReport dated 4th August 2017 submitted in thecourt by Crime Investigation Department (CID)confirmthattheBGsheldbytheCorporationwereoriginal.Achargesheet,inthematter,hasalreadybeen filed by CID West Bengal. The Ministry ofMSME(TheAdministrativeMinistryofNSIC)afterexaminationofthestatusofthecaseandfindingsoftheQDEBReport,hastakenupthematterwiththe department of Financial Services, Ministryof Finance (TheAdministrativeMinistry ofUnitedBank of India) asking the later to impress uponthe bank to honour NSIC’s rightful invocation ofBank Guarantees worth ₹ 17350 Lakhs togetherwith accrued interest. Management signified thattheyareofthefirmopinionthattheamountisfullyrecoverable and accordingly considered good.However,lookingintothematterwhichisdependentupon the ultimate findings by the competentagencies and their outcome, independent auditorof above branches expressed their inability toquantifytheprovisionrequired.WeatHeadOfficelevel, have no additional documents/informationtodisagreewiththeopinionofthebranchauditor.Hence,wearealsounabletocommentonquantumofprovision requiredagainstoutstandingbalanceof₹17,057.38lakhsasat31stMarch2018.
Qualified Opinion
Inouropinionandtothebestofourinformationandaccording to theexplanationsgiven tous,exceptfor the possible effects of the matter describedin theBasis forQualifiedOpinion paragraph, theaforesaidfinancialstatementsgivetheinformationrequiredbytheActinthemannersorequiredandgive a true and fair view in conformity with theaccounting principles generally accepted in India
Wedrawattention to the followingmatters in theNote-35tothefinancialstatements:
(a) Para-1 which, describes that the balancesofTradeReceivables,Loansandadvances,Trade payables, Deposits/ Earnest Money,Borrowers etc. are subject to confirmation/reconciliation in the following cases andconsequentialadjustments,ifany.
(b) Para-5(a)¶-5(d)ofnote-35regardingdetection of forged bank guarantees of₹2,100 lakhs received from the partiesunder Raw Material Assistance (RMA)scheme by the management. Loans and
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advances outstanding as on 31st March2018of₹1,920.43 lakhsagainst the forgedbankguaranteeshavebeenconsideredasdoubtfuland100%provisionhasbeenmade.ThematterwasreferredtoCentralBureauofInvestigation(CBI)forfurtherinvestigation.
(c) Para -8 regarding ad-hoc provision onaccountofPerformanceRelatedPay(PRP)for the year 2017-2018 amounting to ₹505lakhs(Previousyear₹549.00lakhs)
(d) Para-11 regarding creation of Corpus formedicalschemesfor theemployeesretiredprior to 1.1.2007 and for the employeesretiredonorafter1.1.2007
(e) Para-12regardingpayrevisionofBoardleveland below Board level and non-unionizedsupervisors of CPSEs w.e.f. 01.01.2017which was approved by the Ministry on3rd May 2018. Current year provision of ₹2328.11lakhs,(PreviousyearNIL)
We did not audit the financial statements/informationof63(PreviousYear63)BranchOffices& Technical Centers included in the financialstatements of the Corporation, whose financialstatements/financialinformationreflecttotalassetsof ₹ 3,42,254.90 lakhs as at 31st March, 2018(₹3,37,934.90lakhsasat31stMarch,2017)andtotal revenues of ₹ 2,54,952.15 lakhs (PreviousYear₹2,29,676.62lakhs)fortheyearendedonthatdate,asconsideredinthefinancialstatements.Thefinancialstatements/informationofthesebrancheshave been audited by the independent auditorswhosereportshavebeenfurnishedtous,andouropinion inso faras it relates to theamountsanddisclosuresincludedinrespectofthesebranches,isbasedsolelyonthereportofsuchindependentbranchauditors.
Our opinion is not qualified in respect of thismatter.
Report on Other Legal and Regulatory Requirements
1. As required by Companies (Auditor’sReport)Order,2016(“theOrder”),issuedbytheCentralGovernmentofIndiaintermsofSub-section (11)ofSection143of theAct,wegiveinthe“AnnexureA”astatementonthematterspecifiedinparagraph3and4oftheorder,totheextentapplicable.
a. We have sought and, except for thematters described in the Basis forQualifiedOpinionparagraph, obtainedall the information and explanationswhichtothebestofourknowledgeandbeliefwerenecessaryforthepurposesofouraudit.
b. Except for the possible effects ofthe matter described in the Basis forQualifiedOpinionparagraphabove, inour opinion, proper books of accountasrequiredby lawhavebeenkeptbythe Corporation so far as it appearsfrom our examination of those booksand proper returns adequate for thepurposes of our audit have beenreceivedfromthebranches&technicalcentersnotvisitedbyus.
c. The reports on the accounts of thebranchoffices&technicalcentersoftheCorporationauditedunderSection143(8)of theActby independentauditorshave been sent to us and have beenproperly dealt with by us in preparingthisreport.
d. The Balance Sheet, the Statementof Profit and Loss, the Statement ofProfit and Loss (Commercial) and thestatement of Income and ExpenditureAccount (Promotional) the Cash FlowStatementdealtwithbythisReportareinagreementwiththebooksofaccount
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and with the returns received fromtheBranches&TechnicalCentersnotvisitedbyus.
e. Except for the possible effects ofthe matter described in the Basisfor Qualified Opinion paragraph, inour opinion, the aforesaid financialstatementscomplywiththeAccountingStandards specified under Section133oftheAct,readwithRule7oftheCompanies(Accounts)Rules,2014.
f. Thematter described in the Basis forQualifiedOpinionparagraphabove, inouropinion,mayhaveanadverseeffecton the functioning of the Corporationwhich is linked with outcome ofinvestigationandthemanagementhasbeen in theprocessof takingsuitableaction for redressalof thesamesincelasttwoyear.
g. In our opinion and to the best of ourinformation and according to theexplanationsgiventous,theprovisionsof section 164(2) of theAct shall notapply to the Corporation, being aGovernment of India Enterprise inviewofnotification[F.No.1/2/2014-CL-V] dated 5th June 2015 ofMinistry ofCorporateAffairs.
h. With respect to the adequacy ofthe Internal Financial Controls overFinancialReportingof theCorporationandtheoperatingeffectivenessofsuch
controls,refertoourseparateReportin“AnnexureB”.
i. With respect to the other matters tobe included in the Auditor’s Reportin accordance with Rule 11 of theCompanies(AuditandAuditors)Rules,2014,inouropinionandtothebestofour information and according to theexplanationsgiventous:
i. TheCorporationhasdisclosedtheimpactofpendinglitigationsonitsfinancial position in its financialstatements–ReferNote34and35tothefinancialstatements;
ii. The Corporation did not haveany long-term contracts includingderivativecontractsforwhichtherewere any material foreseeablelosses.
iii. Therewerenoamountswhichwererequired to be transferred to theInvestorEducationandProtectionFundbytheCorporation.
3. With respect to the report pursuant todirections issued by the Comptrollerand Auditor General of India u/s 143(5)of Companies Act, 2013 for the yearended 31st March 2018 on accounts ofHead Office audited by us and 63 branchoffices & technical centers audited byother independent auditors appointed byComptroller&AuditorGeneralofIndia,refertoourseparateReportin“AnnexureC”.
Referred to in our Report of even date on theAccounts of The National Small IndustriesCorporation Limited for the year ended on 31stMarch2018.
(i) a The Corporation has maintained properrecords showing full particulars includingquantitativedetailsandsituationofthefixedassets
b. The management during the year hasphysicallyverifiedalltheassetsandthereisa regular programme of verification, which,inouropinion, is reasonablehaving regardtothesizeoftheCorporationandthenatureofitsassets.Nomaterialdiscrepancieswerenoticedonsuchverification.Asregardsfixedassets on lease, we have been informedthat there has been a system of physicalverification in case of default cases & inrespect of others; verification is done, ifnecessary.Wehavebeen informed thatnoserious discrepancy have been noticed onsuchphysicalverification.
c Accordingtotheinformation&explanationsgiventousandonthebasisofourexaminationof the records of the corporation, the titledeedsofthefollowingimmovablepropertiesarenotheldinthenameofthecorporation:
(₹inLakhs)
S. No.
Particulars of the property Area As at
31/03/2018As at
31/03/2017
1 LandatTechnicalCentreHowrah
49.94acres 1.60 1.60
2 FlatsatBranchOfficeMumbai
3660sqft. 5.87* 6.06*
*Figuresarewrittendownvalueasondate.
(ii) Asinformedtous,inrespectoffinishedgoods,rawmaterials,storeandspareparts,physicalverificationhasbeencarriedout during theyearorat theendofyearbymanagement.In our opinion, frequency of verification isreasonable. No material discrepancies arenoticedonsuchverification.
(iii) Accordingtotheinformationandexplanationsgiven to us, the Corporation has notgrantedanyloans,securedorunsecuredtocompanies,firms,limitedliabilitypartnershipor other parties covered in the registermaintained u/s 189 of the CompaniesAct,2013.Accordingly, the paragraphs 3(iii) (a)and(b)oftheorderarenotapplicable.
(iv) In our opinion and according to theinformation and explanations given to usduring the course of audit, theCorporationhascompliedwith theprovisionsofSection186of theCompaniesAct,2013 in respectofinvestmentofthecorporation.Further,thecorporation has not granted any loans andhas not given any guarantees and securityunder the provision of section 185 of thecompaniesAct,2013; thereby theprovisionof the said section is not applicable to thecorporation.
(v) Accordingtotheinformationandexplanationsgiventous,thecorporationhasnotacceptedanydepositsfromthepublicduringtheyearwithinthemeaningofSection73to76oranyother relevant provisionsof theCompaniesAct,2013and the rules framed thereunder.Therefore,theprovisionofclause3(v)oftheOrderisnotapplicabletotheCorporation.
(vi) As per the information and explanationsgiventous,themaintenanceofcostrecordshas not been prescribed by the CentralGovernment, under section 148(I) of theCompaniesAct,2013,foranyproductoftheCorporation.
(vii) (a) The Corporation is generally regularin depositing undisputed statutory duesincludingProvidentFund,Employee’sState Insurance, Income Tax, Sales Tax,ServiceTax,CustomDuty,ExciseDuty,Valueadded tax, Cess and any other statutorydues, as applicable, with the appropriateauthorities. According to the informationandexplanationsgiventous,therewerenoundisputed amounts payable in respect of
ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORT
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above statutory dues outstanding on 31stMarch, 2018 for a period of more than 6monthsfromthedatetheybecamepayable.
(b) According to the information andexplanationsgiventous,therearenodues
of Sales Tax, Income Tax, Customs Duty,ExciseDuty,ServiceTax,ValueaddedTax,Cess, which have not been deposited onaccountofanydisputeinvariousoffices,oftheCorporationasawholeason31stMarch2018,exceptthefollowings:
(ix) In our opinion and according to theinformationandexplanationsgiventous,thecorporation has not raisedmoneys bywayof initial public offer or further public offer(including debt instruments) and the termloanswereappliedforthepurposeforwhichtheloanswereobtained.
(x) According to the information andexplanations given to us, no fraud by thecorporationorany fraudon thecorporationby its officers or employees has beennoticed or reported during the year(except the cases referred to in Para-5 ofNote35regardingdetectionoffraudsduringthefinancial year2016-17 related toBankGuarantees (BGs) amounting to ₹17,350lakhs(Outstandingadvancesof₹17,057.38lakhsasat31stMarch2017)receivedfromthe parties under Raw Material AssistanceSchemewhichwereinvoked,remainunpaidbythebanktilldate.Noprovisionhadbeenmade for that. Further, fraud related todetectionof forgedbankguaranteeshavingoutstandingbalanceof₹1,920.30lakhs(netof adjusting amount received inMay2017)against BGs value of ₹2,100 lakhs as on31st March 2017 had been considered asdoubtful and 100% provision was made inthepreviousyear itself.All themattershadalso been referred to CBI/CID for furtherinvestigations.)
(xi) Inouropinionandaccordingtotheinformationand explanations given to us, GovernmentCompaniesvideMCA’snotificationpublishedinGazetteDt. 5th June2015, are exemptsfromtheapplicabilityofprovisionsofsection197readwithScheduleVtotheCompaniesActregardingmanagerialremuneration.
(xii) Inouropinionandaccordingtotheinformationandexplanationsgiventous,thecorporationis not a Nidhi Company. Therefore, theprovisionsofclause4 (xii)of theOrderarenotapplicabletotheCorporation.
(xiii) Intermsoftheinformationandexplanationssoughtbyusandgivenbythemanagementand the books and records examined byus in thenormalcourseofauditand to thebest of our knowledge and belief, we statethat there are no transactions with therelated parties except remuneration paid tokeymanagement personnel. The details ofwhich have been disclosed in the financialstatements as required by the applicableaccountingstandards.
(xiv) Accordingtotheinformationandexplanationsgiven to us by the management and thebooks and records examined by us in thenormal course of audit and to the best ofourknowledgeandbelief,westate that thecorporation has not made any preferentialallotmentorprivateplacementsofsharesorfully or partly convertibledebenturesduringtheyear.
