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Advanced Enzyme Technologies Ltd.

BSE: 540025 Sector: Industrials
NSE: ADVENZYMES ISIN Code: INE837H01020
BSE LIVE 15:29 | 23 Oct 261.60 -3.95
(-1.49%)
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NSE 15:57 | 23 Oct 261.70 -3.80
(-1.43%)
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OPEN 263.00
PREVIOUS CLOSE 265.55
VOLUME 16620
52-Week high 475.40
52-Week low 245.00
P/E 83.58
Mkt Cap.(Rs cr) 2,921
Buy Price 261.10
Buy Qty 1.00
Sell Price 262.75
Sell Qty 50.00
OPEN 263.00
CLOSE 265.55
VOLUME 16620
52-Week high 475.40
52-Week low 245.00
P/E 83.58
Mkt Cap.(Rs cr) 2,921
Buy Price 261.10
Buy Qty 1.00
Sell Price 262.75
Sell Qty 50.00

Advanced Enzyme Technologies Ltd. (ADVENZYMES) - Auditors Report

Company auditors report

To the Members of

Advanced Enzyme Technologies Limited Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Advanced EnzymeTechnologies Limited ("the Company") which comprise the Balance Sheet as at 31March 2017 the Statement of Profit and Loss the Cash Flow Statement for the year endedon that date and a summary of the significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(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 the 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 read with Rule 7 of the Companies (Accounts)Rules 2014.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

While conducting the audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions 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 standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditors' judgment including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Board of Directors aswell as evaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Opinion

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 financial position of theCompany as at 31 March 2017 and its profits and cash flows for the year ended on thatdate.

Other Matter

The standalone financial statements of the Company for the year ended 31 March 2016have been audited by predecessor auditor who expressed an unmodified opinion on thosestandalone financial statements on 27 June 2016.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ('the Order') issued bythe Central Government of India in terms of sub-section (11) of Section 143 of the Act wegive in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

2. As required by Section 143 (3) of the Act we report to the extent applicablethat:

(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 aforesaid standalone financial statements comply with theAccounting Standards prescribed under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

(e) On the basis of the written representations received from the directors as on 31March 2017 taken on record by the Board of Directors none of the directors aredisqualified as on 31 March 2017 from being appointed as a director in terms of Section164 (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 Auditors' 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 has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer Note 21(a) to the standalonefinancial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31 March2017.

iv. The Company has provided requisite disclosures in its standalone financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8 November 2016 to 30 December 2016. Based on the audit procedures performed andrelying on management representations we report that the disclosures made by the Companyare in accordance with the books of account maintained by the Company - Refer Note 46 tothe standalone financial statements.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Sadashiv Shetty
Mumbai Partner
27 May 2017 Membership No: 048648

Annexure A to the Independent Auditors' Report - 31 March 2017

(Referred to in our report of even date)

i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation

of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets(property plant and equipment) by which all fixed assets (property plant and equipment)are verified in a phased manner over a period of three years. In our opinion thisperiodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets. In accordance with this programme certain fixedassets (property plant and equipment) were verified during the year. The discrepanciesnoticed on such verification were not material and have been appropriately dealt with inthe books of account.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties asdisclosed in Note 12 to the standalone financial statements are held in the name of theCompany except in respect of the lease for the Company's land at Jalna Maharashtra withMaharashtra Industrial Development Corporation (gross block: Rs 12.57 million and netblock Rs 12.57 million included under assets held for sale under note 20) for which theCompany is in the process of executing a formal lease deed.

ii. The inventory except goods-in-transit and stocks lying with third parties hasbeen physically verified by the management during the year. In our opinion the frequencyof such verification is reasonable. For stocks lying with third parties at the year-endwritten confirmations have been obtained. The discrepancies noticed on verificationbetween the physical stocks and the book records were not material.

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 ("the Act"). Accordingly paragraphs 3(iii) (a) (b) and (c) of the Order are not applicable to the Company

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of 186 of the Act with respect to unsecured loansgiven to a subsidiary and investments made in subsidiaries. The Company has not given anyloan under Section 185 of the Act. The Company has not given any guarantee or provided anysecurity under Sections 185 and 186 of the Act.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted deposits as per the directives issued by the Reserve Bank ofIndia under the provisions of Sections 73 to 76 or any other relevant provisions of theAct and the rules framed there under. Accordingly paragraph 3 (v) of the Order is notapplicable to the Company.

vi. We have broadly reviewed the books of account maintained by the Company pursuant tothe rules prescribed by the Central Government for maintenance of cost records underSection 148 (1) of the Act and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. However we have not made a detailedexamination of the records.

vii. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Employees' StateInsurance Income-tax Sales-tax Service tax Duty of Customs Duty of Excise Valueadded tax Cess and other material statutory dues have been generally regularly depositedduring the year by the Company with the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income-tax Sales-taxService tax Duty of Customs Duty of Excise Value added tax Cess and other materialstatutory dues were in arrears as at 31 March 2017 for a period of more than six monthsfrom the date they became payable.

