TO THE MEMBERS OF NEOGEM INDIA LIMITED
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying Standalone Ind AS financial statementsof M/s Neogem India Limited (the company) which comprise the Balance Sheet asat 31st March 2018 and the Statement of Profit and Loss (including other comprehensiveincome) the Cash Flow Statement and the statement of Changes in Equity for the year thenended and a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone FinancialStatements
The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Companies Act 2013 (the Act) with respect tothe preparation and presentation of these Standalone Ind AS financial statements that givea true and fair view of the financial position profit or loss cash flow and changes inequity and of the Company in accordance with the accounting principles generally acceptedin India including the Indian Accounting Standards (Ind AS) prescribed under Section 133of the Act.
This responsibility also includes the maintenance of adequateaccounting records in accordance with the provision of the Act for safeguarding of theassets of the Company and for preventing and detecting the frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial control that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Standalone Ind AS financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these Standalone Ind ASfinancial statements based on our audit.
We have taken in to account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder.
We conducted our audit of Standalone Ind AS financial statement inaccordance with the Standards on Auditing specified under section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the Standalone Ind AS financialstatements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence aboutthe amounts and disclosures in the Standalone Ind AS financial statements. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the Standalone Ind AS financial statements whether due to fraudor error. In making those risk assessments the auditor considers internal financialcontrol relevant to the Company's preparation of the Standalone Ind AS financialstatements that give true and fair view in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made byCompany's Directors as well as evaluating the overall presentation of the StandaloneInd AS financial statements.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Standalone Ind AS financialstatements.
Without qualifying our opinion we draw attention to note 24 of thefinancial statement relating to cash credit limit from Punjab National Bank and Bank ofIndia for Rs. 10 crore and 5 crore respectively 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 31-03-2018. Pending confirmation received thecompany has not provided for interest payable in the financial statement till 31-03-2018since the same is not quantifiable and accordingly the loss for the year is understated tothat extent.
The company has stopped manufacturing activities since 01-01-2018 andno detailed plans are made available to us regarding commencement of business activity innear future. The company is in the process of restructuring/revival of its business inview of the management's expectation of the successful outcome of revival of itsbusiness the financial statement has been prepared on going concern basis. However in viewof the above uncertainty we are unable to comment on the ability of the company tocontinue as a going concern and the consequential adjustment to the accompanying financialstatement if any that might have been necessary had the financial statement been preparedunder liquidation basis.
We refer to the outstanding debtor's receivable as reflected incurrent assets of Rs. 411067159/- which are outstanding for more than three years. Theamount outstanding are unconfirmed by the parties.
We refer to the outstanding creditor's payable as reflected incurrent liabilities of Rs. 157116849/- which are outstanding for more than three years.The amount outstanding are unconfirmed by the parties.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Act in the manner so required and give a true and fair view inconformity
with the accounting principles generally accepted in India of thestate of affairs of the Company as at March31 2018 and its Loss and its Cash Flow for theyear ended on that date.
Report on other Legal and Regulatory Requirements
1. As required of the Companies (Auditor's Report) Order 2016(the Order) issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act we give in Annexure A a statement on thematters specified in paragraphs 3 and 4 of the order.
2. As required by section 143(3) of the Act we report that:
a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet and the Statement of Profit and Loss dealt with bythis Report are in agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e) In our opinion there are no observations or comments on thefinancial transactions which may have an adverse effect on the functioning of the Companysubject to note no. 24.
f) On the basis of written representations received from the directorsas on 31 March 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2018 from being appointed as a director in terms of Section164(2) of the Act.
g) In our opinion and to the best of our information and according tothe explanations given to us we report as such no other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014:
h) With respect of adequacy of the internal financial control overfinancial reporting of the company and the operating effectiveness of such controls referto our separate report in Annexure B and
i) Auditors Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules 2014: in our opinion and to the best of our information andaccording to the explanations given to us.
i) The Company does not have any pending litigations which would impactits financial position.
ii) The Company did not have any Long-term contracts includingderivatives contracts for which there were any material foreseeable losses.
iii) There is no amount required to be transferred to the InvestorEducation and Protection Fund by the company.
| ||For D S Solanki & Co |
| ||Chartered Accountants |
| ||Firm Reg. No. 124118W |
|Place : Mumbai ||Dharmendra S Solanki |
|Date : 30th May 2018 ||Partner (M.No. F 115223) |