(xv) Inouropinionandaccordingtotheinformationandexplanationsgiven tous,westate thatthe Corporation has not entered into non-cash transactions with directors or persons
We have audited the internal financial controlsoverfinancialreportingof THE NATIONAL SMALL INDUSTRIES CORPORARTION LIMITED (“theCorporation”) asofMarch31,2018inconjunctionwith our audit of the financial statements of theCorporationfortheyearendedonthatdate.
Management’s Responsibility for Internal Financial Controls
The Corporation’s management is responsiblefor establishing andmaintaining internal financialcontrolsbasedontheinternalcontroloverfinancialreporting criteria established by the Corporationconsidering the essential components of internalcontrol stated in the Guidance Note on Audit ofInternalFinancialControlsoverFinancialReportingissuedbytheInstituteofCharteredAccountantsofIndia. These responsibilities include the design,implementation and maintenance of adequateinternal financial controls that were operatingeffectively for ensuring the orderly and efficientconduct of its business, including adherence toCorporation’s policies, the safeguarding of itsassets, the prevention and detection of fraudsanderrors,theaccuracyandcompletenessoftheaccounting records,and the timelypreparationofreliablefinancialinformation,asrequiredundertheCompaniesAct,2013.
Auditors’ Responsibility
Our responsibility is to express an opinion onthe Corporation’s internal financial controlsover financial reporting based on our audit. Weconducted our audit in accordance with theGuidance Note on Audit of Internal FinancialControlsOverFinancialReporting(the“GuidanceNote”) and the Standards onAuditing, issued byICAIanddeemed tobeprescribedundersection143(10)oftheCompaniesAct,2013,totheextentapplicabletoanauditofinternalfinancialcontrols,both applicable to an audit of Internal FinancialControls and, both issued by the Institute ofCharteredAccountantsof India.ThoseStandards
andtheGuidanceNoterequirethatwecomplywithethicalrequirementsandplanandperformtheauditto obtain reasonable assurance about whetheradequate internal financial controls over financialreporting was established and maintained and ifsuch controls operated effectively in all materialrespects.
Ourauditinvolvesperformingprocedurestoobtainauditevidenceabouttheadequacyoftheinternalfinancialcontrolssystemoverfinancialreportingandtheiroperatingeffectiveness.Ourauditof internalfinancialcontrolsoverfinancial reporting includedobtaining an understanding of internal financialcontrolsoverfinancialreporting,assessingtheriskthat amaterial weakness exists, and testing andevaluatingthedesignandoperatingeffectivenessof internal control based on the assessed risk.Theproceduresselecteddependon theauditor’sjudgement,includingtheassessmentoftherisksofmaterialmisstatementof thefinancialstatements,whetherduetofraudorerror.
Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforour qualified audit opinion on the Corporation’sinternal financial controls system over financialreporting.
Meaning of Internal Financial Controls over Financial Reporting
A Corporation’s internal financial control overfinancialreportingisaprocessdesignedtoprovidereasonable assurance regarding the reliability offinancialreportingandthepreparationoffinancialstatements for external purposes in accordancewith generally accepted accounting principles. ACorporation’sinternalfinancialcontroloverfinancialreporting includes those policies and proceduresthat(1)pertaintothemaintenanceofrecordsthat,inreasonabledetail,accuratelyandfairlyreflectthetransactionsanddispositionsof theassetsof theCorporation;(2)providereasonableassurancethattransactionsare recordedasnecessary topermit
Annexure B
ANNEXURE TO THE INDEPENDENT AUDITOR’S REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”).
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preparation of financial statements in accordancewithgenerallyacceptedaccountingprinciples,andthatreceiptsandexpendituresoftheCorporationarebeingmadeonlyinaccordancewithauthorisationsof management and directors of the Corporation;and (3) provide reasonable assurance regardingprevention or timely detection of unauthorisedacquisition, use, or disposition of the Corporation‘s assets that could have amaterial effect on thefinancialstatements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internalfinancialcontrolsoverfinancialreporting, includingthepossibilityofcollusionorimpropermanagementoverrideofcontrols,materialmisstatementsduetoerrororfraudmayoccurandnotbedetected.Also,projectionsofanyevaluationoftheinternalfinancialcontrolsoverfinancialreportingtofutureperiodsaresubjecttotheriskthattheinternalfinancialcontrolover financial reporting may become inadequatebecauseofchangesinconditions,orthatthedegreeofcompliancewith thepoliciesorproceduresmaydeteriorate.
1. Attention is invited to Note 19 and Para No. 5 (b) of Note-35 in respect of the fraud detected during financial year 2016-17 related to Bank Guarantees(BGs) at some of the offices of the Corporation in West Bengal and further to it total BGs amounting to ₹17,350 lakhs received from United Bank of India (UBI) against advances given to the parties under Raw Material Assistance scheme (RMA) which were invoked, remain unpaid by the bank till date. Management has considered the total outstanding balance of ₹17,057.38 lakhs as good and fully recoverable against these BGs and no provision has been made as the report of Questioned Documents Examination Bureau (QDEB) and Forwarding Report dated 4th August 2017 submitted in the court by Crime Investigation Department (CID) confirm that the BGs held by the Corporation
were original. A charge sheet, in the matter, has already been filed by CID West Bengal. The ministry of MSME (The Administrative Ministry of NSIC) after examination of the status of the case and findings of the QDEB Report, has taken up the matter with the department of Financial Services, Ministry of Finance (The Administrative Ministry of United Bank of India) asking the later to impress upon the bank to honour NSIC’s rightful invocation of Bank Guarantees worth ₹ 17350 Lakhs together with accrued interest. Management signified that they are of the firm opinion that the amount is fully recoverable and accordingly considered good. However, looking into the matter which is dependent upon the ultimate findings by the competent agencies and their outcome, we are unable to comment on quantum of provision required, if any, against outstanding balance of ₹17,057.38 lakhs as at 31st March 2018.
2. AttentionisdrawntoPara-5(a)¶-5(d)ofNote-35regardingdetectionofforgedbankguarantees of ₹2,100 lakhs received fromthepartiesunderRawMaterialAssistance(RMA)schemebythemanagement.Loansandadvancesoutstandingason31stMarch2018of₹1,920.43lakhsagainsttheforgedbank guarantees have been consideredas doubtful and100%provision hasbeenmade.Thematterwas referred toCentralBureau of Investigation (CBI) for furtherinvestigation.
3. The procedure for review of financial statements/accounts of the borrower, inspection of the units, periodical confirmation of balances, renewal of limit sanctioned to the units and review of outstanding balances exceeding 360 days on timely basis under Raw Material Assistance scheme were not effectively implemented/monitored. However, the entire procedure has been reviewed and revised by the management in the light of these weaknesses to ensure that effective steps are in place and the various checks/controls provided, are operating effectively.
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In our view, the Internal Financial Control are required to be monitored and reviewed periodically.
4. Internalcontrolneedsfurtherstrengtheningin respect of implementation of riskmanagement and systems to ensurecontinued implementation of Corporation’srisk management policy and strategy anddocumentation thereof, critical reviewand refresh process on an ongoing basis.Moreover,toavoidanymanualinterventioninthepreparationandreportingoffinancials,anintegratedaccountingpackageneedstobeimplemented.
5. Budgeting needs further improvement.Nobudgetwasprepared byH.R.Divisionfor recruitments through open marketbasedon thecadre / postwisevacancies
In our opinion, to the best of our informationandaccording to theexplanationsgiven tous,except for the effects/possible effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Corporation hasmaintained, in allmaterial respects, adequate internal financialcontrols over financial reporting and suchinternalfinancialcontrolsoverfinancialreportingwereoperatingeffectivelyasofMarch31,2018,based on “the internal control over financialreportingcriteriaestablishedbytheCorporationconsideringtheessentialcomponentsofinternalcontrol stated in the Guidance Note on Auditof Internal Financial Controls Over FinancialReporting issued by the Institute of CharteredAccountantsofIndia”.
Wehave conducted the audit of accountsmaintained atHeadOffice ofTheNational Small IndustriesCorporationLimitedfortheyearended31stMarch2018inaccordancewiththedirections/subdirectionsissued byC&AGof India underSection 143(5) of theCompaniesAct,2013 and certify thatwe havecompliedwithallthedirections/Sub-directionsissuedtous.
Annexure‘C’ ReportonDirectionsissuedbytheComptrollerandAuditorGeneralofIndiaUnderSection143(5)oftheCompaniesAct,2013inrespectofAccountsofHeadofficeofThe National Small Industries Corporation Limited, New Delhi audited by us and 63 branch offices including technical centres audited by otherindependentauditorsfortheyearended31stMarch2018.
S. No. Information desired Status
1. Whether the companyhas clear title/ leasedeeds for freeholdand leasehold landrespectively? If notpleasestate theareaoffreehold and leaseholdland for the which title/lease deeds are notavailable?
As on 31.03.2018, the Corporation has maintained proper recordsinrespectof inventories lyingwiththirdparties.Further, therearenoinventorieslyingwiththirdpartiespertainingtoHeadOffice.AccordingtotheinformationandexplanationsgiventousandonthebasisofourexaminationoftherecordoftheCorporation,theCorporationhasnotreceivedanyassetsasgift/grant(s)fromtheGovt.orotherauthorities.However,theCorporationhasacquiredassetsoutofthegrantsduringtheyearforwhichproperrecordshavebeenmaintained.
7) For the Financial year ended 31stMarch 2018, the corporation has compliedwith theAccountingStandards, Income Recognition, Provisioning norms for Doubtful Receivables and Loans andAdvanceswhichareasper theprudentialnorms formulatedby thecorporationand referred to/asstatedintheSignificantAccountingPolicies.
6. NetOwnedFund(in₹`Crore)(Calculation of the same is given in the Annex) 835.59
7. TotalAssets(in₹Crore) Rs.3502.68
8.
Asset-Incomepattern:(intermsofRBIPressRelease1998-99/1269datedApril8,1999)a) %ofFinancialAssetstoTotalAssetsb) %ofFinancialIncometoGrossIncome(NBFC-Factor / NBFC-MFI / AFC / IFC may also report separately below)
84%
83%
9.Whether the company was holding any PublicDeposits,asonMarch31,2018?IfYes,theamountin` NILCrore
No
10.Hasthecompanytransferredasumnotlessthan20%ofitsNetProfitfortheyeartoReserveFund?(In terms of Sec 45-IC of the RBI Act, 1934).
15 IfthecompanyisclassifiedasanNBFC-IFC%ofInfrastructureLoanstoTotalAssets NA
16
Has there been any takeover/acquisition ofcontrol/ change in shareholding/ Managementduring the year which Required prior approvalfromRBI?(Please refer to per DNBR (PD) CC. No.065/03.10.001/2015-16 dated July 09, 2015 on the subject for details)
No
IntermsofMasterDirection-NonBankingFinancialCompaniesAuditor’sReport(ReserveBank)Directions,2016datedSeptember29,2016,aseparatereport to theBoardofDirectorsof thecompanyhasbeenmade.
SIGNIFICANT ACCOUNTING POLICIES OF THE CORPORATION FOR THE FINANCIAL YEAR 2017-18
Attached to and forming an integral part of Financial Statements for the year ended 31st March, 2018
1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements are prepared onaccrualbasisofaccountingunlessotherwisestated, under historical cost conventionin accordance with generally acceptedaccountingprinciplesinIndiaandtherelevantprovisions of the Companies Act,2013includingaccountingstandardsnotifiedthereunder.
2. USE OF ESTIMATES
The preparation of financial statementsrequires estimates and assumptions,which affect the reported amount of assets,liabilities (including contingent liabilities),revenues and expenses of the reportingperiod. The difference between the actualresults and estimates are recognized in theperiodinwhichtheresultsareknownand/ormaterialized.
3. INVESTMENTS
Investments are classified into current andnon-currentinvestments.CurrentInvestmentsarestatedatlowerofcostormarketvalueonan individual investment basis. Non-currentinvestmentsarestatedatcostandprovisionfor diminution in value is made for eachinvestment individually only if such declineisotherthantemporaryintheopinionofthemanagement.
4. VALUATION OF INVENTORIES
(i) At cost or net realizable value, whichever is lower.
a) Stores, pattern, moulds, tools,measuring instrumentsandgoodsintransit.
b) Stock of finished goods, finishedcomponents,workinprogressand
stores in NSIC technical servicecenters.
c) Stockoffinishedgoodspertainingtocommercialactivities.
d) Stock of repossessed / seized /surrendered machines under hirepurchase(HP)andcompositetermloan(CTL).
e) Stock of repossessed / seized/ surrendered machines underequipment leasing where assetsgivenonorafter01.04.2001.
h) Costs incurred in bringing eachproducttoitspresentlocationandcondition are accounted for asfollows:
► Stock of finished goods, finishedcomponentsandworkinprogressinNSICtechnicalservicecenters:Apartfromdirectcosts, overheads are charged in the ratioof totaloverheadsfor theyearasreducedby the overheads charged to outside joborders at predetermined standard rates todirect labour cost. Cost is determined onFirst-in-firstout(FIFO)basis.
