Key Audit Matters Identified

1. Acquisition under Insolvency Resolution Process

The company proposed to acquire Oasis Ceramics Pvt. Ltd. pursuant to a Resolution Plan approved by NCLT under IBC 2016:

  • Total acquisition consideration: ₹32 crore
  • Payments made: ₹55 lakh as Earnest Money Deposit (EMD) and ₹2 crore towards consideration
  • Balance amount could not be remitted within stipulated timeline
  • Company filed application before NCLT seeking extension of time (pending as of reporting date)
  • Resolution Professional invoked bank guarantee amounting to ₹3.21 crore
  • Committee of Creditors initiated proceedings for non-compliance and considered liquidation
  • Management recognized amounts paid (₹2.55 crore) and bank guarantee invoked (₹3.21 crore) as exceptional loss totaling ₹5.76 crore

2. Utilization of Rights Issue Proceeds Deviation

The company raised funds through rights issue with stated objects:

  • Acquisition of Oasis Ceramics Pvt. Ltd. under IBC 2016
  • General corporate purposes
  • Meeting issue expenses

Actual utilization (₹ in '00):

  • Total raised: ₹39,98,760
  • Utilized for stated objects: ₹2,50,000 (6.25%)
  • Diverted to equity investments: ₹37,47,760 (93.75%)

Breakdown of deviation:

  • For Oasis acquisition objective (₹30,00,000 raised): Entire ₹30,00,000 diverted to equity investments
  • For general corporate purposes (₹9,62,760 raised): ₹7,61,260 utilized, balance diverted
  • For issue expenses (₹35,000 raised): ₹0 utilized, with excess utilization of ₹13.86 lakhs

The deviation was subsequently ratified by shareholders at Extra-Ordinary General Meeting held on January 22, 2026.

Financial and Operational Impact

  • Exceptional loss of ₹5.76 crore recognized due to failed acquisition
  • No change in audited standalone and consolidated financial results from originally submitted versions
  • Dividend declared and paid during the year in compliance with Section 123 of Companies Act, 2013

Auditor's Opinion

RSK&Co. LLP issued unqualified opinion stating:

  • Financial statements give true and fair view in conformity with Indian Accounting Standards
  • Proper books of account maintained as required by law
  • Financial statements comply with Accounting Standards under Section 133 of Companies Act
  • Adequate internal financial controls system in place and operating effectively

Additional Information

  • Company disposed of investment in joint venture Hemonc Pharma Private Limited on March 28, 2026
  • Initiated strike off process for subsidiary Microcure Biotech Private Limited
  • No pending litigations impacting financial position
  • No material foreseeable losses on long-term contracts
  • No amounts required to be transferred to Investor Education and Protection Fund

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