To the Members of Southern Online Bio Technologies Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Southern OnlineBio Technologies Limited ("the Company") which comprises the Balance Sheetas at March 31st 2017 the Statement of Profit and Loss and Cash FlowStatement for the year then ended and a summary of significant accounting policies andother explanatory information.
Management's Responsibility for the Standalone 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 andpresentation of these standalone financial statement that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with relevant rules issued there under. Thisresponsibility includes maintenance of adequate accounting records in accordance with theprovisions of the Act for safeguarding the assets of the Company and for preventing anddetecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent;design implementation and maintenance of adequate internal financial controls that areoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made there under. We conducted our audit inaccordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the standalone financial statements arefree from material misstatement. An audit involves performing procedures to obtain auditevidence about the amounts and disclosures in the standalone financial statement.
The procedures selected depend on the auditor's judgment including the assessment ofthe risks of material misstatement of the financial statement whether due to fraud orerror. In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone financial statements that give atrue and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone financialstatements. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone financialstatements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2017 its Loss and its cash flows for the year ended on thatdate.
Emphasis of Matter Paragraph:
The company incurred losses during the year and also in previous years. Onaccount of accumulated losses the paid-up capital and reserves of the company have beencompletely eroded. As a result there is negative networth as on 31st March2017.
The accounts of the company have been prepared on the basis of going concernassumption. However the eroded networth significantly affects the company's ability tocontinue as a going concern. Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure A a statement on the matters Specified in paragraphs 3and 4 of the Order.
2. As required by section 143(3) of the Act we further 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 purpose of our audit;
b. in our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;
c. the Balance Sheet Statement of Profit and Loss and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account;
d. in our opinion the aforesaid standalone financial statements comply with theapplicable Accounting Standards specified under Section 133 of the Act read with relevantrules issued there under.
e. On the basis of written representations received from the directors as on March 31st2017 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31st 2017 from being appointed as a director in terms of Section164(2) of the Act.
f. With respect to the adequacy of the internal financial controls over financialreporting of the company and the operating effectiveness of such controls refer to ourseparate report in Annexure B' and g. With respect to other matters to be includedin the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 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 as at 31st March2017 on its financial position in its standalone financial statements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses. iii. There is no amount which isrequired to be transferred to the Investor Education and Protection Fund by the companyduring the year ended 31st March 2017.
iv. The company has provided requisite disclosures in its financial statement as toholdings as well as dealings in Specified Bank Notes during the period 8th November2016 to 30th December 2016 and these are in accordance with the books ofaccounts maintained by the company. Refer Note No. 45 to the financial statement.
For P. Murali& Co.
Firm Registration No : 007257S
A Krishna Rao
Membership No. 020085
Annexure A to the Auditors Report
Annexure referred to in Independent Auditors Report to the Members of Southern OnlineBio Technologies Limited on the standalone financial statements for the year ended 31stMarch 2017 we report that:
i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. (b) As explained to us fixed assetshave been physically verified by the management at regular intervals; as informed to us nomaterial discrepancies were noticed on such verification. In our opinion the frequency ofverification is reasonable. (c) According to the information and explanations given to usand on the basis of our examination of records of the Company the title deeds ofimmovable properties are held in the name of the Company.
ii. The physical verification of inventory has been conducted at reasonable interval bythe management during the year. The was no discrepancies noticed on physical verificationof inventory as compared to book records and have been appropriately dealt with in thebooks of accounts.
iii. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013. Therefore the provisions of Clause 3(iii)(iii)(a) (iii)(b) and (iii)(c) of the said order are not applicable to the company.
iv. In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of sections 185 and 186 of the companies Act 2013in respect of loan and investment made and guarantees and securities provided by it.
v. The Company has not accepted any deposits from the public covered under Section 73to 76 of the Companies Act 2013 and rules framed there under to the extent notified.
vi. We have broadly reviewed the books of accounts maintained by company in respect ofproducts where pursuant to rules made by central government of India the maintenance ofcost records has been specified under sub section (1) of 148 of the Act and are ofopinion that prima facie the prescribed account and records made and maintained. We havenot however made a detailed examination of records with a view to determine whether theyare accurate and complete.
vii. According to the information and explanations given to us and based on the recordsof the company examined by us the company has not paid undisputed statutory dues ofProvident fund Employees state insurance income tax Tax deducted at source service tax as applicable with the appropriate authorities in India
viii. As per books and records of the company information and explanation given to usthe company has defaulted in repayment of dues to banks and the dues are considered asNon- Performing Assets by the lender banks as stated in note no.43 to the financialstatements.
ix. The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments).No term loans were raised by the Company duringthe year.
x. According to the information and explanations given to us no material fraud by thecompany or on the company by its officers or employees has been noticed or reported duringthe course of our Audit.
xi. The Company has paid/provided for managerial remuneration in accordance with therequisite approvals mandate by the provisions of section 197 read with schedule V to theAct.
xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the Provisions of clause 3(xii) of the order are not applicable to the company.xiii. The company has entered into transactions with related parties in compliance withthe provisions of sections 177 and 188 of the Act. The details of such related partiestransactions have been disclosed in the financial statements as required under AccountingStandard 18 and related parties disclosure specified under section 133 of the Act readwith relevant rules issued there under.
xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of clause 3(xiv) of the Order are not applicable to the Company.
xv. The Company has not entered into any non cash transactions with its directors orpersons connected with him. Accordingly the provisions of clause 3(xv) of the Order arenot applicable to the Company.
xvi. The Company is not required to be registered under section 45-IA of The ReserveBank of India Act 1934. Accordingly the provisions of clause 3(xvi) of the order are notapplicable to the Company.
For P. Murali& Co.
Firm Registration No 007257S
A Krishna Rao
Membership No. 020085