► Other inventories: Cost includes costof purchase and other costs incurred inbringing the inventories to their presentlocationandcondition.Cost isdeterminedonFirst-in-firstout(FIFO)basis.
► Netrealizablevalueistheestimatedsellingprice in the ordinary course of business,less estimated costs of completion andestimated costs necessary to make thesale.
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(ii) At Cost
Stockofstationeryandmiscellaneousitems.Cost is determined on First-in-firstout(FIFO)basis
5. FIXED ASSETS AND CAPITAL WORK-IN-PROGRESS
(i) Leased assets and seized leasedassets out of leased assets acquiredup to 31st March’2001: are stated athistorical cost, net of accumulatedbalance of depreciation and leaseterminaladjustment.
(ii) Other than leased assets and seizedleased assets out of leased assets:are stated at their original cost ofacquisition including taxes, duties,freight and other incidental expensesrelatedtoacquisitionandinstallationoftheconcernedassetslessaccumulateddepreciation.
(iii) Capital work-in-progress comprisescost of fixed assets that are not yetready for their intended use at thebalancesheetdate.
(iv) Projects under commissioning /installationsandothercapitalwork-in-progressarecarriedatcostcomprisingdirectcost,relatedincidentalexpenses,interest on borrowings there againstandadministration&generaloverheadexpensesattributabletoconstructionoffixedassetsincurredtilltheyarereadyfor their intended use, are identifiedandallocatedonasystematicbasistothecostofrelatedassets.
(v) Depositworkcontractsareaccountedfor on the basis of statements ofaccountreceivedfromthecontractors.
6. DEPRECIATION
(i) Leased assets and Seized leased assets out of leased assets acquired up to 31st March, 2001:
Depreciation is provided on proratabasisatwrittendownvaluemethodas
pertheusefullifeprescribedinpartCto schedule II of the CompaniesAct,2013.
(ii) Fixed assets other than leased assets and seized leased assets out of leased assets
a) Depreciation on fixed assetspurchased out of Governmentgrants is charged on straight-linemethod as per useful livesspecified in part C to scheduleII of the CompaniesAct, 2013.Itischargedto‘CapitalReserve’bywayofreducingnetvalueoffixedassets.Thecapitalreserveiscreatedatthetimeofpurchaseof fixed assets out of grantsreceivedwiththepurchasecost.
b) Lease hold land is amortizedovertheleasedperiod.
c) IntangibleAssetsareamortizedoveraperiodof5years.
d) Mobile phone Instrumentscosting ` 0.05 lakh and above,aredepreciatedoveraperiodof3years.
e) AssetswhicharenotcoveredbyPara6(ii)(a),(b),(c)&(d)above,aredepreciatedonproratabasisatstraightlinemethodaspertheusefullifeprescribedinpartCtoschedule II of the CompaniesAct.
7. TRADE RECEIVABLES
(i) The hirers/lessees are treated asreceivables to the extent of hirepurchase/lease installments alreadyfallendue.Un-accruedprincipalamountof defaulted hire purchase accounts/ un-accrued principal amount ofdefaultedleaseinstallments(inrespectof assets leased from 01.04.2001)where machines are repossessed /seized/surrenderedarealsoincludedinthetradereceivables.
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(ii) Trade receivables are treated as`Secured’totheextentofthesecuritiesavailablebywayofanyofthefollowing-marketvalue/WDV/committedvalue(in respect of legal/seized cases) ofassets financed (identified & lying inpossession of the unit/Corporation),any advance received from the unit,EMD, seizedmachines, considerationmoney, terms of agreement, advanceinstallment/ rental, advance receivedfromhirer/advanceagainstpurchaseofmachineoranyothertangiblesecurity/amount owes by the Corporation tothe units including transactions underback-to-backarrangement.Itshallalsoincludeallsecuritiesobtainedfromtheunits as per the term of sanction ofassistance.Theamountsnot coveredbyabovearetreatedas‘Unsecured’.
8. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
(i) Theprovisionsfordoubtfulreceivablesand loans&advances(netof interestsuspense account) of financingschemes and of Technical Centers/STPs have been made as per thenorms prescribed by the Board ofDirectorsasannexedherewith.
(ii) Provisions(ifrequired)onReceivablesand Loans & Advances from CentralGovernment / State Governments /GovernmentInstitutions/GovernmentCompanies and other Central / StateGovernment departments / bodies, ismadewhereverconsideredappropriatebythemanagement.
(iii) Noprovisionfordoubtfulreceivablesinrespect of ‘Receivables’ underExportand Marketing Scheme is made tothe extent the amount appears under‘Payable’forsuppliespertainingtothesame transaction under back-to-backarrangementwithsuppliers.
(iv) Contingent liabilities are disclosedbased on the judgment of themanagement/independent expert.These are reviewed at each balance
sheetdateandareadjusted toreflectthe current management estimate.Contingent Assets are neitherrecognized nor disclosed in thefinancialstatements.
9. FOREIGN EXCHANGE TRANSACTIONS
(i) Transactions in foreign currency areinitiallyaccountedattheexchangerateprevailingonthetransactiondate.
(ii) Monetary items (such as Cash,Receivables, Loans, Payables, etc.)denominated in foreign currencies,outstanding at the year-end, aretranslatedatexchangeratesprevailingatyear-end.
(iii) Any gains or loss arising on accountof exchange difference either onsettlementorontranslation,isadjustedintheStatementofProfit&Loss.
10. REVENUE RECOGNITION
Alltheitemsofincome(incl.realizationfromtraining activities and common facilities) &expenditure are accounted for on accrualbasis except as mentioned below whichare accounted for in accordance with theprovisions contained in AS-9 on RevenueRecognition:-
(i) Hire Purchase and Leasing
Incomeisaccountedforasunder:-
a) Penal interest, which isconsidered as doubtful ofrecovery,istreatedasincomeintheyearofitsrealization.
b) Excess of sales proceedsof repossessed / seized /surrendered machines overtheir value as per accountingpolicy No.4 (d) (in case of hirepurchase) and 4 (e) (in caseof leasing) as on the dateof repossession / seizure /surrender is adjusted againstthe defaulted hirer’s/lessee’saccount. Any excess over and
Annual Report 2017-18
89
abovetheamountduefromthehirer/lesseeistreatedasincomein the year of receipt of saleproceeds.
c) Where the unit’s accountsare frozen, no further interestis being debited to the unit’saccount.
(ii) Marketing, Raw Material Distribution/Assistance, Bill Financing and Composite Term Loan
Incomeisaccountedforasunder:-
a) Interest/other income due fromtheunitsthatareconsideredasdoubtful of recovery, is treatedas income in the year of itsrealization.
b) Application processing fee,wherever applicable, is treatedasincomeonreceiptbasis
c) Processing fees is treated asincome on time proportionatebasis
d) Where the unit’s accountsare frozen, no further interestis being debited to the unit’saccount.
(iii) Government Purchase Registration Fee
IncomereceivedunderGovt.PurchaseRegistration Scheme on accountof registration fees, renewal fees,limit enhancement fees and fees forany amendment/ additions in thecertificates, is entirely recognized ondateofissuanceofcertificateforfreshregistration/renewal/enhancementof limit/ any amendment/ additionstherein.
(iv) Infomediary Membership Fee
Membership fee received underInfomediary scheme is recognized asincomeintheyearofreceipt.
(v) Treatment of Decree Awarded
Whereadecreehasbeenawardedinfavour of the Corporation, necessaryadjustmentsintheunit’saccountsaremadeatthetimeofrealizationofdues.
(vii) Income from Turnkey Projects / Service & Consultancy Contracts
a) Projects under commissioning /installations are carried at costcomprising direct cost and relatedincidental expenses incurred tillthey are ready for their intendeduse. In case of indirect expenses,the same have been account forunder thenaturalheadofaccountofrespectiveexpenditure.
b) Service charges/ other revenuefrom turnkey projects/ Service& Consultancy contracts arerecognized based on the stage ofcompletion of the activity, as percontract, reached on the balancesheetdate.
11. EXPORT SALES
Salesonaccount of export of productsandprojects are accounted for on the basis ofinvoicevalueasperthetermsofexports.
12. SAMPLES FOR EXHIBITIONS
Thecostofsamplesandotheritemsacquiredfor various exhibitions and fairs in India orabroadarechargedtorevenueintheyearinwhichexhibitionsandfairsareheld.
13. INCOME FROM LEASING
(i) On lease transactions entered up to 31st March, 2001
(a) Lease rentals in respect oftransactions enteredup to 31stMarch,2001isaccountedforon
Annual Report 2017-18
90
accrual basis, net of the leaseequalizationcharges.
(b) Cost of capital relating tooutstandingnetinvestmentintheleasedassets isdeducted fromleaserentalstoarriveatrecoveryof capital. The difference ofrecoveryofcapitalandstatutorydepreciationisdepictedthroughlease equalization chargeaccount. The contra effect ofsuchleaseequalizationaccountis reflected by operating leaseterminal adjustment account inthe balance sheet. The shortfall of capital recovery, if any,is accounted for in the year ofdisposalofasset.
(ii) Lease transactions entered on or after 1st April, 2001
The finance income and recovery ofnet investment included in the leaserentals are work out at the interestrate implicit in the lease.The financeincome is recognized as incomeand credited in Statement of Profit &Loss. The difference of lease rentalsand finance income is considered asrecoverytowardsnetinvestment.
14. GOVERNMENT GRANTS
The Corporation utilizes grants receivedfrom Government of India under variouspromotional activities approved by theGovernment.
Receipt of grants is recognizedas advancefrom theGovernmentof Indiaand isshownas Amounts Payable to Government ofIndia. Thereafter, the grant to the extent ofexpenditureincurred,isrecognizedasincomeintheStatementofIncome&Expenditure.Incaseofcapitalgrant,theexpenditureincurredis reduced from the recognized income bycreatingcapitalreserve.IncaseofapprovedPromotional activities, expenditure incurred/ committed for the year, but grant receivedinsubsequentyear, isaccountedonaccrualbasis.
Further,Interestearned,ifany,onthesurplusgrant as per the terms of the sanction ofthe grant, is recognized as advance fromthe Government of India and is shown asAmountsPayabletoGovernmentofIndia.
In case, the net result under advanceaccounts of various promotional activities is“deficit”, it is shownas “AmountReceivablefrom the Government of India for deficit ingrants” under the head current assets andif there is “surplus”, the same is shown as“AmountPayabletotheGovernmentofIndiaforsurplusingrants”undertheheadcurrentliabilities.
15. APPROPRIATION OF RECEIPTS
(i) Receipt(s) from units having availedassistanceunderdifferentcommercialschemes are appropriated in themannerwhereby the adjustments arefirst made towards the oldest duesand inthefollowingorder i.e. towardsmiscellaneous charges, servicecharges,penalinterest,normalinterestandprincipal.
(ii) Incasesofsettlement,thereceiptsfromthe defaulting units are appropriatedlasttowardsthepenalinterest,ifany.
The expenses directly attributable to thecommercial and promotional activities havebeencharged to the respectiveactivities. Incase of indirect expenses, the same havebeen allocated on the basis of businessgenerated in different commercial activitiesduring the year. In case of promotionalactivities,theindirectexpensesareallocatedbased onmanagement estimates, however,the overall amount has been restricted totheamountpermissibleundertherespectiveactivities.
Annual Report 2017-18
91
18. BORROWING COST
Borrowing cost of the funds specificallyborrowed for the purpose of obtainingqualifyingassetsandeligibleforcapitalizationalongwiththecostoftheassets,iscapitalizedup to the date when the asset is ready foruseafternettingoffanyincomeearnedontemporaryinvestmentofsuchfunds
19. EMPLOYEE BENEFITS
(i) Defined Contribution plan Corporation’s contributions paid/
payable during the year to providentfund and pension fund is recognizedinthestatementofprofitandloss.Thecontributiontoprovidentfundispaidtoafundadministeredthroughaseparatetrust.
(ii) Defined benefits plan Corporation’s liability towards gra-
tuity, leave encashment and otheremployees’ benefits namely Sickleave, T.A. on Retirement and LeaveTravelConcessionforCDAemployeesare accounted for based on actuarialvaluation at the year-end. Actuarialgainsandlossesarerecognizedinthestatementofprofitandlossintheyearofitsoccurrence.
20. IMPAIRMENT OF ASSETS
TheCarryingamountsofassetsarereviewedat eachBalanceSheet date. In case, thereis any indication of impairment based oninternal/external factors, an Impairment lossis recognizedwherever thecarryingamountoftheassetsexceedsitsrecoverableamount.
