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Advanced Enzyme Technologies Ltd.

BSE: 540025 Sector: Industrials
NSE: ADVENZYMES ISIN Code: INE837H01020
BSE 00:00 | 19 May 284.95 2.75
(0.97%)
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267.20

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290.65

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267.20

NSE 00:00 | 19 May 285.40 3.25
(1.15%)
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278.70

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290.95

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OPEN 267.20
PREVIOUS CLOSE 282.20
VOLUME 14910
52-Week high 503.00
52-Week low 257.00
P/E 57.45
Mkt Cap.(Rs cr) 3,186
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 267.20
CLOSE 282.20
VOLUME 14910
52-Week high 503.00
52-Week low 257.00
P/E 57.45
Mkt Cap.(Rs cr) 3,186
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Advanced Enzyme Technologies Ltd. (ADVENZYMES) - Auditors Report

Company auditors report

To the Members of

Advanced Enzyme Technologies Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Advanced Enzyme TechnologiesLimited ("the Company") which comprise the standalone balance sheet as at 31March 2020 and the standalone statement of profit and loss (including other comprehensiveincome) standalone statement of changes in equity and standalone statement of cash flowsfor the year then ended and notes to the standalone financial statements including asummary of the significant accounting policies and other explanatory information.

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 Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2020 and profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion on the Standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

Description of Key Audit Matter Revenue Recognition

The key audit matter How the matter was addressed in our audit
Revenue is recognized when the control of the products being sold has been transferred to the customer. We have identified recognition of revenue as a key audit matter as revenue is a key performance indicator. Also there is a presumed fraud risk of revenue being overstated/ understated through manipulation on the timing of transfer of control arising from pressure to achieve performance targets and meeting external expectations. Our principal audit procedures included:
• Assessing the compliance of the revenue recognition accounting policies by comparing with Ind AS 115 "Revenue from Contracts with Customers".
• Testing the design implementation and operating effectiveness of the Company's general Information Technology (IT) controls by involving our IT specialists.
• Testing the design implementation and operating effectiveness of key IT application/manual controls over the Company's systems for revenue recognition by involving our IT specialists.
The key audit matter How the matter was addressed in our audit
• Performing substantive testing (including year-end cut-off testing) by selecting statistical samples of revenue transactions recorded during the year (and before and after the financial year end).
• Verifying the underlying documents which included sales invoices/contracts and shipping documents for the selected transactions.
• Assessing manual journals posted to revenue to identify unusual items.
• Considering the adequacy of the Company's disclosures in respect of revenue.
Other Information
The Company's management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company's annual report but does not include the financial statements and our Auditors report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring accuracy and completeness of the accounting records relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement whether due to fraud or error.
In connection with our audit of the standalone financial statements our responsibility is to read the other information and in doing so consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If based on the work we have performed we conclude that there is a material misstatement of this other information we are required to report that fact. We have nothing to report in this regard. In preparing the standalone financial statements the Management and Board of Directors are responsible for assessing the Company's ability to continue as a going concern disclosing as applicable matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.
Management's and Board of Directors' Responsibility for the Standalone Financial Statements The Board of Directors is also responsible for overseeing the Company's financial reporting process.
The Company's Management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs profit/loss and other comprehensive income changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act. Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement whether due to fraud or error and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if individually or in the aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis 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 standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain 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 Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the standalone financial statementsmade by the Management and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Directors use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion.

Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during 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 and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our Auditors report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

2. (A) 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 standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31March 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2020 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 with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(B) 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 as at 31 March 2020 onits financial position in its standalone financial statements - Refer Note 53 to thestandalone financial 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; and

iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these financial statements since they do not pertain to thefinancial year ended 31 March 2020.

(C) With respect to the matter to be included in the Auditors Report under section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Sadashiv Shetty
Mumbai Partner
30 May 2020 Membership No: 048648
UDIN: 20048648AAAAAS5800

Annexure A to the Independent Auditors Report - 31 March 2020

With reference to the Annexure A referred to in the Independent Auditors Report to themembers of the Company on the standalone financial statements for the year ended 31 March2020 we report the following:

(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 fiixed assetsby which the fixed assets are verified by the management according to a phased programmedesigned to cover all the items 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 the programme the Company hasphysically verified certain fixed assets during the year. The discrepancies noticed onsuch verification were not material and have been appropriately dealt with in the books ofaccount.

