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Neogen Chemicals Ltd.

BSE: 542665 Sector: Industrials
NSE: NEOGEN ISIN Code: INE136S01016
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OPEN 1201.10
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VOLUME 60
52-Week high 1795.00
52-Week low 1176.95
P/E 63.37
Mkt Cap.(Rs cr) 2,989
Buy Price 1197.10
Buy Qty 1.00
Sell Price 1199.65
Sell Qty 1.00
OPEN 1201.10
CLOSE 1196.40
VOLUME 60
52-Week high 1795.00
52-Week low 1176.95
P/E 63.37
Mkt Cap.(Rs cr) 2,989
Buy Price 1197.10
Buy Qty 1.00
Sell Price 1199.65
Sell Qty 1.00

Neogen Chemicals Ltd. (NEOGEN) - Auditors Report

Company auditors report

To

The Members of Neogen Chemicals Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of NEOGENCHEMICALS LIMITED ("the Company") which comprise the Balance Sheet as atMarch 312022 the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Changes in Equity and the Statement of Cash Flows for the year ended onthat date and a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as "standalone financial statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Financial Statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2022the profit and total comprehensive income changes in equity and its cash flows for theyear ended on that date.

Basis for Opinion

We conducted our audit ofthe Standalone Financial Statements inaccordance with the Standards on Auditing specified under section 143(10) of the Act(SAs). Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone Financial Statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Standalone Financial Statements of thecurrent period. These matters were addressed in the context of our audit of the StandaloneFinancial Statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

We have determined the matters described below to be the key auditmatters to be communicated in our report. We have fulfilled the responsibilities for theaudit of the Standalone Financial Statements section of our report including in relationto these matters. Accordingly our audit included the performance of procedures designedto respond to our assessment of the risks of material misstatement of the StandaloneFinancial Statements. The results of our audit procedures including the proceduresperformed to address the matters below provide the basis for our audit opinion on theaccompanying Standalone Financial Statements.

Sr. Key Audit Matter No. How our audit addressed the Key audit matter
1 Capitalization of property Plant and Equipment Our audit procedures included the following:
The Company has invested in significant capital project with capital expenditure of Rs. 170.06 Crores during the year ended March 31 2022 as detailed in note 4 out of which Rs. 166.99 Crores related to the Company's Dahej Unit Plant • Preformed test check of internal financial controls including IT controls over the approval acquisition Installation and Operation of Property Plant and Equipment
The significant level of capital expenditure requires consideration of the nature of costs incurred to ensure that capitalization of property plant and equipment meets the specific recognition criteria in Ind As 16 ‘Property Plant and Equipment' specifically in relation to assets constructed by the Company and application of the management's judgment in assigning appropriate useful life this are Noted as a key audit matter • Obtained a listing of new/sub projects initiated/ completed in the year and selected samples to verify underlying documentation that they had been reviewed and approved in line with the Company‘s authority.
• Our audit work included assessing the nature of property plant and equipment capitalized by the Company to test the validity of amounts capitalized and evaluating whether assets capitalized meet the recognition criteria set out in Ind as 16
• Performed tests of details by vouching specific expenditures to supporting documentation to validate additions during the year.
• The capitalization of assets in the year and the useful economic lives assigned were assessed to be appropriate based on the evidence obtained and as per schedule II
1I Revenue Recognition Our audit procedures included the following:
Ind AS 115 requires to consider management to account revenue as per terms of contracts with customers and on fulfillment of performance obligations • Understood the processes and controls around established in recognition of revenue.
Due to the Company's sales under various contractual terms and across the country delivery to customers in different regions might take different time periods and may result in undelivered goods at the period end. • Focusing on the Company's revenue recognition for compliance with Ind AS.
There is also a risk of revenue being overstated due to fraud resulting from pressure on the Company to achieve performance targets at the reporting period end. Accordingly fraud and cut-off risks in revenue recognition are considered as a key audit matter • The Company has manual and automated (information technology - IT) controls on recording revenue and accruals for sales returns and discounts. We have evaluated and tested design and operating effectiveness of controls addressing risk.
• Performed test check of sales transactions to verify contractual terms of invoices acknowledged delivery receipts and tested the transit time to deliver the goods.
• Performing testing on selected statistical samples of revenue transactions recorded during the year end.

Information Other than the Standalone Financial Statements andAuditor?s Report Thereon

The Company's management and Board of Directors are responsible for theother information. The other information comprises the information included in theManagement Discussion and Analysis Board's Report including Annexures to Board's ReportBusiness Responsibility Report Corporate Governance and Shareholder's Information butdoes not include the standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated. If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Management?s Responsibility for the Standalone FinancialStatements

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing 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.

In preparing the Standalone Financial Statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company'sfinancial reporting process.