21. RISK FUND
Based on the Corporate Governanceguidelineson‘RiskManagement’forCentralPublicSectorEnterprisesand thepossibilityof risk of financial loss to the Corporationdue to any reason, a risk fund at 0.40%of the outstanding under the schemes ofRaw Material Assistance & Bill Discounting(secured by Bank Guarantee), TradeReceivables-Marketing (from Central &State Government, Government Institutions
/ Companies / Departments / Bodies) andTermLoan (securedbyEMD) is createdbymakingappropriationoftheprofittomitigateanyunforeseen lossarisingoutofbusinesstransactions.Thequantumofsaidfundatthebeginningoftheyearisincreased/decreasedtocommensuratewiththeincrease/decreasein the outstanding under the scheme atthe end of each financial year. Interest andservice charges earned on the amount offundatbeginningoftheyearisploughback.Theobjectiveofcreatingriskfundistomeetoutanyfinanciallossundertheseschemes.
22. ACCOUNTING FOR TAXES ON INCOME
Provision for current tax is made as pertheprovisionsof the IncomeTaxAct, 1961.Deferredtaxexpenseorbenefitisrecognizedon timing differences being the differencebetween taxable incomes and accountingincome that originate in one period and islikely to reverse inoneormoresubsequentperiods. Deferred tax assets and liabilitiesare measured using the tax rates and taxlawsthathavebeenenactedorsubstantivelyenactedbythebalancesheetdate.
Intheeventofunabsorbeddepreciationandcarry forward of losses deferred tax assetsare recognizedonly to theextent that thereis virtual certainty supported by convincingevidencethatsufficientfuturetaxableincomewillbeavailabletorealizesuchassets.Inothersituationdeferred taxassetsare recognizedonly to the extent that there is reasonablecertaintythatsufficientfuturetaxableincomewillbeavailabletorealizetheseassets.
23. CASH FLOW STATEMENT
Cash flows are reported using the indirectmethod,wherebyprofitbeforetaxisadjustedfor the effects of transactions of a noncashnatureandanydeferralsoraccrualsofpastor future cash receipts or payments. Thecashflows from regularoperating, financingand investing activities of theCompany aresegregated.
Annual Report 2017-18
92
The norms of making provisions for DoubtfulReceivablesandLoans&Advances(netofinterestsuspense account) of Financing Schemes and ofTechnicalCenters/STPs,asapprovedbyBoardofDirectorsareasfollows:
1. TRADE RECEIVABLES
Trade Receivables comprises of receivables inrespect of dues under Hire Purchase, Leasing &Marketing activities and includes receivables onaccount of transactions at Technical Centers &STPs. Provisioning norms for Trade Receivablesaredepictedhereunder:
Note: Refer Accounting Policy-Para 7(i) and 7(ii) for Secured and Unsecured Trade Receivables
2. LOANS AND ADVANCES
Loans and advances comprises of receivables inrespectofduesunderRawMaterialAssistance,BillDiscounting,TermLoan,CompositeTermLoanandAdvances recoverable in cashor in kind includingstaffadvances
Receivables w.r.t. commercial activities underLoans&Advancesaretreatedas‘Secured’(unlessotherwisestated), forwhich theCorporationholdsas ‘Security’ any of the following -Earnest MoneyDeposit (EMD), Security Deposit Receipt (SDR),
EquitableMortgageof ImmovableProperty,Termsof agreement, and Bills for supplies made to theGovernment Departments and any other tangiblesecurities. The ‘Securities’ shall also include allsecurities obtained from theunits as per the termofsanctionofassistance.Theamountsnotcoveredbyaboveare treatedas ‘Unsecured’.ReceivablesandLoans&AdvancesbackedbyBankGuarantee/LetterofCredits,thoughtreatedasunsecured,areconsideredgood.
Provisioning norms for various items of Loans &Advancesaredepictedbelow:
The provisions required in respect of thedefaultunderCompositeTermLoanSchemearetobearrivedatasfollows:-
AnnexuretoAccountingPolicy-Para7&8(i)
Provisioning Norms for Doubtful Receivables and Loans & Advances
Annual Report 2017-18
93
a) The amount of balance outstanding(principalamountindefault)asat31stMarch.
b) CGTSIcoveravailable i.e.75%of “a”aboveor`18.75lakh,asapplicableineachcase,whicheverisleast.
c) Amount not covered under CGTSIcover(a-b).
d) OntheamountcoveredunderCGTSIasat`b’above,noprovisionshavetobe made. However, in respect of theamountnotcoveredunderCGTSI i.e.at ‘c’ above and interest receivableonthedefaultedamount(netofpenalinterest suspense account) & othercharges, if any, provision@100% tobemade.
(D) Advances Recoverable in Cash or in Kind including Staff advances
D.1 Advances Recoverable in Cash or in Kind
Theseamountsprimarilyconsistofadvancespaid to outside parties including advancespaid to bulk suppliers havingMOUwith theCorporation, pre-paid expenses, securitydeposits with telephone & other allieddepartments,etc.
A.K.Mittal Ravindra Nath Director (Finance) Chairman-cum-Managing Director [DIN : 07625711] [DIN : 02815496]
Sd/- Sd/- Gaurang Dixit Nishtha Goyal Chief General Manager (Finance) Company Secretary [Membership No. : A 22768]
Sd/- Sd/-
Annual Report 2017-18
96
NOTE - 1 SHARE CAPITAL(`inLakh)
Particulars As At 31.03.18 As At 31.03.17AUTHORISED5,35,00,000(PreviousYear5,35,00,000)EquitySharesof`100each 53500.00 53500.00ISSUED, SUBSCRIBED AND PAID UP5,32,98,800(PreviousYear5,32,98,800)EquitySharesof`100eachfullypaidup. 53298.80 53298.80
As per Balance Sheet 53298.80 53298.80
ANNEXURE - 1A RECONCILIATION OF NUMBER OF SHARES OUTSTANDINGParticulars Equity Shares (No.) Preference Shares (No.)
ANNEXURE - 1B DETAILS OF SHAREHOLDING OVER 5% SHARE IN CORPORATION
Name of Shareholder As At 31.03.18 No. of Share Held
As At 31.03.18 % of Holding
As At 31.03.17 No. of Share Held
As At31.03.17 % of Holding
GovernmentofIndia 53298800 100 53298800 100
ANNEXURE - 1C DETAILS OF SHARES ALLOTED PURSUANT TO CONTRACT(S) WITHOUT PAYMENT BEING RECEIVED IN CASH, BONUS SHARES AND SHARES BOUGHT BACK IN RESPECT OF LAST 5 YEARS
ANNEXURE - 2A DETAILS OF APPORTIONMENT OF CURRENT YEAR PROFIT
Particulars As At 31.03.18 As At 31.03.17Profit for the period 9940.66 10639.84Less:ProposedDividend 0 3126.18Less:TaxonProposedDividend 0 636.50Less:TransfertoRiskFund 134.60 9806.06 343.69 6533.48
S.No. Particulars As at 31.03.2018 As at 31.03.2017
1. Termsandconditions - -
2. Number of shares proposed tobeissued - -
3. Theamountofpremium,ifany - -
4. Theperiodbeforewhichsharesaretobeallotted - -
5.
Whether the company hassufficient authorized sharecapitaltocoverthesharecapitalamount on allotment of sharesoutofshareapplicationsmoney
- -
6. Interestaccruedonamountdueforrefund - -
7.
The period for which the shareapplication money has beenpending beyond the period forallotment as mentioned in theshare application form alongwith the reasons forsuchshareapplicationmoneybeingpending
Particulars As At 31.03.18 As At 31.03.17DeferredTaxLiabilities (828.50) (729.06)DeferredTaxAssets 6759.44 6176.79As per Balance Sheet 5930.94 5447.73
*For detail refer Sl. No. 7 of Note-35
NOTE - 5 OTHER LONG TERM LIABILITIES(`inLakh)
Particulars As At 31.03.18 As At 31.03.17SecurityDepositPayable 517.68 564.30IncomeReceivedinAdvance 0.06 3.54EarnestMoneyDeposits(EMD) 0.10 12.77As per Balance Sheet 517.84 580.61
Annual Report 2017-18
102
NOTE - 6 LONG TERM PROVISIONS(`inLakh)
Particulars As At 31.03.18 As At 31.03.17Provisions for Employee BenefitsForGratuity 4105.28 3422.52ForLeaveEncashment 2245.63 2074.16ForLeaveTravelConcession 0.24 0.46ForHalfPayLeave 376.43 361.42ForPension 0.00 0.00ForTAonRetirement 3.22 6730.80 3.34 5861.90Others For Exchange VariationBalanceasperlastBalanceSheet 0.00 0.00Add:ProvisionmadeduringtheYear 0.00 0.00Less:UtilisedforExchangeVariationLosses 0.00 0.00Less:Amountwrittenback 0.00 0.00 0.00 0.00 For Promotional Activity (KFW)BalanceasperlastBalanceSheet 0.00 0.00Add:ProvisionmadeduringtheYear 56.63 55.86Less:Amountwrittenback 56.63 0.00 55.86 0.00As per Balance Sheet 6730.80 5861.90
NOTE - 7 SHORT TERM BORROWINGS(`inLakh)
Particulars As At 31.03.18 As At 31.03.17SecuredLoansRepayableonDemandfromBanksWorkingCapitalLoan 205112.18 115612.77CashCredit 1.34 0.84Overdraft 0.00 5608.27TermLoan 0.00 205113.52 0.00 121221.88OtherParties 0.00 0.00LoansandAdvancesfromRelatedParties 0.00 0.00Deposits 0.00 0.00OtherLoansandAdvances 0.00 0.00 Sub Total 205113.52 121221.88
UnsecuredLoansRepayableonDemandfromBanksWorkingCapitalLoan 0.00 0.00CashCredit 0.00 0.00Overdraft 0.00 0.00TermLoan 0.00 0.00 0.00 0.00OtherParties 0.00 0.00LoansandAdvancesfromRelatedParties 0.00 0.00Deposits 0.00 0.00OtherLoansandAdvances 0.00 100000.00 Sub Total 0.00 100000.00As per Balance Sheet 205113.52 221221.88
Annual Report 2017-18
103
Part
icul
ars
Am
ount
O
utst
andi
ng
as o
n 31
.03.
18
Am
ount
O
utst
andi
ng
as o
n 31
.03.
17
Nat
ure
of S
ecur
ity
Whe
ther
gu
aran
teed
by
Dire
ctor
s or
Oth
ers
Con
tinui
ng D
efau
lt as
on
31/
03/1
8
Perio
dA
mou
nt
Secu
red
LoansRepayableonDem
and
from
----
B
anks
----
W
orkingCapitalLoans
----
TheHongkong&
ShanghaiBankingCorp.
Ltd.
73000.00
70000.00
Secured
against
exclusive
registered
mortgageoffreeholdLandmeasuring41920
Sq.MtratOkhlaIn
dustrialE
state,New
Delhi
&paripassuchargeoverreceivablesunder
RMAscheme&bookdebtsunderm
arketing
activities.
--0
StateBa
nkofIndia
120107.18
37312.77
Secured
against
equitable
mortgage
of
propertym
easuring
47b
igha&
67
bisw
asituatedatO
khlaIn
dlEstate,New
Delhiand
pari
passu
chargeonbookdebts/curre
nt
assets.
Nil
0
BN
PPa
ribas
00
Paripassuchargeonloanreceivables
Nil
0
HDFC
WCDL
12005.00
5300.00
Paripassuchargeonbookdebts
Nil
0
ChinaTrustBanking
CorporationLtdST
L0
3000.00
Paripassuchargeonbookdebts
Nil
0
2051
12.1
811
5612
.77
0
C
ashCredit
Pu
njabNationalBank
00
Securedagainstequitablemortgageofla
nd
&buildingatO
khlaIndlEstate,New
Delhi
&pari
passu
chargeoverreceivables
in
theformofloans&advances,bookdebts,
billsdiscountedandallthecurre
ntassets
pertainingtomarketingactivities
--0
AN
NEX
UR
E - 7
A D
ETA
ILS
OF
SHO
RT
TER
M B
OR
RO
WIN
GS
(` inlakh)
Annual Report 2017-18
104
Part
icul
ars
Am
ount
O
utst
andi
ng
as o
n 31
.03.
18
Am
ount
O
utst
andi
ng
as o
n 31
.03.
17
Nat
ure
of S
ecur
ity
Whe
ther
gu
aran
teed
by
Dire
ctor
s or
Oth
ers
Con
tinui
ng D
efau
lt as
on
31/
03/1
8
Perio
dA
mou
nt
VijayaBank
1.34
0.84
Secured
against
registeredmortgage
of
propertysituatedatOkhlaIndustrialEstate,
New
Delhiandparipassuchargeonbook
debts/curre
ntassets.
Nil
0
StateBa
nkofIndia
00
Secured
against
equitable
mortgage
of
propertym
easuring
47b
igha&
67
bisw
asituatedatO
khlaIn
dlEstate,New
Delhiand
pari
passu
chargeonbookdebts/curre
nt
assets.
Nil
0
1.34
0.84
0
O
verdraft
TheHongkong&
ShanghaiBankingCorp.
Ltd.
