TO THE MEMBERS OF NEYCER INDIA LIMITED CHENNAI - 18
Report on the Financial Statements
We have audited the accompanying financial statements of Neycer India Limited(the Company) which comprise the Balance Sheet as at 31st March2017 the Statement of Profit and Loss the Cash Flow Statement for the year then endedand a summary of 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 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 the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
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 auditingstandards 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. 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 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 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.
An audit also includes evaluating the appropriateness of the accounting policies usedand the reasonableness of the accounting estimates made by the Company's Directors aswell as evaluating 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.
In our opinion and to the best of our information and according to the explanationsgiven to us subject to non-provision of interest on term loan cash credit and fundedinterest term loan from bank amounting to Rs. 7.66 crores and interest of Rs.4.46 croreson loan from Body corporate referred to in Note No.28 of notes to financial statementsresulting in the LOSS for the year understated by Rs.12.12 crores the aforesaid financialstatements give the information required by the Act in the manner so required and give atrue and fair view in conformity with the accounting principles generally accepted inIndia of the state of affairs of the company as at 31st March 2017 and its loss and itscash flows 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)issued by the Central Government of India in terms of sub-section 11 of section 143 of theAct we give in the Annexure A' statement on the matters specified in paragraph 3and 4 of the Order to the extent applicable.
2. As required by Section 143 (3) of the Act we report that:
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;
(b) In our opinion proper books of account as required by law have been kept by 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 financial statements comply with the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014;
(e) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in termsof Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in Annexure B'; and
(g) 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 2U14 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in the financial statements- Refer Note 24 and Note 25(d) to 25(i) to thefinancial statements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year.
iv. The Company has provided requisite disclosures in its financial statements in NoteNo. 38 as to holdings as well as dealings in Specified Bank Notes during the period from 8t!lNovember 2016 to 30th December 2016 and these are in accordance with thebooks of accounts maintained by the Company.
For Suri & Co. Chartered Accountants Firm Regn. No. 004283S
Place : Chennai Date : 30-05-2017
R. Mahesh Partner M.No.024775
ANNEXURE-A TO THE INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF
NEYCER INDIA LIMITED
i) a) The Company is maintaining proper records showing full particulars including
quantitative details and situation of fixed assets.
b) These fixed assets have been physically verified by the management at reasonableintervals and no material discrepancies were noticed on such verification.
c) The title deeds of immovable properties are held in the name of the Company.
ii) Physical verification of inventory has been conducted at reasonable intervals bythe management and no material discrepancies were noticed.
iii) The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Companies Act2013.
iv) The Company has not given any loans or made any investments given any guaranteesor provided any securities and accordingly compliance with the provisions of Section 185and 186 of the Companies Act 2013 does not arise.
v) The Company has not accepted any deposits from the public during the year within themeaning of Sections 73 to 76 or any other relevant provisions of the Companies Act2013and the rules framed thereunder. As per information furnished the Company has notreceived any order from the Company Law Board or National Company Law Tribunal or ReserveBank of India or any court or any other Tribunal.
vi) We have broadly reviewed the cost records maintained by the Company in respect ofproducts where the Central Government has prescribed maintenance of cost records under subsection (1) of section 148 of the Companies Act 2013 and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have howevernot made a detailed examination of the records with a view to determine whether they areaccurate or complete
vii) a) The Company is depositing undisputed statutory dues including provident fundemployees' state insurance income tax sales-tax service tax duty of customs duty ofexcise value added tax cess and other statutory dues with the appropriate authoritiesbelatedly and there are no outstanding statutory dues as at the last day of the financialyear concerned for a period of more than six months from the date they became payable.
b) According to the information and explanations furnished to us the details ofdisputed statutory dues are as under:
|Name of the Statute ||Nature of dues ||Amount disputed (Rs.) ||Amount Paid (Rs.) ||Forum where dispute is pending |
|Tamil Nadu General Sales Tax Act ||Sales Tax ||9320618 ||Nil ||Deputy Commercial Tax Officer |
|TNGST Act ||Sales Tax ||34415091 ||NIL ||Appellate Assistant Commissioner(CT) |
|CST Act ||CST ||5056861 ||Nil ||Appellate Assistant Commissioner (CT) |
|TN VAT ||VAT ||5793862 ||Nil ||Honorable High Court of Madras |
|ESI Act ||ESI ||647330 ||161890 ||ESI Labour Court |
|PF Act ||PF ||4722090 ||Nil ||Employees Provident Fund Appellate Tribunal Delhi |
viii) in our opinion and according to the information and explanations given to us thecompany has defaulted in repayment of dues to banks. The default in respect of principalamount of loan was Rs71117000 and that of interest was Rs.70170253 as detailed inNote No4 and Note No.2S of the notes to the financial statements. The company has nooutstanding debentures.
ix) The Company has not raised any monies by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year.
x) According to the information and explanations given to us no fraud by the companyor on the company by its officers or employees has been noticed or reported during theyear.
xi) The appointment of managerial personnel is without any remuneration and hence theCompany has not paid or provided for any managerial remuneration during the year.
xii) The Company is not a Nidhi company and hence paragraph 3(xii) of the Order is notapplicable.
xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Companies Act 2013 where applicable anddetails have been disclosed in the Financial Statements as required by the applicableAccounting Standards.
xiv) The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year.
xv) The Company has not entered into any non-cash transactions with directors orpersons connected with him.
xvi) The Company is not required to be registered under 45-IA of the Reserve Bank ofIndia Act 1934.
For Suri & Co. Chartered Accountants Firm Registration No. 004283S
Place : Chennai Date : 30-05-2017
R.Mahesh Partner M. No.024775
ANNEXURE-B TO THE INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF
NEYCER 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 NeycerIndia Limited (the Company) as of 31st March 2017 in conjunctionwith our audit of the Financial Statements of the 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 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe 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 the institute ofChartered Accountants of India and deemed to be prescribed under section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and both issued by theInstitute of Chartered Accountants of India. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting were established and maintained and if such controls operated effectively in allmaterial respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the Financial Statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of Financial Statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material 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 31st March2017based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
For Suri 6t Co. Chartered Accountants Firm Registration No. 004283S
Place: Chennai Date : 30-05-2017