Auditor?s Responsibilities for the Audit of the StandaloneFinancial Statements

Our objectives are to obtain reasonable assurance about whether theStandalone Financial Statements as a whole are free from material misstatement whetherdue 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the Standalone Financial Statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of theStandalone Financial Statements including the disclosures and whether the StandaloneFinancial Statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the StandaloneFinancial Statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the StandaloneFinancial Statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2020 (the‘Order') issued by the Central Government of India in terms of section 143 (11) ofthe Act we give in the ‘Annexure A' a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable

2. As required by Section 143(3) of the Act based on our audit wereport that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

c) The Standalone Balance Sheet the Statement of Profit and Lossincluding Other Comprehensive Income Statement of Changes in Equity and the Statement ofCash Flow dealt with by this Report are in agreement with the relevant books of account.

d) In our opinion the aforesaid standalone financial statements complywith the Ind AS specified under Section 133 of the Act

e) On the basis of the written representations received from thedirectors as on March 31 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2022 from being appointed as a director in termsof Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B". Our report expresses anunmodified opinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting.

3. With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements.

ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long- termcontracts including derivative contracts.

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

iv. (a) The Management has represented that to the

best of its knowledge and belief other than as disclosed in note tothe accounts no funds have been advanced or loaned or invested (either from borrowedfunds or share premium or any other sources or kind of funds) by the Company to or in anyother persons or entities including foreign entities ("Intermediaries") withthe understanding whether recorded in writing or otherwise that the Intermediary shalldirectly or indirectly lend or invest in other persons or entities identified in anymanner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company orprovide any guarantee security or the like on behalf of the Ultimate Beneficiaries

(b) The Management has represented that to the best of its knowledgeand belief as disclosed in note to the accounts no funds have been received by theCompany from any persons or entities including foreign entities ("FundingParties") with the understanding whether recorded in writing or otherwise that theCompany shall directly or indirectly lend or invest in other persons or entitiesidentified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalfof the Funding Parties or provide any guarantee security or the like on behalf of theUltimate Beneficiaries.

(c) Based on the audit procedures performed that have been consideredreasonable and appropriate in the circumstances nothing has come to our notice that hascaused us to believe that the representations under sub- clause (i) and (ii) of Rule 11(e)contain any material mis-statement.

v. The Final Dividend Paid by the company during the current year inrespect of the same declared for the previous year is in accordance with section 123 ofcompanies act 2013 to the extent it applies to payment of dividend. As stated in the noteto the financial statements the boards of directors of the company have proposed dividendfor the current year which is subject to the approval of the members at the ensuing annualgeneral meeting. The Dividend declared is in accordance with section 123 of the act to theextent it applies to declaration of dividend.

4. With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as amended:

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. The remuneration paidto any director is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) ofthe Act which are required to be commented upon by us.

Annexure ‘A? to the Independent Auditor?s Report

(Referred to in paragraph 1 under ‘Report on Other Legal andRegulatory Requirements? section of our report to the Members of NEOGEN CHEMICALSLimited of even date)

i. a) (A) The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant and Equipmentand relevant details of right-of- use-assets

(B) The Company has maintained proper records showing full particularsof intangible assets.

b) According to the information and explanations given to us and on thebasis of our examination of the records of the Company the Company has a regular programof physical verification of its property plant and equipment by which all property plantand equipment are verified in a phased manner over a period of three years. In accordancewith this program certain property plant and equipment were verified during the year. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets. No material discrepancies were noticedon such verification.

c) According to the information and explanations given to us the titledeeds of all the immovable properties (other than properties where the Company is thelessee and the lease agreements are duly executed in favor of the lessee) disclosed in thefinancial statements are held in the name of the company.

d) According to the information and explanations given to us theCompany has not revalued its Property Plant and Equipment (including Right of Use assets)or intangible assets or both during the year.

e) According to the information and explanations given to us there areno proceedings initiated or are pending against the company for holding any Benamiproperty under the "Benami Transactions (Prohibition) Act 1988 and Rules madethereunder.

ii. In respect of the Company's Inventories:

a) I n our opinion and according to the information and explanationsgiven to us physical verification of inventory has been conducted at reasonable intervalsby the management. The procedure of physical verification of inventory followed by themanagement is reasonable and adequate in relation to the size of the company and nature ofbusiness. The Company has maintained proper records of inventory. As per informationavailable the discrepancies noticed on verification between physical stock and bookrecords were not material in relation to the operation of the company and the same havebeen properly dealt with in the books of account.

b) According to the information and explanations given to us theCompany has been sanctioned working capital limits in excess of Rs. 5 Crores inaggregate at points of time during the year from banks on the basis of security ofcurrent assets. In our opinion and according to the information and explanations given tous the quarterly returns or statements comprising (stock statements book debtstatements statements on other Current Asset) filed by the Company with such banks orfinancial institutions are in agreement with the unaudited books of account of the Companyof the respective quarters and No material discrepancies have been observed

iii. According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has not providedany guarantee and security to companies firms limited liability partnerships or anyother parties during the year. but the Company has made investments in companies or anyother parties during the year. The Company has granted loans and advances in the nature ofloans during the year to Firm and other parties details of which are stated below. TheCompany has not provided guarantees or granted loans or advances in the nature of loansduring the year to Companies or limited liability partnerships.