05608.27
Secured
against
exclusive
registered
mortgageoffreeholdLandmeasuring41920
Sq.MtratOkhlaIn
dustrialE
state,New
Delhi
&paripassuchargeoverreceivablesunder
RMAscheme&bookdebtsunderm
arketing
activities.
Nil
0
CTB
CBank-Overdraft
00
Securedbywayofh
ypothecationofaccount
recievables/bookdebts
ofRaw
Material
AssistanceandOtherCurrentAssets
Nil
0
056
08.2
70
TermLoan
00
Nil
0
O
therParties
00
Nil
0
LoansandAdvancesfrom
RelatedParties
00
Nil
0
D
eposits
00
Nil
0
O
therLoansandAdvances
00
Nil
0
Sub
Tota
l20
5113
.52
1212
21.8
8--
0
Annual Report 2017-18
105
Part
icul
ars
Am
ount
O
utst
andi
ng
as o
n 31
.03.
18
Am
ount
O
utst
andi
ng
as o
n 31
.03.
17
Nat
ure
of S
ecur
ity
Whe
ther
gu
aran
teed
by
Dire
ctor
s or
Oth
ers
Con
tinui
ng D
efau
lt as
on
31/
03/1
8
Perio
dA
mou
nt
Uns
ecur
ed
LoansRepayableonDem
and
from
----
B
anks
----
W
orkingCapitalLoans
----
C
ashCredit
----
O
verdraft
----
TermLoan
----
O
therParties
----
LoansandAdvancesfrom
RelatedParties
----
D
eposits
----
O
therLoansandAdvances
----
Com
mercialPaper
0100000.00
0
Sub
Tota
l0
1000
00.0
0--
--0
Tota
l20
5113
.52
2212
21.8
8--
--0
Annual Report 2017-18
106
NOTE - 8 TRADE PAYABLES(`inLakh)
Particulars As At 31.03.18 As At 31.03.17Trade PayablesDuetoMSMEUnits 0.00 0.00DuetoOthers 18512.24 18512.24 13000.82 13000.82DuetoRelatedParties 0.00 0.00Others 0.00 0.00As per Balance Sheet 18512.24 13000.82
NOTE - 9 OTHER CURRENT LIABILITIES(`inLakh)
Particulars As At 31.03.18 As At 31.03.17CurrentMaturitiesofLong-TermDebt 279.23 241.78CurrentMaturitiesofLongTermProvisions 1070.82 598.47AmountsPayabletoGovernmentofIndiaagainstSurplusinGrants 0.00 2738.77InterestAccruedButNotDueonBorrowings/CSD 10.05 16.02FamilyPensionandProvidentFundPayable 119.29 118.40OtherPayables-Employees 1197.19 1282.79OtherPayables-Taxes 468.49 561.30OtherPayables 2505.21 2083.35SecuritiesDepositPayable 582.44 625.27IncomeReceivedinAdvance 2338.27 2319.59EarnestMoneyDeposit(EMD) 66.82 180.35BalanceDuetoTradeReceivables 157.98 44.10DiscountPayable 1218.29 1442.46PayabletoRMSuppliers 238.81 99.76AdvancefromRMABuyers 3890.42 3471.34PayableforProjects 443.41 1470.89PayabletoRatingAgencies 709.98 2042.54As per Balance Sheet 15296.70 19337.18
Annual Report 2017-18
107
AN
NEX
UR
E - 9
A A
MO
UN
TS P
AYA
BLE
TO
GO
VER
NM
ENT
OF
IND
IA A
GA
INST
SU
RPL
US
IN G
RA
NTS
(` in
lakh
)
Part
icul
ars
Bal
ance
Bro
ught
Fo
rwar
d Fr
om
Prev
ious
Yea
r
Gra
ntR
ecei
ved/
Inte
rest
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rned
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urin
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ar
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mb/
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efun
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ustm
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sset
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ss o
f Ex
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er In
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e (T
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rom
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om. t
o C
om.)
Rei
mbu
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le
Expe
nditu
re
As
at 3
1/03
/18
Defi
cit
Surp
lus
Defi
cit
Surp
lus
Mar
ketin
g A
ssis
tanc
e Sc
hem
eMarketingAssistanceSchem
e52.55
0.00
947.76
52.55
0.00
742.89
742.89
0.00
742.89
0.00
204.87
MarketingAssistanceSchem
e-SC
SP0.00
24.39
0.00
-24.40
0.00
0.00
0.00
0.00
0.00
0.01
0.00
MarketingAssistanceSchem
einNER
0.00
0.00
3.82
0.00
0.00
22.93
22.93
0.00
22.93
19.11
0.00
Sub
Tota
l52
.55
24.3
995
1.58
28.1
60.
0076
5.82
765.
820.
0076
5.82
185.
75Pe
rfor
man
ce a
nd C
redi
t Rat
ing
Sche
me
PerformanceandCreditR
ating
Scheme
0.00
807.15
582.87
-1187.46
0.00
1026.03
1026.03
0.00
1026.03
823.47
0.00
PerformanceandCreditR
ating
Scheme-SCSP
37.58
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
37.58
0.00
PerformanceandCreditR
ating
Scheme-T
SP
0.00
6.15
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
6.15
PerformanceandCreditR
ating
SchemeinNER
0.00
56.28
0.00
0.00
0.00
6.44
6.44
0.00
6.44
0.00
49.84
Sub
Tota
l37
.58
869.
5858
2.87
-118
7.46
0.00
1032
.47
1032
.47
0.00
1032
.47
805.
06InternationalC
o-operation,
Modernization&Technology
Upgradation
45.38
0.00
0.00
45.38
0.00
0.00
0.00
0.00
0.00
0.00
0.00
NorthEastE
xpo
7.00
0.00
0.00
7.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
DST
-ST
EP(S
&TProject)
0.00
0.08
0.00
0.00
0.08
0.00
0.08
0.00
0.08
0.00
0.00
AssistanceforTrainingtoInstitutions
0.00
2056.98
305.22
-21.92
1938.35
249.37
2187.72
0.00
2187.72
0.00
152.56
Trainingcum
Incubation
0.00
109.66
53.47
-19.86
87.39
0.00
87.39
0.00
87.39
0.00
55.88
Nat
iona
l SC
-ST
Hub
(NSS
H)
SCSP
338.02
0.00
2700.31
-1078.81
0.00
2372.87
2372.87
0.00
2372.87
1089.39
0.00
TSP
3.22
161.84
1933.60
-891.79
0.00
531.80
531.80
0.00
531.80
0.00
668.63
NER
0.00
0.00
603.45
-400.00
0.00
202.58
202.58
0.00
202.58
0.00
0.87
General
0.00
0.00
403.67
0.00
0.00
436.34
436.34
0.00
436.34
32.67
0.00
Sub
Tota
l (N
SSH
)34
1.24
161.
8456
41.0
3-2
370.
600.
0035
43.5
935
43.5
90.
0035
43.5
945
2.56
Gra
nd T
otal
483.
7532
22.5
375
34.1
7-3
519.
3020
25.8
255
91.2
576
17.0
70.
0076
17.0
7-8
63.4
3
Net
Sur
plus
/ (D
efici
t)-8
63.4
3Pr
evio
us Y
ear S
urpl
us /
(Defi
cit)
2738
.77
Annual Report 2017-18
108
NOTE - 10 SHORT TERM PROVISIONS(` in lakh)
Particulars As At 31.03.18 As At 31.03.17Provisions for Employee BenefitsForPayRevision 2328.11 2328.11 0.00 0.00OthersForDoubtfulDebts&Advances 11165.91 11386.47Less:AdjustmentaspercontraagainstTradeReceivables,Loans&Advances,etc. 11165.91 0.00 11386.47 0.00
Particulars As At 31.03.18 As At 31.03.17Trade InvestmentsInvestmentsinProperties 0.00 0.00InvestmentsinEquityInstruments 0.00 0.00InvestmentsinPreferenceShares 0.00 0.00InvestmentsinGovernmentorTrustSecurities 0.00 0.00InvestmentsinDebenturesorBonds 0.00 0.00InvestmentsinMutualFunds 0.00 0.00InvestmentsinPartnershipFirms 0.00 0.00OtherNon-CurrentInvestments 0.00 0.00 Sub Total 0.00 0.00Other InvestmentsInvestmentsinProperties 0.00 0.00InvestmentsinEquityInstruments 21.03 22.55InvestmentsinPreferenceShares 0.00 0.00InvestmentsinGovernmentorTrustSecurites 0.00 0.00InvestmentsinDebenturesorBonds 0.00 0.00InvestmentsinMututalFunds 0.00 0.00InvestmentsinPartnershipFirms 0.00 0.00OtherNon-CurrentInvestments 0.00 0.00 Sub Total 21.03 22.55Total 21.03 22.55Less:ProvisionforDimunitionintheValueofNonCurrentInvestments 15.00 15.00As per Balance Sheet 6.03 7.55
ANNEXURE - 12A DETAILS OF AGGREGATE QUOTED AND UNQUOTED NON-CURRENT INVESTMENTS(`inLakh)
Particulars As At 31.03.18 As At 31.03.17AggregateamountofQuotedInvestments(Marketvalueof` 235.68lakh(PreviousYear` 235.34lakh)
6.03 7.55
AggregateamountofUnquotedInvestments 15.00 15.00
ANNEXURE - 12B DETAILS OF NON-CURRENT NON-TRADE INVESTMENTS(`inLakh)
Particulars As At 31.03.18 As At 31.03.174,70,230(aftersub-divisionbyM/sSingerIndiaLtd.at̀ 2/-eachfullypaid-[94,046 shares of `10/- each before sub-division] (Prev. Year 1,17,700Equity Shares ofM/s Singer India Ltd. of `10/- each fully paid 1.095%holding).(MarketValue`235.68lakh@`50.12pershare(BSE)(MarketValue`235.34lakh@`199.95pershareinpreviousyear)
ANNEXURE - 13A DETAILS OF LONG TERM LOANS & ADVANCES(`inLakh)
Particulars As At 31.03.18 As At 31.03.17 Term LoanSecuredConsideredGood 10.09 10.09UnsecuredConsideredGood 0.00 0.00ConsideredDoubtful(InclIntt.SuspenseContra) 5.35 5.35
Contra 103.32 3.33 15.29 139.16 Total 82.55 221.95Loans and Advances to Related PartiesSecuredConsideredGood 0.00 0.00UnsecuredConsideredGood 0.00 0.00ConsideredDoubtful 0.00 0.00
ANNEXURE - 13B DETAILS OF LONG TERM LOANS & ADVANCES (INCLUDED UNDER LOANS AND ADVANCES TO EMPLOYEES) DUE BY DIRECTORS OR OTHER OFFICERS OF THE CORPORATION
(`inLakh)Particulars As At 31.03.18 As At 31.03.17Directors* 0 0OtherOfficersoftheCompany* 11.42 17.50FirminwhichDirectorisaPartner* 0 0PrivatecompanyinwhichDirectorisamember 0 0Total 0 0[*]Eitherseverallyorjointly.
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NOTE - 14 OTHER NON-CURRENT ASSETS(`inLakh)
Particulars As At 31.03.18 As At 31.03.17Long Term Trade Receivables (Including Trade Receivables on Deferred Credit Terms)SecuredConsideredGood 0.00 0.00UnsecuredConsideredGood 0.00 0.00ConsideredDoubtful 0.00 0.00
0.00 0.00Less:ProvisionforDoubtfulDuesasperContra 0.00 0.00 0.00 0.00Others 57.93 71.08Debts due by Related PartiesSecuredConsideredGood 0.00 0.00UnsecuredConsideredGood 0.00 0.00ConsideredDoubtful 0.00 0.00
ANNEXURE - 14A DETAILS OF OTHER NON-CURRENT ASSETS(`inLakh)
Particulars As At 31.03.18 As At 31.03.17Interest Accrued but not DueOnFixed/ShortTermDeposits 0.00 0.00OnOthers 57.93 57.93 71.08 71.08Total 57.93 71.08
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NOTE - 15 CURRENT INVESTMENTS(`inLakh)
Particulars As At 31.03.18 As At 31.03.17InvestmentsinProperties 0.00 0.00InvestmentsinEquityInstruments 0.00 0.00InvestmentsinPreferenceShares 0.00 0.00InvestmentsinGovernmentorTrustSecurities 0.00 0.00InvestmentsinDebenturesorBonds 0.00 0.00InvestmentsinMutualFunds 0.00 0.00InvestmentsinPartnershipFirms 0.00 0.00OtherCurentInvestments 0.00 0.00Total 0.00 0.00Less:ProvisionforDimunitioninthevalueofCurrentInvestments 0.00 0.00As per Balance Sheet 0.00 0.00
ANNEXURE - 15A DETAILS OF AGGREGATE QUOTED AND UNQUOTED CURRENT INVESTMENTS(`inLakh)
Particulars As At 31.03.18 As At 31.03.17AggregateamountofQuotedInvestments(Marketvalueof`N/A(PreviousYear`N/A) 0.00 0.00
Particulars As At 31.03.18 As At 31.03.17RawMaterialsandComponents 1.02 2.60Work-In-Process 0 0FinishedGoods 2.16 13.58Stock-In-Trade 0 0StoresandSpares 9.93 7.55LooseToolsandMeasuringInstruments 6.02 5.41PatternsandMoulds 0 0Land&BuildinginStock,IndustrialEstate,Naini 19.65 19.65Goods-In-Transit 509.43 649.27Sub Total 548.21 698.06Less:ProvisionforObsoleteStock 0.06 8.54As per Balance Sheet 548.15 689.52
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116
NOTE - 17 TRADE RECEIVABLES(`inLakh)
Particulars As At 31.03.18 As At 31.03.17Trade Receivables Outstanding for a period exceeding six months from the date they are due for paymentSecuredConsideredGood 7556.74 5661.39UnsecuredConsideredGood 35.02 88.73ConsideredDoubtful(InclP.I.SuspenseContra) 1706.18 1797.94
8706.13 6928.61Less:ChequessentforCollection 0.00 0.00Less:ProvisionforDoubtfulDebtsasperContra 1114.37 7591.76 1178.49 5750.12Trade Receivables Outstanding for a period less than six months from the date they are due for paymentSecuredconsideredGood 8417.01 6468.50UnsecuredconsideredGood 114.01 54.95ConsideredDoubtful(InclP.I.SuspenseContra) 7.32 7.32
ANNEXURE - 17A DETAILS OF TRADE RECEIVABLE STATED ABOVE INCLUDE DEBTS DUE BY DIRECTORS OR OFFICERS OF THE CORPORATION
(`inLakh)
Particulars As At 31.03.18 As At 31.03.17Directors* 0 0OtherOfficersoftheCompany* 0 0Firminwhichdirectorsisapartner* 0 0PrivateCompanyinwhichdirectorisamember 0 0Total 0 0[*]Eitherseverallyorjointly.
