To the Members
NOESIS INDUSTRIES LIMITED
1. Report on the Financial Statements
We have audited the accompanying financial statements of Noesis Industries Ltd (thecompany) which comprise the balance sheet as at 31st March 2015 thestatement of Profit and Loss; the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information.
2. Managements Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies ; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.
3. Auditors responsibility
Our responsibility is to express an opinion on these financial statements based on ouraudit.
We have taken into account the provisions of the Act the accounting and auditingstandard and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143 (10) of the Act. The Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial controls relevant to the company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
4. Basis for Qualified Opinion Reference is invited to
(a) Note No. 26.12 Regarding the financial statements of the company being prepared ona going concern basis notwithstanding the fact that operations have been discontinuedLoss of Rs.1068.88 Lacs has been incurred during the year net worth is minus Rs.23611.26 Lacs and defaults towards repayment of dues to banks and financial institutionare of Rs. 21925.19 Lacs with no revival activity till date and norestructuring/sattlement by/with the lenders. We are of the opinion that there is nofeasibility for the company to carry on as a going concern unless additional funds areinfused loans are restructured and revival activities are restarted.
(b) Note No. 26.09 regarding non availability of confirmations of balances from loanlenders and of debit and/or credit balances of loans advances deposits trade payable Inthe absence of such confirmations any provision to be made for the adverse variation incarrying of amounts of these balances are not quantified as well as the quantum ofadjustment if any required to be made remain unascertained.
(c) Note No. 26.13 regarding non provision of penal interest on recalled banks loansdeclared as NPA. Liability for penal interest payable has not been quantified on accountof uncertainty and discretionary nature of penal interest if any payable.
(d) Note No. 26.17 regarding Non-provision of Interest on recalled banks loans declaredas NPA to the extent of Rs. 32.57 crores resulting in reduction of loss by Rs.32.57crores and understatement of minus net worth to the same extent.
5. Qualified Opinion
In our opinion and to the best of our information and according to the explanationgiven to us except for possible effects of the matters described in paragraph 4 above -the basis of qualified opinion the financial statements give a true and fair view :-
(a) In the case of the Balance sheet of the state of affairs of the company as at 31stMarch 2015;
(b) In the case of statement of Profit and Loss of the Loss for the year ending on 31stMarch 2015.
(c) In the case of the Cash Flow Statement of the Cash flow for the year ending on 31stMarch 2015
6. Emphasis of Matter
(a) We draw attention to note no. 26.14 of the financial statements regarding recallingof loans by the lending consortium of
bankers issue of notice under SARFASI ACT 2002 taking over symbolic possession ofImmovable properties and recovery proceedings launched with Debt Recovery Tribunal.
(b) We draw attention to note no. 3 of the financial statements regarding total deficitin the statement of profit and loss of Rs. 26244.17 Lacs (Previous year Rs. 25155.92Lacs) representing accumulated losses and complete erosion of net worth.
7. Report on Other legal and Regulatory requirements
(a) As required by Section 143 (3) of the Act we report that;
i. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
ii. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
iii. The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
iv. In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014 Except provision of leave encashment and gratuity made onmanagements estimate rather than on actuarial valuation basis in terms ofAccounting standard AS-15
v. On the basis of the written representations received from the Directors as on 31stMarch 2015 taken on record by the Board of Directors none of the Directors isdisqualified as on 31st March 2015 from being appointed as Director in termsof Section 164 (2) of the Act
(b) As required by the Companies (Auditor's Report) Order 2015 ("the Order")issued by the Central Government of India in terms of sub section (11) of Section 143 ofthe Act and on the basis of such checks of the books and records of the company as weconsidered appropriate and according to the information and explanations given to us wegive in the Annexure a statement on the matters specified in the paragraphs 3 and 4 of thesaid order.
For ARUN KISHORE & COMPANY
(ICAI FRN : 001898 N)
CA ARUN KISHORE
[Membership No. 10770]
Place : New Delhi
Date : 25th May 2015
Reg. NOESIS INDUSTRIES LIMITED YEAR ENDED 31.03.2015
Annexure referred to in the Independent Auditors report to the members of NoesisIndustries Ltd on the financial statements for the year ended 31st March 2015.
i. a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
b) Major items of fixed assets were physically verified during the year by themanagement in accordance with a regular program of verification which in our opinionprovides for physical verification of all the fixed assets at reasonable intervals. Nomaterial discrepancies were noticed on such verification.
ii. a) As explained to us inventories have been physically verified by the managementat reasonable intervals. In respect stocks lying with third party these have beenconfirmed by them.
b) In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the management werereasonable and adequate in relation to the size of the company and the nature of itsbusiness.
c) In our opinion and according to the information and explanations given to us thecompany has maintained proper records of its inventories. No material discrepancies werenoticed on verification between physical stocks and book records.
iii. The Company has not granted any loans during the year secured or unsecured tocompanies firms or other parties required to be covered in the register maintained underSection 189 of the Act. Therefore the provisions of clause 3(iii) (a) & (b) of theOrder are not applicable
iv. In our opinion and according to the information and explanations given to us thereare reasonably adequate internal controls systems commensurate with the size of thecompany and the nature of its business for the purchase of inventory and fixed assets andfor the sale of goods and services. During the course of our audit we have neither comeacross nor have been informed of any continuing failure to correct major weaknesses in theinternal control system.
v. The company has not accepted deposits during the year from the public within theprovisions of Section 73 of the Act and the Rules framed there under.
vi. We have broadly reviewed the books of accounts maintained by the company pursuantto rules made by the Central Government for the maintenance of cost records undersub-section (1) of Section 148 of the Act and are of the opinion that prima facie theprescribed accounts and records have been maintained and the required statement are in theprocess of compilation. We have not however made a detailed examination of the recordswith a view to determine whether they are accurate or complete.
vii. (a) According to the information and explanations given to us undisputed amountsin respect of aforesaid dues which were outstanding as at 31st March 2015 for a period ofmore than 6 months from the date they became payable are towards Tax deducted at Sourceof Rs.4.37 lacs Provident fund Rs. 1.47 lacs Sales tax Rs. 0.05 lacs.
(b) According to the information and explanations given to us following dues have notbeen admitted payable on account of disputes /appeals pending with appropriateauthorities:-
|Name of the statute ||Nature of the dues & Period ||Amount under dispute (Rs. in Lacs) ||Forum where dispute is pending |
|1. Delhi Sales Tax Act ||Sales Tax for 87-88 and 88-89 ||11.50 ||Delhi High Court |
|2. Income Tax ||Asstt. Year 2008-2009 ||30.46 ||ITAT New Delhi |
|3. Income Tax ||Asstt. Year 2009 -2010 ||79.31 ||ITAT New Delhi |
|4. Income Tax ||Asstt. Year 2010-2011 ||118.43 ||CIT (Appeals) New Delhi |
|5. Income Tax ||Asstt. Year 2011-2012 ||76.54 ||CIT (Appeals) New Delhi |
| ||Total ||316.24* || |
*The above figures are exclusive of interest if any payable thereon.
(c) Based on the information and explanations obtained the company has no liability orrequirement to transfer any amount to Investor Education & Protection Fund inaccordance with the relevant provisions of the Act and the Rules thereunder.
viii. The Company has an accumulated loss of Rs. 26244.17 lacs as at the end of thefinancial period and it has incurred cash loss of Rs. 169.62 Lacs in the current yearprevious year Rs. 27575.48 Lacs. Accumulated losses at the end of the financial year aremore than the companys net worth.
ix. According to the information and explanations given to us during the year theCompany has defaulted in re-payment of dues to financial institution and banks amountingto Rs. 21925.19 lacs as at 31.03.2015 default towards principal amount is Rs. 15950.00lacs and towards interest is Rs. 5975.19 lacs. The default started from the periodbeginning from January 2012 and continue till the date of our audit.
x. Based on our examination and according to the information and explanations given tous the Company has not granted loans and advances on the basis of security by way ofpledge of shares debentures and other securities
xi. Based on information and explanations given to us by the management term loanswere applied for the purpose for which the loans were obtained.
xii. Based on the audit procedure performed and the representation obtained from themanagement we report that no case of fraud on or by the company has been noticed orreported during the year under audit.
For ARUN KISHORE & COMPANY
(ICAI FRN : 001898 N)
CA ARUN KISHORE
[Membership No. 10770]
Place : New Delhi
Date : 25th May 2015