(a) (A) Based on the audit procedures carried out by us and as per theinformation and explanations given to us the Company has granted loans to Joint Ventureas below:

Particulars Loans (Rs. In Crores)
Aggregate amount during the year 0.19
- Joint Venture
Balance outstanding as at the balance sheet date 0.60
- Joint Venture

(B) Based on the audit procedures carried out by us and as per theinformation and explanations given to us the Company has granted advances in the natureof loans and loans given to other parties as below:

Particulars Loans given to Employee
(Rs. In Crores)
Aggregate amount during the year 0.20
- Other parties
Balance Outstanding as at the Balance Sheet date - Other Parties 0.33

(b) According to the information and explanations given to us and basedon the audit procedures conducted by us in our opinion the guarantees provided during theyear and the terms and conditions of the grant of loans and advances in the nature ofloans during the year are prima facie not prejudicial to the interest of the Company.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company in our opinion in the case ofloans and advances in the nature of loans given the repayment of principal and payment ofinterest has been stipulated and the repayments or receipts have been regular.

(d) According to the information and explanations given to us and onthe basis of our examination of the records of the Company there is no overdue amount formore than ninety days in respect of loans and advances in the nature of loans given.

(e) According to the information and explanations given to us and onthe basis of our examination of the records of the Company there is no loan or advance inthe nature of loans granted falling due during the year which has been renewed orextended or fresh loans granted to settle the overdue of existing loans or advances in thenature of loans given to same parties.

(f) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has not grantedany loans or advances in the nature of loans either repayable on demand or withoutspecifying any terms or period of repayment.

(iv) In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Sections 185 and 186 of theAct in respect of grant of loans making investments and providing guarantees andsecurities as applicable.

(v) The Company has not accepted deposits during the year and does nothave any unclaimed deposits as at March 31 2022 and therefore the provisions of theclause 3 (v) of the Order are not applicable to the Company.

(vi) The maintenance of cost records has been specified by the CentralGovernment under section 148(1) of the Companies Act 2013 for the business activitiescarried out by the Company. As observed and information provided to us such accounts andrecords have been made and maintained by the Company. However we have not made a detailedexamination of the records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us inrespect of statutory dues:

(a) The Company has generally been regular in depositing undisputedstatutory dues including Provident Fund Employees' State Insurance Income Tax Goodsand Service Tax Customs Duty Cess and other material statutory dues applicable to itwith the appropriate authorities.

(b) There were no undisputed amounts payable in respect of ProvidentFund Employees' State Insurance Income Tax Goods and Service Tax Customs Duty Cessand other material statutory dues in arrears as at March 31 2022 for a period of morethan six months from the date they became payable.

(c) Details of dues of Income Tax Sales Tax Service Tax Excise Dutyand Value Added Tax which have not been deposited as at March 31 2022 on account ofdispute are given below:

Name of Statute Nature of Dues Period(s) to which the amount relates Amount Involved Forum where dispute is pending
Income Tax Act 1961 Income Tax A.Y. 2010-11 593860 Commissioner of Income Tax (Appeal)

(viii) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has notsurrendered or disclosed any transactions previously unrecorded as income in the books ofaccount in the tax assessments under the Income Tax Act 1961 as income during the year.

(ix) a) According to the information and explanations given to us andon the basis of our examination of the records of the Company the Company has notdefaulted in the repayment of loans or borrowings or in the payment of interest thereon toany lender.

b) According to the information and explanations given to us and on thebasis of our examination of the records of the Company the Company has not been declareda willful defaulter by any bank or financial institution or government or governmentauthority.

c) In our opinion and according to the information and explanationsgiven to us by the management term loans were applied for the purpose for which the loanswere obtained

d) According to the information and explanations given to us and on anoverall examination of the balance sheet of the Company we report that no funds raised onshort-term basis have been used for long-term purposes by the Company

e) According to the information and explanations given to us and on anoverall examination of the standalone financial statements of the Company we report thatthe Company has not taken any funds from any entity or person on account of or to meet theobligations of its Joint Venture as defined in the Act. The Company does not hold anyinvestment in any Subsidiaries or associate (as defined in the Act) during the year endedMarch 31 2022.

f) According to the information and explanations given to us andprocedures performed by us we report that the Company has not raised loans during theyear on the pledge of securities held in its Joint Venture (as defined under the Act).

x.(a) The Company has not raised any moneys by way of initial publicoffer or further public offer (including debt instruments) Accordingly clause 3(x)(a) ofthe Order is not applicable.

