The Members of
GAYATRI BIOORGANICS LIMITED
Report on the Financial Statements
We have audited the accompanying Ind AS Financial Statements of Gayatri BioOrganicsLimited ("the Company") which comprise the Balance Sheet as at March 31 2018the Statement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information. (herein referred toas "the Standalone Ind AS Financial Statements").
Management's responsibility for the Ind AS 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 Ind AS Financial Statements that give a true and fair view of the affairs (financialposition) profit or loss (financial performance including other comprehensive income)cash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)prescribed under section 133 of the Act.
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 judgements 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 Ind ASFinancial Statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these Ind AS Financial Statements basedon our audit.
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 there under. We conducted our audit of the Ind ASFinancial Statements in accordance with the Standards on Auditing specified under Section143(10) of the Act. Those Standards require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the Ind ASFinancial Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS Financial Statements. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of theInd AS 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 Ind AS Financial Statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the Ind AS Financial Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the Ind AS Financial Statements.
Basis for Qualified Opinion
Re: Note 2.20 Regarding Ind AS Financial Statements being prepared on a going concernbasis notwithstanding the accumulated losses amounting to Rs. 1842899953/- which haseroded the net-worth of the company for the reasons stated in the said note indicate theexistence of material uncertainty that may cast significant doubt about the company'sability to continue as a going concern.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effect of the matter described in the basis for qualifiedopinion paragraph the aforesaid Ind AS 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 March 31 2018 and its Loss and its cash flows and the changes in equity for theyear ended on that date.
Report on Other Legal and Regulatory Requirements
1. 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 the Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account.
(d) In our opinion the aforesaid Ind AS Financial Statements comply with theAccounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on March31 2018 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 from being appointed as a director in terms of Section 164 (2) of theAct.
(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 A". (g) With respect to the other matters to beincluded in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 in our opinion and to the best of our information and according tothe explanations given to us: i. The Company has disclosed the impact of all pendinglitigations on its financial position in its Ind AS Financial Statements; referNote 2.21 to the Ind AS Financial Statements. ii. The Company did not as at March 312018 have any material foreseeable losses relating to long-term contracts includingderivative contracts. iii. There are no amounts as at March 31 2018 which are requiredto be transferred to Investor Education and Protection Fund.
2. 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 B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
For M. Bhaskara Rao & Co.
Firm Registration No. 000459S
D Bapu Raghavendra
Membership No. 213274
Place : Hyderabad
Date : May 30 2018
Annexure A to the Independent Auditor's report
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 GayatriBioOrganics Limited ("the Company") as of March 31 2018 in conjunction with ouraudit of the Ind AS 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 FinancialReporting" issued by the Institute of Chartered Accountants of India (ICAI').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.
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 FinancialReporting" (the "Guidance Note") and the Standards on Auditing issued byICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls.
Because of the matter described in Disclaimer of Opinion paragraph below we were notable to obtain sufficient appropriate audit evidence to provide basis for an audit opinionon internal financial controls system over financial reporting of the Company.
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 andexpenditure of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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.
Disclaimer of Opinion
According to the information and explanation given to us the Company has notestablished its internal financial control over financial reporting on criteria based onor considering 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.
Because of this reason we are unable to obtain sufficient appropriate audit evidenceto provide a basis for our opinion whether the Company had adequate internal financialcontrols over financial reporting and whether such internal financial controls wereoperating effectively as at March 31 2018.
We have considered the disclaimer reported above in determining the nature timing andextent of audit tests applied in our audit of the March 31 2018 financial statements ofthe Company and the disclaimer does not affect our opinion on the financial statements ofthe Company.
For M. Bhaskara Rao & Co.
Firm Registration No. 000459S
D Bapu Raghavendra
Membership No. 213274
Place : Hyderabad
Date : May 30 2018
ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)
(i) In respect of its fixed assets:
(a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) According to the information and explanation given to us fixed assets have notbeen physically verified by its management during the year. Hence reporting ondiscrepancies during physical verification and its effect in the accounts is not made.
(c) According to the information and explanations furnished to us and on the basis ofour examination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
(ii) In respect of its inventory
(a) According to the information and explanations given to us the Management has notphysically verified the inventory during the year. Hence reporting on discrepancies duringphysical verification and its effect in the accounts is not made.