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117
ANNEXURE - 17B DETAILS OF TRADE RECEIVABLES(`inLakh)
Particulars As At 31.03.18 As At 31.03.17TRADE RECEIVABLES - HIRE PURCHASE Trade Receivables Outstanding for a period exceeding six
month from the date they are due for paymentSecuredConsideredGood 0 0UnsecuredConsideredGood 0 0ConsideredDoubtful(InclP.I.SuspenseContra) 923.72 1044.70
637.89 721.83Less:ChequessentforCollection 0 0Less:ProvisionforDoubtfulDebtsasperContra 637.89 0.00 721.83 0 Trade Receivables Outstanding for a period less than six
months from the date they are due for paymentSecuredConsideredGood 0 0UnsecuredConsideredGood 0 0ConsideredDoubtful(InclP.I.SuspenseContra) 0 0
0 0Less:PenalInterestSuspense 0 0
0 0Less:ChequessentforCollection 0 0Less:ProvisionforDoubtfulDebtsasperContra 0 0 0 0 Sub Total 0 0TRADE RECEIVABLES - LEASING Trade Receivables Outstanding for a period exceeding six
month from the date they are due for paymentSecuredConsideredGood 0 0UnsecuredConsideredGood 0 0ConsideredDoubtful(InclP.I.Suspense&SeizedLeased
96.77 110.60Less:ChequessentforCollection 0 0Less:ProvisionforDoubtfulDebtsasperContra 96.77 0 110.60 0 Trade Receivables Outstanding for a period less than six
months from the date they are due for paymentSecuredConsideredGood 0 0UnsecuredConsideredGood 0 0ConsideredDoubtful 0 0
0 0Less:ChequessentforCollection 0 0Less:ProvisionforDoubtfulDebtsasperContra 0 0 0 0 Sub Total 0 0
Annual Report 2017-18
118
ANNEXURE - 17B DETAILS OF TRADE RECEIVABLES(`inLakh)
Particulars As At 31.03.18 As At 31.03.17TRADE RECEIVABLES - MARKETING Trade Receivables Outstanding for a period exceeding six
month from the date they are due for paymentSecuredConsideredGood 7383.60 5568.80UnsecuredConsideredGood 35.02 88.73ConsideredDoubtful 305.42 265.49
7724.04 5923.02Less:PenalInterestSuspense 0 0
7724.04 5923.02Less:ChequessentforCollection 0 0Less:ProvisionforDoubtfulDebtsasperContra 305.42 7418.62 265.49 5657.53 Trade Receivables Outstanding for a period less than six
months from the date they are due for paymentSecuredConsideredGood 8291.32 6328.63UnsecuredConsideredGood 75.63 30.94ConsideredDoubtful 0 0
8366.95 6359.57Less:PenalInterestSuspense 0 0
8366.95 6359.57Less:ChequessentforCollection 0 0Less:ProvisionforDoubtfulDebtsasperContra 0 8366.95 0 6359.57 Sub Total 15785.57 12017.10TRADE RECEIVABLES - OTHERS Trade Receivables Outstanding for a period exceeding six
month from the date they are due for paymentSecuredConsideredGood 173.14 92.59UnsecuredConsideredGood 0 0ConsideredDoubtful(InclP.I.Suspense/ReceivableContra) 238.39 230.18
247.43 173.16Less:ChequessentforCollection 0 0Less:ProvisionforDoubtfulDebtsasperContra 74.29 173.14 80.57 92.59 Trade Receivables Outstanding for a period less than six
months from the date they are due for paymentSecuredConsideredGood 125.69 139.87UnsecuredConsideredGood 38.38 24.01ConsideredDoubtful(InclP.I.Suspense/ReceivableContra) 7.32 7.32
171.39 171.20Less:PenalInterestSuspense 7.32 7.32
164.07 163.88Less:ChequessentforCollection 0.05 0.15Less:ProvisionforDoubtfulDebtsasperContra 0 164.02 0 163.73 Sub Total 337.16 256.32Total 16122.73 12273.42
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119
NOTE - 18 CASH AND OTHER BANK BALANCES(`inLakh)
Particulars As At 31.03.18 As At 31.03.17(i) Cash & Cash Equivalents Balances with BanksInCurrentAccounts 3694.53 4388.30InDepositAccounts 0 0InFixedDeposits-Maturingover12Months 0 0InFixedDeposits-Maturingupto3Months 1895.22 4950.88InFixedDeposits-Maturingmorethan3Months
* This includes an amount of Rs 17057.38 lakh receivable from United Bank of India on account of BG invoked in July-Aug., 2016
ANNEXURE - 19A DETAILS OF SHORT TERM LOANS & ADVANCES (INCLUDED UNDER LOANS AND ADVANCES TO EMPLOYEES) DUE BY DIRECTORS OR OTHER OFFICERS OF THE CORPORATION
(`inLakh)Particulars As At 31.03.18 As At 31.03.17Directors* 0 0OtherOfficersoftheCompany* 0 0FirminwhichDirectorisaPartner* 0 0PrivatecompanyinwhichDirectorisamember 0 0Total 0 0[*]Eitherseverallyorjointly.
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122
ANNEXURE - 19B DETAILS OF OTHER SHORT TERM LOANS AND ADVANCES(`inLakh)
Particulars As At 31.03.18 As At 31.03.17OTHER LOANS AND ADVANCES Raw Material Distribution (RMD)SecuredConsideredGood 1220.10 1220.10UnsecuredConsideredGood(BackedbyBG) 270330.06 279432.44ConsideredDoubtful(InclIntt.SuspenseContra) 8153.42 8426.26
Particulars As At 31.03.18 As At 31.03.17Security DepositsSecuredConsideredGood 5.10 101.21UnsecuredConsideredGood 25.15 41.58ConsideredDoubtful 0.24 0.24
ANNEXURE - 20A DETAILS OF OTHER CURRENT ASSETS - OTHERS(`inLakh)
Particulars As At 31.03.18 As At 31.03.17Interest Accrued but not dueOnFixed/ShortTermdeposits 1.55 3.78OnOthers 22.67 24.22 25.06 28.84Interest ReceivableFromBanks 273.70 268.62Less:ProvisionforInterestReceivableasperContra 268.30 5.40 268.30 0.32AmountsReceivablefromGovernmentofIndiaagainstDeficitinGrants 863.42 0 0
Total 893.04 29.16
Annual Report 2017-18
124
NOTE - 21 REVENUE FROM OPERATIONS (CONSOLIDATED)(`inLakh)
Particulars For the Year Ending 31.03.18
For the Year Ending 31.03.17
SaleofProducts 205780.73 179098.05SaleofServices 6088.40 5819.56InterestEarned 35820.07 39105.90ProcessingFees/ServiceChargesEarned 5188.98 5493.60OtherOperatingRevenues 703.68 1369.68As per statement of Profit and Loss 253581.86 230886.79Sale of ProductsMarketing 22370.10 18964.40Export 0 381.11RawMaterialDistribution* 183410.63 159752.54 Total (A) 205780.73 179098.05Sale of ServicesIncomefromGovernmentPurchaseRegistration 1362.06 1406.55IncomeoninformediaryServices 326.03 310.91ApplicationProcessingFees 3.86 4.05Licence&HouseKeepingFees 1059.05 815.14Rent 459.67 741.99RealizationfromTrainingActivities 1431.13 1217.13RealizationonaccountofCommonFacilities 676.58 580.88IncomefromExhibitionCentres 397.49 319.77ReceiptsfromExhibitions,Seminars,Meets,Conferences
As per Statement of Profit and Loss 5591.24 6457.57
NOTE - 24 PURCHASES OF STOCK IN TRADE (CONSOLIDATED)(`inLakh)
Particulars For the Year Ending 31.03.18
For the Year Ending 31.03.17
Marketing ActivityMarketing 22365.63 18948.45Export 0 311.42RawMaterialDistribution* 182254.54 158976.15As per Statement of Profit and Loss 204620.17 178236.02
(`inLakh)
* Details of Raw Material DistributionParticulars 2017-18 2016-17
Aluminium 73537.59 64053.04
Iron&Steel 98605.17 80671.26
Others 10111.78 14251.85
Total 182254.54 158976.15
Annual Report 2017-18
126
NOTE - 25 CHANGES IN INVENTORIES (CONSOLIDATED)(`inLakh)
Particulars For the Year Ending 31.03.18
For the Year Ending 31.03.17
Finished Goods:ClosingStock 2.16 13.76Less:OpeningStock 13.76 10.88AdjustmentinStock 8.72 (2.88) 0 2.88Work in Process:ClosingStock 0 0Less:OpeningStock 0 0AdjustmentinStock 0 0 0 0Goods-In-Transit (117.09) 649.27As per Statement of Profit and Loss (119.97) 652.15
Other Finance Charges 32.20 20.00As per Statement of Profit and Loss 13340.85 19748.00
NOTE - 28 DEPRECIATION AND AMORTIZATION (CONSOLIDATED)(`inLakh)
Particulars For the Year Ending 31.03.18
For the Year Ending 31.03.17
Depreciation onFixedAssets 569.18 488.39LeasedAssets 0 0Assets acquired against GrantsDepreciationasperContra 252.87 151.18Less:ReplacementReserveasperContra 252.87 0 151.18 0As per Statement of Profit and Loss 569.18 488.39
NOTE - 29 CORPORATE SOCIAL RESPONSIBILITY
Expenses required to be incurred Rs 302.84 lakh during 2017-18
S.No. Particulars
For the Year Ended 31.03.2018 For the Year Ended 31.03.2017
AwarenessGenerationandPublicity 1046.85 0Technical&ManagerialSupporttoSC/STHub 315.71 0 Total 1837.90 0
NOTE - 31 PRIOR PERIOD ADJUSTMENTS (CONSOLIDATED)(`inLakh)
Particulars For the Year Ending 31.03.18
For the Year Ending 31.03.17
IncomeInterestandServiceCharges 13.64 10.14OtherIncome 19.12 0Depreciation 0 32.76 0 10.14ExpenditureEmployeesRemuneration&OtherBenefits 0 0Depreciation 0 0Interest 0 0OtherExpenses 8.64 8.64 25.96 25.96As per Statement of Profit and Loss 24.12 (15.82)
Annual Report 2017-18
131
NOTE - 32 TAX EXPENSE (CONSOLIDATED)(`inLakh)
Particulars For the Year Ending 31.03.18
For the Year Ending 31.03.17
Provisions for Current TaxProvisionforCurrentTax 5740.00 6100.00ProvisionforDeferredTax (483.21) (219.25)ProvisionforWealthTax 0 0ProvisionforFringeBenefitTax 0 5256.79 0 5880.75Adjustment for Previous Year TaxesProvisionforTax 7.53 (13.43)ProvisionforDeferredTax 0 7.53 0 (13.43)MATCreditEntitlement 0 0As per Statement of Profit and Loss 5264.32 5867.32
NOTE - 33 EARNINGS PER EQUITY SHARE (CONSOLIDATED)(`inLakh)
NOTE - 34 CONTINGENT LIABILITIES & COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR) (CONSOLIDATED)
(`inLakh)
ParticularsFor the
Year Ending 31.03.18
For the Year Ending
31.03.17(i) Contingent Liabilities:ClaimsagainsttheCoporationnotacknowledgedasDebts 125.12 165.13Guarantees 0 0DisputedIncomeTax,InterestTax,SalesTax,TradeTaxdemand. 550.40 1082.19OthermoneyforwhichtheCorporationiscontingentlyliable 153.35 387.33 As per Statement of Profit and Loss 828.87 1634.65(ii) Commitments:EstimatedamountofContractsremainingtobeexecutedonCapitalaccountandnotprovidedfor(netofadvances) 5575.87 5414.62
UncalledLiabilityonsharesandotherinvestmentspartlypaid. 0 0OtherCommitments 0 0As per Statement of Profit and Loss 5575.87 5414.62
Annual Report 2017-18
132
NOTE – 35 Additional notes forming an integral part of the financial statements for the year ended 31st March, 2018.1. Letters seeking confirmation for year-end
outstandingbalanceshavebeensenttotradereceivables, creditors, contractors’ advances,deposits, borrowers etc. (except in caseswhere recovery certificate has been issuedand / or under litigation) with a request toconfirmorsendcommentwithinthestipulatedperiodfailingwhichbalanceasindicatedintheletter would be taken as confirmed. Further,noadversecommunicationhasbeenreceivedfromanyunit.Moreover,reconciliationsoftheaccounts with the units is carried out as anongoingprocess.