(b)According to the information and explanations given to us there are no dues ofIncome-tax Sales-tax Service tax Duty of Customs Duty of Excise and Value added taxwhich have not been deposited with the appropriate authorities on account of any disputeother than those mentioned in the Appendix to this report.

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of dues to financial institutions or banks. TheCompany does not have any loans or borrowings from government or dues to debenture holdersduring the year.

ix. The Company has raised money by way of Initial Public Offering (IPO) during theyear. The total money raised aggregating to '499.99 million have been utilised for thepurpose for which it was received (refer note 5 to the standalone financial statements).In our opinion and according to the information and explanations given to us the termloans taken by the Company have been applied for the purpose for which they were raised.

x. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

xi. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3 (xii) of the Order is notapplicable to the Company.

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 Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3 (xiv) of the Order is not applicable to the Company.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3 (xv)of the Order is not applicable to the Company.

xvi. According to the information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.Accordingly paragraph 3 (xvi) of the Order is not applicable to the Company.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Sadashiv Shetty
Mumbai Partner
27 May 2017 Membership No: 048648

ADVANCED ENZYME TECHNOLOGIES LIMITED

Appendix as referred to in paragraph (vii)(b) of the Annexure A to the IndependentAuditors' Report - 31 March 2017

Name of the statute Nature of dues Amount ( Rs in million) Amount paid under protest (Rs in million) Period to which the amount relates Forum where the dispute is pending
Income Tax Act 1961 Income Tax 0.40 - AY 2004-05 Bombay High Court
Income Tax Act 1961 Income Tax 48.36 39.50 AY 2010-11 Income Tax Appellate Tribunal Mumbai
Income Tax Act 1961 Income Tax 57.38 8.57 AY 2011-12 Income Tax Appellate Tribunal Mumbai
Income Tax Act 1961 Income Tax 29.36 4.41 AY 2012-13 Commissioner Appeals
Income Tax Act 1961 Income Tax 0.18 - AY 2013-14 Commissioner Appeals
Central Excise Act 1944 read with Cenvat Credit Rules 2004 Service Tax Interest and Penalty 12.51 10.65 July 2010 to January 2015 Customs Excise and Service Tax Appellate Tribunal West Zone
Central Excise Act 1944 read with Cenvat Credit Rules 2004 Excise Duty Interest and Penalty 1.96 0.49 April 2012 to January 2015 Additional Commissioner of Central Excise Customs and Service Tax
Central Excise Act 1944 read with Cenvat Credit Rules 2004 Excise Duty 4.19 - July 2010 to January 2015 Additional Commissioner of Central Excise Customs and Service Tax
Central Excise Act 1944 read with Cenvat Credit Rules 2004 Excise Duty Interest and Penalty 2.79 2.79 July 2011 to January 2015 Commissioner of Central Excise Customs and Service Tax
Finance Act 1944 Service Tax 7.51 - June 2012 to March 2015 Commissioner of Central Excise Customs and Service Tax
Central Excise Act 1944 read with Cenvat Credit Rules 2004 Excise Duty Interest and Penalty 0.53 0.53 March 2015 to October 2015 Customs Excise and Service Tax Appellate Tribunal West Zone
Central Excise Act 1944 read with Cenvat Credit Rules 2004 Service Tax Interest and Penalty 1.37 1.06 March 2015 to December 2015 Customs Excise and Service Tax Appellate Tribunal West Zone
Central Excise Act 1944 read with Cenvat Credit Rules 2004 Excise Duty 0.60 - March 2015 to December 2015 Commissioner of Central Excise Customs and Service Tax

(AY = Assessment Year)

ADVANCED ENZYME TECHNOLOGIES LIMITED

Annexure B to the Independent Auditors' Report - 31 March 2017

(Referred to in our report of even date)

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 AdvancedEnzyme Technologies Limited ("the Company") as of 31 March 2017 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat 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 ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors' Responsibility

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 Act to the extent applicable to an auditof internal financial controls both applicable to an audit of Internal Financial Controlsand both issued by ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 judgement 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 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 authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

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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.

Opinion

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 March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by ICAI.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Sadashiv Shetty
Mumbai Partner
27 May 2017 Membership No: 048648