The Members of
Nath Bio-Genes (India) Limited Aurangabad
Report on the Audit of the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of Nath Bio-genes(I) Limited having CIN: L01110MH1993PLC072842 ("the Company") which comprisethe Balance Sheet as at 31st March 2019 the Statement of Profit and Loss(including other comprehensive income) Statement of Cash Flows and Statement of Changesin Equity for the year then ended and notes to financial statements including a summaryof significant accounting policies and other explanatory information.
2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the informationrequired by the Companies Act 2013 (the Act') in the manner so required and give atrue and fair view in conformity with Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and the other accounting principles generally accepted inIndia of the state of affairs of the Company as at 31st March 2019 and its profit(financial performance including other comprehensive income) the changes in equity andits cash flows for the year ended on that date.
Basis for Qualified Opinion
3. We conducted our audit in accordance with Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the rules there under and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our qualified opinion.
Key Audit Matters
4. 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 year.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. We have determined the matters described below to bethe key audit matters to be communicated in our report.
We have determined that there are no key audit matters to be communicated in ourreport.
Information other than the Standalone Financial Statements and Auditor's Report thereon
5. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the annual report but does not includethe financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is material misstatement of this other information; weare required to report that fact. We have nothing to report in this regard.
Management's Responsibility for the Standalone Financial Statements
6. The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance (includingother comprehensive income) changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the Ind AS specifiedunder section 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statement that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
7. 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 and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
8. The Board of Directors is also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
9. 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 withStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
10. As part of an audit in accordance with Standard on Auditing we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:a. Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.b. Obtain an understanding of internal financial controls relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany and its subsidiary companies which are companies incorporated in India hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls. c. Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management. d.Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the ability ofthe Company to continue as a going concern. If we conclude that a material uncertaintyexists we are required to draw attention in our auditor's report to the relateddisclosures in the standalone financial statements or if such disclosures are inadequateto modify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern. e. Evaluate the overall presentation structureand content of the standalone financial statements including the disclosures and whetherthe standalone financial statements represent the underlying transactions and events in amanner that achieves fair presentation.
11. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
12. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
13. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the standalone financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication
Report on Other Legal and Regulatory Requirements
14. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central
Government of India in terms of sub-section (11) of section 143 of the Companies Act2013 we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable. 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 Sheetthe Statement of Profit and Loss and the Cash Flow Statement dealt with by this Reportare in agreement with the books of account. (d) In our opinion the aforesaid standalonefinancial statements comply with the Ind AS specified under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2014. (e) On the basis of the writtenrepresentations received from the directors as on 31st March 2019 taken on record by theBoard of Directors none of the directors is disqualified as on 31st March 2019 frombeing appointed as a director in terms of Section 164 (2) of the Act. (f) With respect tothe adequacy of the internal financial controls over financial reporting of the Companyand the operating effectiveness of such controls refer to our separate Report in"Annexure B". (g) With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Act asamended : In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act.
(h) 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: i. TheCompany has disclosed the impact of pending litigations on its financial position in itsstandalone financial statements Refer Note 33 to the financial statements; ii. TheCompany did not have any long-term contracts including derivative contracts for whichthere were any material foreseeable losses. iii. There were no amounts which were requiredto be transferred to the Investor Education and Protection Fund by the Company. For AshokR Majethia Chartered Accountants FRN: 127769W
Ashok Majethia Proprietor M No: 124781
Place: Aurangabad Dated: 30.05.2019
ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT
The Annexure referred to in Independent Auditors' Report to the members of the NathBio-genes (I) Limited on the Ind AS financial statements for the year ended 31st March2019 we report that:
1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment.
(b) The company has regular program of physical verification of its Property Plant andEquipment by which Property Plant and Equipment are verified in a phased manner over aperiod of three years. In accordance with this program certain Property Plant andEquipment were verified during the year and no material discrepancies were noticed on suchverification. In our opinion this periodicity of physical verification is reasonablehaving regard to the size of the company and nature of its business.
(c) According to the information and explanations given to us and on the basis of ourexamination of the record of the company the title deeds of the immovable properties areheld in the name of the company; however registration of title deeds is still pending.
2. The inventory has been physically verified during the year by the management. Thediscrepancies noticed on verification between the physical stocks and book records werenot material which have been properly dealt with in the books of account.
3. a.) As per the information and explanations given to us the Company has grantednon-interest bearing unsecured loans to three companies covered in the register maintainedunder section 189 of the Act. The terms and conditions of the grant of such loans are notprejudicial to the interest of the company looking to long term businessexigencies/purposes except non-charging of interest.
b.) No formal schedule of repayment has been made for repayment of the principal amountand as such in absence of such schedule we are unable to comment if the same are beingrepaid timely.
c.) In absence of repayment schedule we are unable to comment if there are overdueamount for more than ninety days.
4. 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 Act with respect tothe loans except non-charging of interest. (Refer Note No. 46)
5. The Company has not accepted deposits within the meaning of sections 73 to 76 or anyother relevant provisions of the Act and the rules framed there under.
6. No maintenance of cost records has been specified by the Central Government undersection 148(1) of the Act for the products of the company.
7. (a) The company is regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income-tax sales-tax wealth tax servicetax duty of customs duty of excise value added tax cess and any other statutory dueswith the appropriate authorities. b) There are no dues of income tax or sales tax orwealth tax or service tax or duty of customs or duty of excise or value added tax or cesswhich have not been deposited on account of any dispute.
8. In our opinion and according to the information and explanations given to us theCompany has not defaulted in payment of dues to financial institution or bank or debentureholders.
9. The company has not raised any moneys by way of initial public offer or furtherpublic offer (including debt instruments) during the year. Further the term loans wereapplied for the purpose for which those are raised.
10. No fraud on or by the company or any fraud on the company by its officers oremployees has been noticed or reported during the year.
11. The managerial remuneration has been paid or provided in accordance with therequisite approvals mandated by the provisions of section 197 read with schedule V to theAct.
12. The company is not a Nidhi Company as such provisions of the clause (xii) are notapplicable to the company.
13. All transactions with the related parties are in compliance with section 177 and188 of the Act where applicable and the details have been disclosed in the Ind ASfinancial statements etc. as required by the applicable accounting standards.
14. According to the information and explanations given to us the Company has not madeany preferential allotment of equity shares.
15. The company has not entered into any non-cash transactions with directors orpersons connected with him.
16. The company is not required to be registered under section 45-IA of the ReserveBank of India Act
For Ashok R Majethia Chartered Accountants FRN: 127769W
Ashok Majethia Proprietor M No: 124781 Place: Aurangabad Date: 30.05.2019
ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT
Report on the Internal Financial Controls over financial reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
1. We have audited the internal financial controls over financial reporting of NathBio-genes (I) Limited ("the Company") as of 31st March 2019 inconjunction with our audit of the Ind AS financial statements of the Company for the yearended on that date.
Management's Responsibility for Internal Financial Controls
2. 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 the Company's policies the safeguarding of its assetsthe prevention 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.
3. 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") issued by the ICAI and the Standards on Auditingprescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls. 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.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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 Ind AS financial statements whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the Company's internal financial controlssystem over financial reporting of the company.
Meaning of Internal Financial Controls Over Financial Reporting
6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of Ind ASfinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the Ind ASfinancial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
7. 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.
8. In our opinion to the best of our information and according to the explanationsgiven to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31st March 2019 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the ICAI.
For Ashok R Majethia Chartered Accountants FRN: 127769W
Ashok Majethia Proprietor M No: 124781 Place: Aurangabad Date: 30.05.2019