(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 5 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 Non-current assets held for sale under note 18 tothe standalone financial statements).

(ii) The inventory except for goods in transit has been physically verified by themanagement during the year. In our opinion the frequency of such verification isreasonable. The discrepancies noticed on verification between the physical stocks and thebook records were not material and have been adequately dealt with in books of account.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under Section 189 of theCompanies Act 2013 ('the Act'). Accordingly paragraphs 3 (iii) (a) and (b) of the Orderare not applicable to the Company.

(iv) In our opinion and according to the information and explanation given to us theCompany has complied with provisions of Section 185 and 186 of the Act in respect of grantof loans making investments and providing guarantees and securities as applicable.

(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 and the provisions of Sections 73 to 76 or any other relevant provisions of the Actand the rules framed thereunder. 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 pursuantto the 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 with a view to determine whether they are accurate or complete.

(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 EmployeesRs.State Insurance Profession tax Income-tax Goods and Service tax Duty of Customs cessand other material statutory dues have been generally regularly deposited during the yearby the Company with the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund EmployeesRs. State Insurance Profession taxIncome-tax Goods and Services tax Duty of Customs cess and other material statutorydues were in arrears as at 31 March 2020 for a period of more than six months from thedate they became payable.

(b) According to the information and explanations given to us and based on ourexamination of the records of the Company there are no dues of Income-tax Sales taxService tax Duty of Customs Duty of Excise and Value added tax as at 31 March 2020 whichhave not been deposited with the appropriate authorities on account of any dispute exceptas stated below:

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 9.26 9.26 AY 2010-11 Income Tax Appellate Tribunal Mumbai
Income Tax Act 1961 Income Tax 0.18 - AY 2013-14 Commissioner Appeals
Income Tax Act 1961 Income Tax 24.37 4.87 AY 2012-13 Commissioner Appeals
Central Excise Act 1944 read with Cenvat Credit Rules 2004 Service Tax Interest and Penalty 12.51 10.38 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 2.84 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
Central Excise Act 1944 read with Cenvat Credit Rules 2004 Excise Duty Interest and Penalty 0.53 0.53 March 15 to October 15 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
Central Excise Act 1944 read with Cenvat Credit Rules 2004 Excise Duty 2.11 January 2016 to June 2017 Commissioner of GST Central Excise Customs and Service Tax

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans or borrowings to banks and government.The Company does not have any loans or borrowings from financial institutions or dues todebenture holders during the year.

(ix) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not raised any moneys by way ofinitial public offer or further public offer (including debt instruments) and has notobtained any term loans during the year. Accordingly paragraph 3(ix) of the Order is notapplicable to the Company.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

(xi) In our opinion and according to the information and explanations given to us themanagerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of Section 197 of the Act read with Schedule V to theAct.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company and the Nidhi Rules 2014 are not applicable to it.Accordingly paragraph 3(xii) of the Order is not applicable to the Company.

(xiii) In our opinion and according to the information and explanations given to usthe Company has entered into transactions with related parties in compliance with theprovisions of Sections 177 and 188 of the Act where applicable and the details of suchrelated party transactions have been disclosed in the standalone financial statements asrequired by the applicable Indian Accounting Standards.

(xiv) According to the information and explanations given 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 give 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) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 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
30 May 2020 Membership No: 048648
UDIN: 20048648AAAAAS5800

Annexure B to the Independent Auditors Report on the standalone financialstatements of Advanced Enzyme Technologies Limited for the year ended 31 March 2020

Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013

(Referred to in paragraph 2(A)(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference to financial statementsof Advanced Enzyme Technologies Limited ("the Company") as of 31 March 2020 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to standalone financial statements and such internal financialcontrols were operating effectively as at 31 March 2020 based on the internal financialcontrols with reference to standalone financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to standalone financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013 (hereinafterreferred to as "the Act").

Auditors Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to standalone financial statements. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to standalone financial statements were established andmaintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to standalone financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tostandalone financial statements included obtaining an understanding of such internalfinancial controls assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the standalone financial statementswhether 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 withreference to standalone financial statements.

Meaning of Internal Financial controls with Reference to Financial Statements

A company's internal financial controls with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to standalone financial statements include thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the financial statements.

Inherent Limitations of Internal Financial controls with Reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial controls with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Sadashiv Shetty
Mumbai Partner
30 May 2020 Membership No: 048648
UDIN: 20048648AAAAAS5800

   

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