(b) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has madepreferential allotment of shares during the year. In our opinion the Company hascomplied with the provisions of Sections 42 and 62 of the Act and the funds raised by wayof preferential allotment of shares have been used for the purposes for which they wereraised

xi. (a) To the best of our knowledge and according to the informationand explanations given to us no fraud by the Company or no material fraud on the Companyby its officers or employees has been noticed or reported during the course of audit

(b) No report under sub-section (12) of section 143 of the CompaniesAct has been filed by the auditors during the year in Form ADT-4 as prescribed under rule13 of Companies (Audit and Auditors) Rules 2014 with the Central Government.

(c) According to the information and explanations given to us nowhistle blower complaints have been received by the Company during the year.

xii. The Company is not a Nidhi Company and hence reporting underclause 3 (xii) of the Order is not applicable to the Company.

xiii. In our opinion and according to the information and explanationsgiven to us the Company is in compliance with Section 177 and 188 of the Companies Act2013 where applicable for all transactions with the related parties and the details ofrelated party transactions have been disclosed in the standalone financial statements asrequired by the applicable accounting standards.

(xiv) (a) In our opinion and according to the information andexplanations given to us the Company has internal audit system commensurate with size andnature of its business.

(b) The reports of the internal auditors for the period under auditwere considered by us while framing our opinion on the financial statements of theCompany.

(xv) According to the information and explanations given to us theCompany has not entered into any non-cash transactions with directors or persons connectedwith them during the year. hence provision of section 192 of the act are not applicableto the company

(xvi) (a) The Company is not required to be registered under Section45-IA of the Reserve Bank of India Act 1934. Accordingly clauses 3(xvi)(a) and 3(xvi)(b) of the Order are not applicable.

(b) The Company is not a Core Investment Company (CIC) as defined inthe regulations made by the Reserve Bank of India. Accordingly clause 3(xvi)(c) of theOrder is not applicable.

(c) According to the information and explanations provided to us duringthe course of audit the Group does not have any CICs.

(xvii) The Company has not incurred cash losses in the current and inthe immediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors duringthe year. Accordingly clause 3(xviii) of the Order is not applicable.

(xix) According to the information and explanations given to us and onthe basis of the financial ratios ageing and expected dates of realization of financialassets and payment of financial liabilities other information accompanying the standalonefinancial statements our knowledge of the Board of Directors and management plans andbased on our examination of the evidence supporting the assumptions nothing has come toour attention which causes us to believe that any material uncertainty exists as on thedate of the audit report that the Company is not capable of meeting its liabilitiesexisting at the date of balance sheet as and when they fall due within a period of oneyear from the balance sheet date. We however state that this is not an assurance as tothe future viability of the Company. We further state that our reporting is based on thefacts up to the date of the audit report and we neither give any guarantee nor anyassurance that all liabilities falling due within a period of one year from the balancesheet date will get discharged by the Company as and when they fall due.

(xx) (a) There are no unspent amounts towards Corporate SocialResponsibility (CSR) other than ongoing projects requiring a transfer to a Fund specifiedin Schedule VII to the Companies Act in compliance with second proviso to sub-section (5)of Section 135 of the said Act. Accordingly reporting under clause 3(xx)(a) of the Orderis not applicable for the year.

(b) In respect of ongoing projects the Company has transferred unspentCorporate Social Responsibility (CSR) amount as at the end of the previous financial yearto a Special account within a period of 30 days from the end of the said financial year incompliance with the provision of section 135(6) of the Act.

Annexure ‘B? to the Independent Auditor?s Report

(Referred to in paragraph 2(f) under ‘Report on Other Legal andRegulatory Requirements' section of our report to the Members of NEOGEN CHEMICALS LIMITEDof even date)

Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financialreporting of NEOGEN CHEMICALS LIMITED ("the Company") as of March 312022 in conjunction with our audit of the Standalone Financial Statements of the Companyfor the year ended on that date.

Management?s Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishingand maintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design imple mentation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to respective 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.

Auditor?s Responsibility

Our responsibility is to express an opinion on the internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the internal financial controlssystem over financial reporting of the Company.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance e 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 financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us 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 March 31 2022 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 the Institute of CharteredAccountants of India.

UDIN : 22039910AIZSZB7116
For JMT & ASSOCIATES
Chartered Accountants
Firm's Registration No. 104167W
JAYESH SHAH
Place: Mumbai Partner
Date: May14 2022 (Membership No.039910)

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