(iii) According to the information and explanations furnished to us the Company hasnot granted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered by clause (76) of section 2 of the Companies Act2013. Accordingly reporting under clauses (a) (b) and (c) of paragraph 3(iii) of theOrder does not arise.
(iv) According to the information and explanations furnished to us the Company has notgranted any loans nor made any investments or given any guarantees or securities duringthe year to any of the parties specified in the Sections 185 and 186 of the Companies Act2013.
(v) According to the information and explanations furnished to us the Company has notaccepted any deposits from the public. Hence reporting under the provisions of paragraph3(v) of the Order does not arise. (vi) We have broadly reviewed the cost recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014as amended and prescribed by the Central Government under sub section (1) of Section148 of the Companies Act 2013 and are of the opinion that prima facie the prescribedcost records have been made and maintained. We have however not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.
(vii) According to the information and explanations furnished to us in respect ofstatutory dues during the year under report: (a) on the basis of our examination of therecords of the Company amounts deducted/ accrued in the books of account in respect ofundisputed statutory dues including provident fund income-tax GST sales tax valueadded tax duty of customs service tax cess and other material statutory dues have notbeen regularly deposited during the year by the Company with the appropriate authoritiesand there have been delays in few cases.
According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax sales tax value added tax duty ofcustoms service tax cess and other material statutory dues were in arrears as at 31March 2018 for a period of more than six months from the date they became payable (b)According to the information and explanations given to us there are no material dues ofincome tax sales tax service tax GST and Value added tax which have not been depositedwith the appropriate authorities on account of any dispute. However according toinformation and explanations given to us the following dues of Customs duty and duty ofexcise have not been deposited by the Company on account of disputes:
|Name of the statute ||Nature of dues ||Amount (Rs) ||Period to which the amount relates ||Forum where dispute is pending |
|The Customs Act1962 ||Customs Duty ||3721553 ||Financial Year 1994-95 ||CESTAT-Bangalore |
|Central Excise Act1944 ||Excise duty including penalty ||85242349 ||02/2010 to 08/2014 ||CESTAT-Hyderabad |
|Value Added Tax Act and associated VAT ||VAT penalty ||6664610 ||For period 2011 to 2014 ||AP VAT-Hyderabad |
|Rules Central Excise and Service Tax ||Service Tax including interest and penalty ||2150793 ||For period July'2012 to March'2016 ||Kakinada Office Circle |
(viii) In our opinion and according to the information and explanations furnished tous the company has not defaulted in repayment of dues to working capital lenders.
(ix) According to the information furnished to us during the year under report thecompany did not have any moneys raised from Initial Public Offering or Further PublicOffering and from term loans that remained to be applied for the purposes for which theywere raised. Accordingly reporting pursuant to Clause 3(ix) of the Order is notapplicable.
(x) According to the information and explanations furnished to us no fraud by theCompany nor any fraud on the Company by any of its officers or its employees has beennoticed or reported during the year under report.
(xi) According to the information and explanations given to us and based on ourexamination of the records of the company the Company has during the year under reportpaid / provided for managerial remuneration in accordance with Section 197 read withSchedule V of the Companies Act 2013.
(xii) In our opinion reporting requirement under Paragraph 3(xii) of the order doesnot arise since according to the information and explanations furnished to us theCompany is not a Nidhi Company.
(xiii) According to the information and explanations furnished to us the Company is incompliance with Section 177 and 188 of the Companies Act 2013 where applicable for alltransactions with the related parties and the details of related party transactions havebeen disclosed in the Ind AS Financial Statements as required by the applicable IndianAccounting Standards.
(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures.
(xv) According to the information and explanations furnished to us during the yearthe Company has not entered into any agreements for acquisition of assets from or fortransferring its assets to its directors or the directors of its subsidiary companies orpersons connected with such directors for a consideration other than cash during theyear under report.
(xvi) In our opinion based on the information and explanations furnished to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934.
| ||For M. Bhaskara Rao & Co. |
| ||Chartered Accountants |
| ||Firm Registration No. 000459S |
| ||D Bapu Raghavendra |
| ||Partner |
|Place : Hyderabad ||Membership No. 213274 |
|Date : May 30 2018 || |