However, confirmations in some cases asdetailed below are awaited, the impact ofwhichintheopinionofthemanagementisnotsignificant:
2. The title deeds in respect of followingpropertieshavenotbeenexecutedinfavouroftheCorporation:
(` in Lakh)
S.No Particulars of the Property
Area As At 31.03.2018
As At 31.03.2017
Gross value
written down value (WDV)
Gross value
written down value (WDV)
1 LandatTechnicalCentreHowrah
49.94acres
1.60 1.60 1.60 1.60
2 FlatsatBranchOfficeMumbai
3660.00sqft.
11.52 5.87 11.52 6.06
3. The provision for exchange variation lossesfor loans under Kreditanstalt West Germany(KFW)creditlineshavebeencreatedasperthetermsandconditionsoftheloanagreements:
a) Under XIth line of credit, provision forexchange variation losses of ` 239.19lakh (` 232.70 lakh) has been createdduring the year for meeting exchangevariation losses. During the year, theexchange variation loss was `344.82lakh (`Nil) which has been adjustedfrom provision of `239.19 lakh and theremaining exchange variation loss of`105.63 lakh has been charged to P&Landprovisionof`nil (`232.70 lakh) hasbeen written back and utilized for thepromotional activities as per terms andconditionsoftheloanagreement.
b) The provision for exchange variationlosses for loansunderKFWcredit lineXIIth hasbeen createdasper the loanagreement. Under KFW XIIth line ofcredit,outoftheprovisionforexchangevariation createdduring the year, 80%of the provision is to be utilized formeetingexchangevariationlossesandthe balance left out from the 80%, ifany, is to be retained tomeet out theexchangevariationlossesinfuture.
Accordingly, total provisions amountingto ` 283.14 lakh (` 279.29 lakh) havebeenmadeduringtheyearforexchangevariationunderXIIth lineofcredit,outofwhich 80% i.e. ` 226.51 lakh (Nil) hasbeenutilizedagainstexchangevariation
Annual Report 2017-18
133
loss during the year and balance 20%i.e. ` 56.63 lakh (` 55.86 lakh) hasbeen utilized for promotional purposesasper termsandconditionsof the loanagreement.
During the year, the exchange variationloss was ` 338.75 lakh (Nil) which hasbeen adjusted from 80%provision i.e ` 226.51 lakh (Nil) and balance ` 112.24lakh (Nil) has been adjusted from theprovision for exchange variation lossesmade in thepastyears.Thecumulativeretainedprovisiononthisaccountason31.03.2018 is `1552.35 lakh includingprovisionof` Nilfortheyear(` 1664.59lakh) to meet out exchange variationlossesinfuture.
4. Trade Receivables and Loans & Advances(relating to Hire Purchase, EquipmentLeasing,Marketing,RawMaterialAssistance,BillsDiscounting,CompositeTermLoan,TermLoan, etc.) amounting to ` 298627.32 lakh(` 304196.62 lakh)comprisingof receivablesand advances (backed with the security ofBG and amounts payable to suppliers and /or recoverable fromGovernmentDepartment/ PSUs) amounting to ` 287866.80 lakh(` 293123.53lakh)onwhichprovisionsarenotrequiredtobemadeasperprovisioningnormsduly approved by the Board of Directors.Against the remainingamountof` 10760.52lakh(` 11073.09lakh),provisionof̀ 10760.52lakh (` 11073.09 lakh) has been made fordoubtfulreceivablesandloans&advancesinlinewiththenormsapprovedbytheBoard.
5. (a)DuringthemonthofJune2016,7casesofforgedBankGuarantees (BGs)amounting to₹1600lakhwasdetectedatBOAbdulHamidStreetandBOSalt Lake, located inKolkata.Immediately, complaints were lodged withCBI, Kolkata. However, 100% provision wasmade for the outstanding duesamounting to`1473.13lakh(5casesworth` 1079.32lakhagainstBGsof` 1200lakhatBOKolkataand2casesworth` 393.81lakhagainstBGsof` 400lakhatBOSaltLake).
(b) Thereafter, on obtaining re-confirmationofBGs,heldbyallofficesoftheCorporation,fromtheBGissuingbanksandtheirrespectiveZonal / Controlling offices, United Bank ofIndia(UBI)branchesatJadvapurVidyapeethandHazraRoadhadinformedthatin61casesinvolvingtotalBGsof` 17350lakh,theBGshad either been invoked (55 cases worth₹15550 lakh) or not issued by the Banks (6casesworth` 1800lakh). Inall thesecases,the original BGs issued by the banks werelying in thesafecustodyofNSIC’sBOAbdulHamid Street (29 cases having outstandingbalance of ` 7711.93 lakh against BGs of ` 7850.00lakh),BOSaltLake(21caseshavingoutstandingbalanceof` 6147.34lakhagainstBGsof` 6300.00lakh),BODurgapur(mergedinBOKolkataduring2017-18)(9caseshavingoutstandingbalanceof` 2698.23lakhagainstBGs of ` 2700.00 lakh) & NTSCHowrah (2caseshavingoutstandingbalanceof` 499.88lakhagainstBGsof`500.00lakh)andhadnotbeeninvokedbythem.
Immediately on noticing the aforesaidirregularities FIR was lodged on 26.07.2016withtheOfficerinCharge,BidhanNagarNorthPoliceStation,SaltLake,KolkataandthecasewastransferredtoCIDKolkata,WestBengal.As informed by the CID, charge-sheet hasbeenfiled in thesaidcase.Asapartof theirinvestigation,theCID,alsoreferredtheoriginalBGsandrelateddocuments,seizedfromNSICandUBIofficestotheirforensiclab(i.e.QDEB-QuestionedDocumentsExaminationBureau)for examination.ThefindingsofQDEBasinformedtotheHon’blecourtbyCIDinter-aliamentionthatUnitedBankofIndiahadissuedtwo sets of Bank Guarantees of the samenumber,which iscontrary to the rules laid inBank’sManagementSystem.
NSIC, which was in possession of originalBGs, lodged invocation claims in July, 2016,in the aforesaid 61 cases valuing ` 17350lakh with UBI. The findings of QDEB alsocorroborate NSIC’s claim of holding originalbankguaranteesinallcasesvaluing` 17350lakh.
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134
Furtherconsideringall the facts, it transpiresthat;
► BankGuaranteesfoundtobeinpossessionofNSICareoriginalasper thefindingsofCIDbasedonQDEBReportandtheseBGswere duly verified and confirmed by UBIissuingBranchandtheconcernedregionaloffice before disbursement of advanceagainstRMA.
► UBl claims that they have fulfilled theirobligationbymakingpaymentonthebasisof alleged invocation of Bank Guarantees(during the period October, 2013 toDecember,2015)byissuanceofPayOrders(POs) in favour of NSIC. The aforesaidclaimdoesnotholdwaterasthefraudulentissuance of two sets of Bank guaranteesby United Bank of India and subsequentintimationbythebankthatsinceinvocationin respectof thoseBGshasalreadybeenmade, would not immune UBI from theirobligation for making payment since thisfactgetsfurtherreconfirmedastheNSICisstillholdingoriginalBGs,ascorroboratedbyQDEBreportmentionedabove.
► It becomes apparent that UBI with somemalafide intention, issued twosetsofBGsofthesamenumber,onetoNSICandotherto the unit, which is contrary to the ruleslaiddownintheirmanagementsystemandagainstthebankingnorms.
► The Ministry of MSME (the administrativeMinistry of NSIC) after examination of thestatus of the case and findings of CID,West Bengal based on the QDEB report,has regularly taken up the matter withDepartmentofFinancialServices,Ministryof Finance (the administrative ministry ofUnited Bank of India) asking the later toimpress upon the bank to honour NSIC’srightfulinvocationofbankguaranteesworth` 17350 lakh together with interest fromthe date of invocation i.e. July 2016. ThematterisalsobeingtakenupwithMinistryofMSMEandMinistryofFinanceforresolutionof dispute between NSIC and UBI (both
being Central Government Organizations)in accordance with the guidelines ofDepartmentofPublicEnterprises.
Inviewoftheabove,outstandingbalanceof` 17057.38 lakh against theseBGs amountingto ` 17350 lakh has been considered goodbythemanagement.Hence,noprovisionhasbeen made their against. This amount of ` 17057.38lakhhasbeenregroupedandshownasrecoverablefromBankinNote-19.
c) In other 16 cases, where UBI hadreconfirmed the issuanceandvalidityofBGsvaluing` 4800 lakh(`600.00 lakhatBOSaltLake,` 600.00 lakhatBODurgapur now merged in B O Kolkataduring 2017-18 and ` 3600.00 lakh atNTSC Howrah), the invocation claimthereof was lodged by NSIC in July &August, 2016 and UBI has releasedpayment there against on 10.04.2017.The Ministry of MSME is regularlyfollowingupwithDepartmentofFinancialServicestoimpressuponthebanktopayinterest on delayed payment on bankguarantee proceeds from the date ofinvocation of bank guarantees in July /August,2016till thereleaseofpaymenttoNSICi.e.10.04.2017.
It is apt to mention that the intereston delayed period w.r.t. releasing thepayment by BG issuing bank againstinvokedBankGuaranteesvaluing`4800lakh has been claimed. However, suchinterestondelayedperiodhasnotbeenaccounted for in the books of accountsas thesameshallbe treatedas incomein theyearof its realization, in termsofaccountingpoliciesoftheCorporation.
d) Further, during the process of obtainingreconfirmation, it was found in case ofoneunitatNSICBOGhaziabad,thebankguaranteesof̀ 500lakhreportedtohavenotbeenissuedbythebranchofBankofBaroda.100%provisionof` 447.30lakhhasbeenmadefortheamountreceivablefrom the unit, after adjusting amountreceivedduringMay,2017.Thiscase isunderinvestigationofCBI.
Annual Report 2017-18
135
6. During the year, the Corporation has notreceivedanymemorandum(asrequiredtobefiledbythesupplierswiththenotifiedauthorityunder Micro, Small and Medium EnterprisesDevelopmentAct,2006)claiming their statusas Micro, Small and Medium Enterprises(MSME). Consequently, the amount paid /payableincludinginterest,ifany,tosuchunitsduringtheyearis`Nil.
7. Provision for current tax has been made aspertheprovisionsoftheIncomeTaxAct’1961.TheCorporationhasrecordednetdeferredtaxassetsarisingonaccountoftimingdifferencesas stipulated in Accounting Standard-22 on`Accounting for Taxes on Income’ issued bytheInstituteofCharteredAccountantsofIndia.The net deferred tax assets comprise of thefollowing:
8. In accordance with the guidelines ofDepartment of Public Enterprises, ad-hocprovisiononaccountofPerformanceRelatedPay(PRP)fortheyear2017-18amountingto` 505lakh(`549lakh)hasbeenmade.
10. Riskfundhasbeencreatedat0.40%(0.35%)oftheoutstandingattheendoffinancialyearundertheschemesofRawMaterialAssistance&BillDiscounting(securedbyBankGuarantee),TradeReceivables-Marketing(fromCentral&StateGovernment,Government Institutions /Companies/ Departments/ Bodies) and TermLoan (secured by EMD) by appropriation ofthe profit of ` 134.60 lakh (` 343.69 lakh).In addition, interest and service chargesamountingto`182.94lakh(`140.40lakh)onthe amount of fund at beginning of the yearis plough back by charging from the interestincomeunderRevenuefromOperations(Note21)ofStatementofProfit&Lossfortheyear.
11. AsapprovedbytheMinistryvide letterdated2.12.2016,Corpusformedicalschemeshavebeencreatedof` 248.00lakh(`235.42lakh)fortheemployeesretiredpriorto1.1.2007andof̀ 96.89lakh(` 95.48lakh)fortheemployeesretiredonorafter1.1.2007, inaccordancetothe DPE’s guidelines. These corpuses havebeen utilized for the payment of premium totheextentof` 86.78 lakh(` 68.58 lakh)and` 28.67lakh(`20.48lakh)respectivelyduringtheyear.
