To the Members of Neycer India Limited
Report on the standalone Financial Statements
We have audited the standalone financial statements of Neycer India Limited ("theCompany") which comprise the balance sheet as at 31st March 2019 and the statementof Profit and Loss and statement of cash flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information (herein after referred to as "standalone financialstatements")
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2019 and its profit and its cash flows for the year endedon that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor s Responsibilities for the Audit of theStandalone Financial Statements section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were ofsignificance in our audit of the Financial Statements of the current period. These matterswere addressed in the context of ur audit of Financial Statements as a hole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.
|Key Audit Matters ||Response to Key Audit Matters and Conclusion |
|Going Concern || We have verified the fact of closure of the loan exposure and the settlement of the statutory dues. |
|Though the operations were stopped during the year for want of funds the Company has prepared the accounts on the basis of a going concern. Refer Note 33 of the Notes forming part of the Financial Statements. || |
| || We have tested the management s assumptions in regard to the steps being taken for restarting the operations. |
| || Though in our view there amy exist uncertainty in respect of the management s assumptions in the matter in our view the adoption of a going concern basis for the preparation may not be considered to be inappropriate and hence our opinion is not modified in respect of this issue. |
|As at 31st March 2019 the Company carried Inventories to the extent of Rs.57672737 /- which having regard to the value has been considered as a Key Audit Matter || We have verified and tested the design and the operating effectiveness of the controls with respect to the maintenance of inventories like the issue of materials determination of the quantum of stocks at the end of the year. |
| || We have verified and tested the preparation of the cost sheet for the valuation of inventories of finished goods and work in progress and the determination of the value of stores and spares. |
| || We have also tested the judgment and procedure adopted by the Company for the determination of obsolete and non-saleable stocks and determination of the the realisable value of the inventories. |
| || Based on the above procedures the determination of the value of inventories by the Management at the end of the year is considered reasonable. |
|Evaluation of demands raised by Commercial Tax Department and Employees State Insurance and Provident Fund authorities ||Our audit procedure included the following substantive procedures: |
|The Company is facing a number of demands under the Indirect Taxes Acts and ESI and PF Act. Please refer to Note No.27(d) to 27(i) of the Notes forming part of the Financial Statements || Obtained an understanding of the key issues involved and the potential exposures under the relevant Statutes. |
| || We read and analysed select correspondences and consultations carried out by the management with external experts. |
| || Discussed with appropriate senior management and evaluated the management s underlying assumptions and the grounds of appeal and other relevant documents. |
| || Understanding of the issues involved with reference to currently available precedents in the matter. |
| || Based on the procedure outlined above we agree with the management s view in regard to the probable outcome of the cases stated in the relevant notes to the Financial Statements. |
Responsibilities of the Management and Those Charged with Governance for StandaloneFinancial 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 standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting 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 controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statement that give a true and fair view andare free from material misstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany s ability to continue as a going concern disclosing as applicable mattersrelated to going concern disclosing as applicable matters related to going concern andusing the going concern basis of accounting unless management either intends to liquidatethe Company or to cease operations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company s financialreporting process.
Auditor s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor s report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these Standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain and audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management s use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertainlyexists related to events or conditions that may cast significant doubt on the Company sability to continue as a going concern. If we conclude that a material uncertainly existswe are required to draw attention in our auditor s report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of out auditor sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant deficiencies in internal controlthat we identify doing our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships to bear on our independence and where applicable related safeguards.
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 ofthe Companies Act 2013 we give in the Annexure a statement on the matters specified inparagraphs 3 and 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 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 Sheetthe Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report arein agreement with the books of account
d. In our opinion the aforesaid (Standalone) financial statements comply with theAccounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e. On the basis of written representations received from the directors as on March 312019 taken on record by the Board of Directors none of the Directors is disqualified ason March 31 2019 from being appointed as a Director in terms of Section 164 (2) of theAct.
3. 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".
4. 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:
a. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS Financial Statements. Please refer Note No.27(d) to27(j)
b. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
c. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
Dated: 30th May 2019
Annexure A to the Independent Auditors' Report
To the Members of Neycer India Limited
i) (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 during the yearand no material discrepancies were noticed on such verification. In our opinion theperiodicity of the verification is reasonable having regard to the size of the Company andthe nature of its assets.
(c) The title deeds of immovable properties are held in the name of the Company.
ii) The Management has conducted physical verification of inventories at reasonableintervals and no material discrepancies were noticed on such verification.
iii) 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 Companies Act 2013.
iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Companies Act2013 with respect to investments made by it.
v) The Company has not accepted deposits from the public.
vi) The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Companies Act 2013 for any of the activities of the Company.
vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the amounts deducted/accrued in the booksof accounts in respect of undisputed statutory dues including provident fund employeesstate insurance excise income tax sales tax value added tax duty of customs servicetax cess and other statutory dues have been deposited belatedly during the year by theCompany with appropriate authorities. According to the information and explanations givento us the following undisputed amounts payable in respect of provident fund employeesstate insurance income tax sales tax value added tax duty of customs excise servicetax cess and other statutory dues which were in arrears as on 31st March 2019for a period of more than six months from the date they became payable:
|Details ||Amount (Rs.) |
|Excise Duty ||9045685 |
|GST ||13015371 |
(b) There are no dues of income tax sales tax value added tax duty of customsexcise service tax cess or other statutory dues that have not been deposited on accountof any dispute except the following:
|Name of Statute ||Nature of Dues ||Amount Disputed ||Amount Paid ||Forum where the dispute is pending |
|Tamil Nadu General Sales tax Act ||Sales tax ||Rs.9320618 ||NIL ||Deputy Commercial tax Officer |
|Tamil Nadu General Sales tax Act ||Sales tax ||34415091 ||NIL ||Appellate Assistant Commissioner (CT) |
|CST Act ||CST ||5056861 ||NIL ||Appellate Asst. Commissioner (CT) |
|TN VAT Act ||VAT ||5793862 ||NIL ||Hon ble High Court of Madras |
|ESI Act ||ESI ||647330 ||161890 ||ESI Labour Cort |
|PF Act ||PF ||4722090 ||NIL ||Employees PF Appellate Tribunal Delhi |
viii) The Company has defaulted in the repayment of dues to banks financialinstitutions or debenture holders. However the default has been made good by making a onetime settlement with the Banks and other lenders.
ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments). As per the records of the Company the term loansavailed during the year were applied for the purposes for which those are raised.
x) As per the records of the Company and according to the information and explanationsgiven to us no frauds by the Company or on the company by its officers or employees havebeen noticed or reported during the year.
xi) According to the information and explanations given to us the Company has notpaid/provided any remuneration to its Managerial Personnel since their appointment iswithout any remuneration.
xii) The Company is not a Nidhi company.
xiii) In our opinion all transactions with related parties are in compliance withsection 177 and 188 of the Companies Act 2013 and the details have been disclosed in thefinancial statements as required by the applicable Accounting Standard.
xiv) According to the records of the Company the Company has not made any preferentialallotment or private placement of its shares or fully or partly convertible debenturesduring the year under review.
xv) Based on the audit procedures performed and the information and explanations givento us the Company has not entered into any non-cash transactions with the Directors orpersons connected with the Directors.
xvi) In our opinion the Company is not required to be registered under section 45IA ofthe Reserve Bank of India Act 1934.
Dated: 30th May 2019