Independent Auditor's Report
To the Members of
Neogem India Limited
Report on theFinancial Statements
We have audited the accompanying financial statements of Neogem India Limited("theCompany") which comprise the Balance Sheet as at March 31 2017 theStatement of Profit and Loss Cash Flow Statement for the year then ended and a summaryof significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act2013 ("theAct") 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 7of 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 the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to expressan opinion on these financial statements based on ouraudit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and th eRules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those 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 disclosure 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 control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances 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 over all 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
Without qualifying our opinion we draw attention to note 2.23 of the financialstatement relating to cash credit limit from Punjab National Bank and Bank of India whichhas been classified as "Non Performing Assets" by the lead banker as on31-03-2016. The company has not received balance confirmation from the bankers as on31-03-2017. Pending confirmation received the company has not provided for interestpayable in the financial statement till 31-03-2017 since the same is not quantifiable andaccordingly the loss for the year is understated to that extent.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2017 and its Loss and its Cash Flow for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")as amended issued by the Central Government of India interms of sub-section (11) ofsection 143 of the Act we give in the annexure "A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act we report that: a. we have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purpose of our audit;
b. in our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;
c. 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
d. 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) Rules2014.
e. In our opinion there are no observations or comments on the financial transactionswhich may have an adverse effect on the functioning of the Company subject to note no.2.23.
f. On the basis of written representations received from the directors as on March 312017 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2017 from being appointed as a director in terms of Section 164(2) of theAct.
g. Report on the Internal Financial Controls under Clause (1) of Sub-section 3 ofsection 143 of the companies Act 2013 ("the Act") is enclosed an annexure"B" to this report.
h. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i) The Company does not have any pending litigation as at March 31 2017 which wouldimpact its financial position.
ii) The Company did not have any long-term contracts including derivative contractshence the question of making a provision for any resulting material foreseeable lossesdoes not arise; and
iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For ASHOK BAIRAGRA & ASSOCIATES
Chartered Accountants Firm Reg. No. 118677W
Place : Mumbai Ashish Jalan Date : 30th May 2017 Partner (M.No. A 125707)
Annexure"A" to the Independent Auditors'Report
Referred to in paragraph 1 under the heading Report on Other Legal&Regulatory Requirement' of our reportof even date tothe financial statementsof theCompanyfor the year ended March 31 2017:
1) a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;
b. The Fixed Assets have been physically verified by the management in a phased mannerdesigned to cover all the itemswhich in our opinion is reasonable having regard to thesize of the company and nature of its business. Pursuant to the program aportion of thefixed asset has been physically verified by the management during the year and no materialdiscrepancies between the books records and the physical fixed assets have been noticed.
c. The title deeds of immovable properties are held in the name of the company. Thephysical verification of inventory have been conducted at reasonable intervals bymanagement during the year. The discrepancies noticed on physical verification ofinventory as compared to books records were not material.
3) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability partnerships or other parties covered in the Register maintained undersection 189 of the Act. Accordingly the provisions of clause3(iii) (a) to (c) of theOrder are not applicable to the Company and hence not commented upon.
4) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and I86 of the Companies Act2013; In respect of loans investments guarantees and security.
5) The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank
of India and the provisions of Sections 73 to 76 or any other relevant provisions ofthe Act and the Companies (Acceptance of Deposit) Rules 2015 with regard to the depositsaccepted from the public are not applicable.
6) As informed to us the maintenance of Cost Records has not been specified by theCentral Government under subsection (1) of Section 148 of the Act in respect of theactivities carried on by the company.
7) a. According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company has been generally regularin depositing undisputed statutory dues including Provident Fund Employees StateInsurance Income-Tax Sales tax Service Tax Duty of Customs Duty of Excise Valueadded Tax Cess and any other statutory dues with the appropriate authorities. Accordingto the information and explanations given to us no undisputed amounts payable in respectof the above were in arrears as at March 31 2017 for a period of more than six monthsfrom the date on when they become payable.
b. According to the information and explanation given to us there are no dues ofincome tax sale stax service tax duty of customs duty of excise value added taxoutstanding on account of any dispute.
8) Based on our audit procedure and according to the information and explanations givento us by the management the Company has defaulted in the repayment of dues to banks. Wedraw attention to note 2.23 of the financial statement relating to cash credit limit fromPunjab National Bank and Bank of India which has been classified as "Non Performing Assets" by the lead banker as on 31-03-2016. The company has not receivedbalance confirmation from the bankers as on 31-03-2017. Pending confirmation received thecompany has not provided for interest payable in the financial statement till 31-03-2017since the same is not quantifiable and accordingly the loss for the year is understated tothat extent.
9) Based upon the audit procedures performed and the information and explanations givenby the management the company has not raised moneys by way of initial public offer orfurther public offer including debt instruments and term Loans. Accordingly theprovisions of clause3 (ix) of the Order are not applicable to the Company and hence notcommented upon.
10) Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.
11) Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V tothe Companies Act;
12) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 4 (xii) of the Order are not applicable to the Company.
13) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.
14) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacementof shares or fully or partly convertible debentures during the year under review.Accordingly the provisions of clause 3(xiv) of the Order are not applicable to theCompany and hence not commented upon.
15) Based up on the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.
16) In our opinion the company is not required to be registered under section 45 I Aof the Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi)of the Order are not applicable to the Company and hence not commented upon.
| ||For ASHOK BAIRAGRA & ASSOCIATES |
| ||Chartered Accountants |
| ||Firm Reg. No. 118677W |
|Place : Mumbai ||Ashish Jalan |
|Date : 30th May 2017 ||Partner (M.No. A 125707) |
Annexure "B" to the Independent Auditor's report of even date on thefinancial statement of Neogem India Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of (theCompany') as of 31-Mar-2017 in conjunction with our audit of the financial statements ofthe Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls. These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company's internal financial controls system over financialreporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that;
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31-Mar-2017.
| ||For ASHOK BAIRAGRA & ASSOCIATES |
| ||Chartered Accountants |
| ||Firm Reg. No. 118677W |
|Place : Mumbai ||Ashish Jalan |
|Date : 30th May 2017 ||Partner (M.No. A 125707) |