12. MinistryofMicro,Small&MediumEnterprisesvide their OM no. 9(10)/2016-SME dated 3rdMay2018hadconveyedtheapproval forthepay revision and other benefits of theBoardlevelandbelowBoard levelexecutives,non-unionised Supervisors and unionized staff oftheCorporationw.e.f01.01.2017.Accordingly,aprovisionof` 2328.11lakhhasbeencreatedduring theyear towardspayrevisionarrears.This provision is inclusive of the provisioncreated foremployees followingCDApatternw.e.f01.01.2016.
13. IncompliancewiththeprovisionsofAccountingStandard 29 on ‘Provisions, ContingentLiabilitiesandContingentAssets’,therequireddisclosure in respect of details of additions,reversals and utilizations of provisions forEmployee Benefits, for the Financial Yearended31.03.2018isasgivenbelow:-
Annual Report 2017-18
136
(` inLakh)
Particulars
Opening Balance
as on 01.04.2017
Additions (+)/Write Back (-)
Utilization
Closing Balance
as on 31.03.2018
ForGratuity 3784.77 1343.18 327.55 4800.40
ForLeaveEncashment 2281.70 742.45 447.54 2576.61
ForLeaveTravelConcession
0.84 -0.59 0.00 0.25
ForHalfPayLeave 389.36 42.56 11.27 420.65
ForTAonRetirement 3.70 0.56 0.56 3.70
Total 6460.37 2128.16 786.92 7801.61
14. Employee Benefits:
a) Provisions and contribution towardsEmployee Benefits which inter-aliaincludes Short-Term benefits, post-retirement benefits, Other Long-Termbenefits and Termination benefits aremade based on actuarial valuationperformed by the independent actuaryand are charged to Statement ofProfit and Loss. Actuarial valuation ofemployees’benefitshasbeencarriedoutonthebasisofrevisedpay.
b) Generaldescriptionof typeofplanw.r.t.variousemployeebenefitschemesisasunder:
c) TheCorporation provides for liability onaccountofprovisionsforterminalbenefits
intheformofgratuity,leaveencashment,sick leave, TA on retirement and LTCfor CDA employees, being payableby the Corporation to its employeesas “Post-Employment Benefit Plans”under “Defined Benefit Plan” in termsof disclosure requirement as per para120(b)undertheprovisionofAccountingStandard-15 on “Employee Benefits(Revised2005)”.
d) Theprojectedunitcredit(PUC)actuarialmethod is used to assess the plan’sliabilitiesofexitemployeesforretirement,death-in-service and withdrawals(Resignations/Terminations).UnderthePUCmethod,aprojectedaccruedbenefitis calculated at the beginning of theperiodandagainattheendoftheperiodfor each benefit that will accrue for allactivememberoftheplan.Theprojectedaccrued benefit is based on the planaccrual formula and upon service as ofthebeginningorendofperiod,butusingmember’s final compensation, projectedto the age at which the employee isassumed to leave active service. Theplanliabilityistheactuarialpresentvalueof the projected accrued benefits as onthedateofvaluation.
V) Based on actuarial certificates, the Corporation`s best estimate of benefits expected to be paid during the annual period beginning after the balance sheet date.
Particulars Amt in lakhGratuity 741.02EarnedLeave 442.47SickLeave 91.72TAonRetirement 0.59LTC 0.04
15. Segment Reporting: -
NSIC’s activities are broadly classified into ‘Promotional’ and ‘Commercial’.The ‘Promotional’ activitiesincludetheactivitiesforwhichbudgetarysupportisprovidedtotheCorporationbytheGovernmentand/oritsagencies.Theschemesof‘MarketingAssistanceSchemeforMSMEs’,‘Performance&CreditRatingSchemeformicroandsmallenterprises’, ‘AssistanceforTrainingtoInstitutions’and‘NationalScheduleCaste-ScheduleTribeHub’etc.,forwhichbudgetarysupporthasbeenprovidedtotheCorporationalongwithadministrativeexpenditurerestrictedtothetuneof10%ofthetotalexpenditureunderMASand7.5%ofthetotalexpenditureunderPCRSandNSSHSchemeforimplementationofsuchschemes,getreflectedunder the ‘Promotional’ activity. Theexpenses towards organization / participation in exhibitions (bothdomesticand international),buyersellersmeet, intensivecampaigns,othermarketingsupport services(advertisement,publicityetc.),ratingofMSEsandtrainingexpensesaremetoutofthebudgetarysupportprovidedfortheaboveschemes.
The‘Commercial’activitiesinter-aliaincludestheactivitieswherebytheCorporationprovides‘Marketing(including tender marketing and Raw Material Distribution)’, ‘Credit’, ‘Technology’ and ‘other support’services tocater to thediverseneedsof theMSMEs.TheCorporation funds these ‘Integrated’supportservices.Inaddition,activitiesnotmetoutofthebudgetarysupportbutwhicharepromotionalinnature(since carriedoutwith the intent to support theMSMEs)aremergedwith commercial activities as theexpensesofsuchactivitiesarebornebytheCorporation.Accordingly,theactivitiesoftheCorporationhavebeendividedintotwosegmentsnamely“Commercial”&“Promotional”.
The following tablepresents the revenue,profit/(loss),assetsand liabilities information to theBusinesssegmentsfortheyearended31stMarch,2018asrequiredbyAS-17on“SegmentReporting”issuedbytheInstituteofCharteredAccountantofIndia.
(` inLakh)
Description For the year ended 31.03.2018 For the year ended 31.03.2017A. Primary Segment –
Business Segment Promotional Commercial Total Promotional Commercial Total
I. SEGMENT REVENUE
a. SegmentRevenue (includinggrant)
-Sale of Product - 205780.73 205780.73 - 179098.05 179098.05
-Sale of Services 118.47 5969.93 6088.40 220.11 5599.45 5819.56
16. Related Party Disclosure: -IncomplianceofAccountingStandard–18onrelatedpartydisclosuresissuedbytheInstituteofCharteredAccountantsofIndia,therequiredinformationisgivenasunder:-
Further,Corporatedividendanddividenddistributiontaxpertainingtofinancialyearended31March2018,shall be accounted for in the ensuing financial year after approval of Shareholders atAnnualGeneralMeeting inaccordancewith revisedAccountingStandard (AS) -4 ‘ContingenciesandEventsoccurringafterBalanceSheetdate’asnotifiedbytheMinistryofCorporateAffairsthroughamendmentstoCompanies(AccountingStandards)AmendmentRules,2016,datedMarch30,2016.
20. Ratings assigned by credit rating agencies and migration of ratings during the year
24. Incomplianceofsection45-1AofReserveBankofIndiaAct.1934,theCorporationhasbeengrantedCertificateofRegistrationno.N-14.03090dated29.12.2005tocommence/carryonthebusinessofnon-bankingfinancialinstitution.However,inviewofRBIcircularNo.DNBR(PD)CCNo.043/03.10.119/2015-16dated1stJuly,2015,theCorporation,beingaGovernmentofIndiaEnterprise,hasbeenexemptedfrom compliance of RBI Prudential Norms relating to NBFCs.Accordingly, sector-wise NPAs andmovementofNPAsisnotapplicabletotheCorporation.
25. Exposure Related Disclosures a. Exposure to Real Estate sector: TheCorporationhasnoexposuretorealestatesectorason
31stMarch,2018(PreviousYearNil). b. Exposure to Capital market: The Corporation has no exposure to capital market as on
31stMarch,2018(PreviousYearNil).
26. Concentration of Advances, Exposures and NPAs:
Particulars Year ended 31.03.2018
Year ended 31.03.2017
ConcentrationofAdvancesTotalAdvancestotwentylargestborrowers(₹inlakh) 11135.41 10417.34Percentage of Advances to twenty largest borrowers to totalAdvancesoftheCorporation 4.10 3.71
Particulars As At 31.03.18 As At 31.03.17Expenditure in Foreign CurrencyOnaccountofrepaymentofprincipalofloansfromKreditanstalt,WestGermany(KFW) 26.05 254.00
Net Profit (Loss) Before Tax 15,204.98 16507.17Adjustments for:Profit (-) / Loss on Sale of Fixed Assets (30.83) (4.84)Depreciation & Amortization Expenses 569.18 488.39Lease Terminal Adjustment 49.39 (0.37)Provisions and Contingencies 3,512.02 1012.54Profit (-) / Loss on Sale of Investments (62.00) (9.08)Excess Provisions Written Back (316.66) (520.08)Loss / (-) Gain on Exchange Rate Fluctuation 185.26 (401.68)Bad Debts Written off 134.73 457.26Dividend from Investments (4.02) (3.04)Provision for Obsolete Stock 0.06 8.54Interest Accrued but not due on Borrowings 10.05 16.02Interest on Short /Fixed Term Deposit (5.96) (3.04)Operating Profit Before Working Capital Changes 19,246.20 17547.79Adjustment for Working Capital Changes :Inventories 141.37 (603.33)Trade Advances & Receivables 9,156.19 17326.58Current Liabilities & Provisions (5,312.00) (1097.74)Cash Flows before Tax & Extra Ordinary Items 23,231.76 33173.29Taxes (5,167.26) (5702.17)Net Operating Cash Flow (A) 18,064.50 27471.13Cash Flow From Investing ActivitiesSale Proceeds of Assets Disposed off 3.57 9.9Sale Proceeds of Investments 60.48 9.32Increase in Fixed Assets and Capital W.I.P. (3,992.87) (3814.64)Fixed Assets (out of Grant) 1,919.60 129.91Capital Advances 0.42 (588.40)Loans and Advances to Employees 6.09 16.46Dividend from Investments 4.02 3.04Intt. On Short /Fixed Terms Deposits 5.96 3.04Net Investing Cash Flow (B) (1,992.73) (4231.37)Cash Flow from Financing ActivitiesNet Increase/ (Decrease) in Other Borrowings (15,772.20) (14743.69)Dividend Paid (Including Dividend Distribution Tax) (3,762.68) (3496.48)
Net Financing Cash Flow (C) (19,534.88) (18240.17)Net Cash Flow From Operating Activities (A) 18,064.50 27471.13Net Cash Flow From investing Activities (B) (1,992.73) (4231.37)Net Cash Flow From Financing Activities (C) (19,534.88) (18240.17)Net Changes in Cash & Cash Equivalents (A+B+C) (3,463.11) 4999.59Add.Cash & Cash Equivalents-Opening Balances 9,498.16 4498.58Cash & Cash Equivalents-Closing Balance 6,035.05 9498.16Add. Other Bank Balances in Fixed Deposits -maturing over 3 months 16.91 14.61Balance as per Note -18 Cash and Other Bank Balances 6,051.96 9512.77
THE NATIONAL SMALL INDUSTRIES CORPORATION LTD.[CINNo.:U74140DL1955GOI002481]
Cash Flow Statement attached to and forming part of the accounts for the Year Ended 31.03.2018
Statement of Accounting Policies and Notes on Accounts form an integral part of Financial Statements
As per our report of even date attached.For KPMC & AssociatesChartered Accountants
ExceptionalItems 0 0Profit before Prior Period Adjustments, Extraordinary Items and Tax -117.43 0
ExtraordinaryItems 0 0Profit before Prior Period Adjustments and Tax -117.43 0PriorPeriodAdjustments 0 0Profit before tax -117.43 0TaxExpense 0 0Net Income /(Expenditure) (Tfd to Note 23 of Grants & Subsidies - Consolidated) -117.43 0
OtherNotesonAccounts 35
THE NATIONAL SMALL INDUSTRIES CORPORATION LTD.[CINNo.:U74140DL1955GOI002481]
STATEMENT OF INCOME AND EXPENDITURE (PROMOTIONAL) FOR THE YEAR ENDED 31.03.2018
Statement of Accounting Policies and Notes on Accounts form an integral part of Financial Statements
As per our report of even date attached.For KPMC & AssociatesChartered Accountants
Pune NSICLimited,BranchOffice/NSSHNSICLimited,BranchOffice211/212,2ndFloor,TimesSquareBuilding,Pune-SataraRoad,NearSaibabaMandirPune-411037(Maharashtra)
N O T I C E Noticeisherebygiventhat63rdAnnualGeneralMeetingoftheMembersofTheNationalSmallIndustriesCorporationLimitedwill beheldonThursday the 20thSeptember, 2018at3.00p.m.at theRegisteredOfficeoftheCorporationtotransactthefollowingbusiness:
3. Toauthorize theBoardofDirectorsof theCompany in termsof theprovisionsofSection142(1)ofCompaniesAct, 2013 to fix remuneration of theStatutory&BranchAuditors of theCompanyappointedbyComptroller&AuditorGeneralofIndiau/s139(5)oftheCompaniesAct2013forthefinancialyear2018-19andtopassthefollowingresolution,withorwithoutmodification(s),asanOrdinaryResolution: