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Transgene Biotek Ltd.

BSE: 526139 Sector: Health care
NSE: N.A. ISIN Code: INE773D01018
BSE 00:00 | 20 Mar 3.92 0.07
(1.82%)
OPEN

3.85

HIGH

3.92

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3.85

NSE 05:30 | 01 Jan Transgene Biotek Ltd
OPEN 3.85
PREVIOUS CLOSE 3.85
VOLUME 14203
52-Week high 6.08
52-Week low 1.81
P/E
Mkt Cap.(Rs cr) 30
Buy Price 3.90
Buy Qty 200.00
Sell Price 3.92
Sell Qty 3809.00
OPEN 3.85
CLOSE 3.85
VOLUME 14203
52-Week high 6.08
52-Week low 1.81
P/E
Mkt Cap.(Rs cr) 30
Buy Price 3.90
Buy Qty 200.00
Sell Price 3.92
Sell Qty 3809.00

Transgene Biotek Ltd. (TRANSGENEBIOTEK) - Auditors Report

Company auditors report

To

The Members

TRANSGENE BIOTEK LIMITED

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying Standalone Ind AS financial statements ofM/s.Transgene Biotek Limited ("The Company") which comprise the Balance Sheetas at 31st March 2018 the Statement of Profit and Loss including the Statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity forthe year ended and a summary of the significant accounting policies and other explanatoryinformation(herein after referred to as "standalone Ind AS financialstatements").

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 ofthese Standalone Ind AS Financial Statements that give a true and fair view of theFinancial Position Financial Performance including Other Comprehensive Income Cash Flowsand the Statement of Changes in Equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards(Ind AS)specified under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

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 in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the Standalone Ind AS Financial Statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the Standalone Ind AS Financial Statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances.

An audit also includes evaluating the appropriateness of the accounting policies usedand the reasonableness of the accounting estimates made by the Company's Directors aswell as evaluating the overall presentation of the Financial Statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone Financial Statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Ind AS Financial Statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thefinancial position of the Company as at 31 March 2018 and its financial performanceincluding other comprehensive income its cash flows and changes in equity for the yearended on that date.

Emphasis of Matter

1. Attention is brought to Note No.04 to the 'Notes forming part of the StandaloneFinancial Statements' under the heading "Investments" amounting to Rs.9220.10Lakhs made in the wholly owned subsidiary company viz. Transgene Biotek HK Limited(16952001 shares of US $ 1 each). The accounts of the said subsidiary have not beenaudited for the FY 2017-18. In the absence of alternative methodologies to independentlyevaluate the same we are unable to express an opinion whether the said sum as reflectedunder the above head is recoverable at the value at which it is stated. Management as aprudent measure made full provision in the books of account considering the abovedevelopment.

2. Attention is also brought to the fact that Securities and Exchange Board of India(SEBI) prima facie concluded on conducting Preliminary Enquiry during previous years thatthe GDR proceeds have been transferred by the Company directly or indirectly throughforeign subsidiary for undisclosed purposes under the grab of consideration for technologytransfer and consequently passed an interim Order inter alia refraining the Company fromissuing any securities. The Company has appealed against the said Order. We are unable tocomment at this stage on the impact this Order will have on the Company as a goingconcern. We are also unable to quantify at the stage the financial impact of this Orderon the Company as the Management has informed us that the Company is in the process oftaking steps for recovery of amounts raised in the GDR.

3. The findings of the SEBI as per their Order on the utilization/transfer of GDRproceeds for undisclosed purposes point out towards violations of the provisions of theForeign Exchange Management Act as well as GDR approval conditions the impact of which weare unable to quantify at this stage.

4. Attention is brought to the fact that there is an outstanding balance of Rs. 2302.00lakhs which pertains to advance given to a Party out of the proceeds of GDR. Consequent tothe order of the SEBI as aforesaid and the contention of the management that the paymentswere made without Company's authorization or knowledge we are unable to opine whetherthis amount is recoverable or not as we are unable to obtain confirmation from theconcerned Party. However the Management as a prudent measure made full provision for theamount in the Books of Accounts considering the above facts.

Report on Other Legal and Regulatory Requirements

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 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 Sheet Statement of Profit and Loss including Other ComprehensiveIncome the Cash Flow Statement and Statement of Changes in Equitydealt with by thisReport are in agreement with the books of account.

(d) In our opinion the aforesaid Standalone Ind AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with Companies(Indian Accounting Standards) Rules 2015 as amended;

(e) On the basis of Written Representation received from the directors as on 31st March2018 and taken on record by the Board of Directors we report that none of the directorsare disqualified as on 31st March 2018 from being appointed as a director in terms ofSub- section 2 of Section 164 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 "AnnexureB" to this report; and

(g) 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. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements.

ii. There is no requirement for any provision as required by any act or Accountingstandards for material for foreseeable losses if any on long term contracts includingderivative contracts.

iii. There are no amounts which are required to be transferred to Investor Educationand Protection Fund by the Company.

For Lakshmi and Associates
Chartered accountants
Firm Registration No. 012482S
N.LAKSHMI
PLACE : HYDERABAD Partner
DATE : 14.11.2018 M.No:223790

ANNEXURE - A TO THE AUDITORS' REPORT

Annexure referred to in paragraph 3 and 4 of the Independent Auditor's Report of evendate of TRANSGENE BIOTEK LIMITED Hyderabad on the Standalone Financial Statements foryear ended March 31 2018 :

1) In terms of the information and explanations sought by us and given by the companyand the books and records examined by us in the normal course of audit and to the best ofour knowledge and belief we state the following:

a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.In case of Technology item we havebeen informed that certain balancing components are yet to be received without which thetechnology is incomplete for the full effective intended usage. Subject to this the otherfixed assets have been physically verified by the management and this revealed no materialdiscrepancies.

b) All the assets have been physically verified by the management during the year andthere is a regular program of verification which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. No material discrepancieswere noticed on such verification.

c) According to information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds/lease deeds of immovableproperties included in Property Plant and Equipment are held in the name of the Company.

2) Inventory:

a) The inventory has been physically verified during the year by the management. In ouropinion the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the company and the nature of itsbusiness.

c) In our opinion and according to the information and explanations given to us thecompany is maintaining proper records of inventory. No material discrepancies were noticedon verification of the physical stocks with the records.

3) As informed to us the company has not granted any loans secured or unsecured tocompanies firms or other parties covered in the register maintained under section 189 ofthe Companies Act. Thus clause (iii) of Companies (Auditor's Report) Order 2016 is notapplicable.

4) As informed to us the Company has not granted any loans or made any investments orprovided any guarantees or security to the parties covered under section 185 and 186 ofthe Act. Therefore clause (iv) of Companies (Auditor's Report) Order 2016 is notapplicable.

5) According to the information and explanations given to us the Company has notaccepted deposits against the terms of directives issued by Reserve Bank of India and theprovisions of Sections 73 to 76 or any other relevant provisions of the Companies Act andthe rules framed there under. Hence clause (v) of Companies (Auditor's Report) Order 2018is not applicable.

6) The central government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the services rendered by the company. Thus clause(vi) of Companies (Auditor's Report) Order 2018 is not applicable

7) a) The company is not regular in depositing undisputed statutory dues. The amount ofarrears as at 31st March 2018 outstanding for a period of more than six months from thedate they became payable are as mentioned below:

Income tax (Asst year 2009-2010) Rs. 7.61 lakhs
Income Tax (Asst Year 2011-2012) Rs. 3.86 lakhs
Income tax in the nature of TDS Rs. 10.03 lakhs
PF Payable Rs. 0.65 lakhs
ESI Payable Rs. 1.92 lakhs
PT Payable Rs. 0.42 lakhs
Income Tax Demand (Asst year 2009-2010) Rs. 0.68 lakhs
Income Tax Demand (Asst year 2013-2014) Rs. 73.36 lakhs

b) According to the information and explanations given to us there are no dues ofsales tax income tax and excise duty which have not been deposited on account of anydispute except the following:

Nature of Dues Amount Period Forum where dispute is (Rs.) pending

Customs Duty demand raised for Non-fulfillment of Export

Obligation. 59.37 lakhs 2002 CESTAT Chennai

Service Tax liability due to difference of opinion on classification of service. 76.15lakhs 2011-12 Chief Commissioner of Customs Excise & Service Hyderabad.

Service Tax liability due to difference of opinion on classification of service 7.36lakhs 2010-11 Chief Commissioner of Customs Excise & Service Hyderabad.

8) The company does not have any outstanding dues to financial institutions banks ordebenture holders during the year. Thus clause (viii) of Companies (Auditor's Report)Order 2016 is not applicable.

9) The company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) and term loans during the year. Thus clause (ix) of theCompanies (Auditor's Report) Order 2016 is not applicable.

10) Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year

11) According to the information and explanations given to us the company has notprovided for any managerial remuneration as mandated under the provisions of Section 197read with Schedule V of the act.

12) As the company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of clause (xii) of the Companies (Auditor's Report) Order 2016 arenot applicable to the Company.

13) In our opinion and according to the information and explanations given to us thecompany has not entered into any transaction with the related parties. Thus clause (xiii)of Companies (Auditor's Report) Order 2016 is not applicable.

14) Based upon the audit procedures performed and the information and explanationsgiven by the management the Company has not made any preferential allotment or privateplacement of shares or fully convertible debentures during the year. Accordingly theclause (xiv) of Companies (Auditor's Report) Order 2016 is not applicable.

15) Based upon the audit procedures performed and the information and explanationsgiven by the management the Company has not entered into any non-cash transactions withdirectors or persons connected with him. Thus clause (xv) of Companies (Auditor's Report)Order 2018 is not applicable.

16) In our opinion the company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) ofthe Order are not applicable to the Company.

For Lakshmi and Associates
Chartered accountants
Firm Registration No. 012482S
N.LAKSHMI
PLACE : HYDERABAD Partner
DATE : 14.11.2018 M.No:223790

Annexure - B to the Auditors' 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 M/s.TRANSGENE BIOTEKLIMITED as on March 31 2018 in conjunction with our audit of theStandalone 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 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 company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors' Responsibility

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") and the Standards on Auditing as specified under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements andplan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe 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 judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the Company's assets that could have amaterial 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.

Opinion

In our opinion 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 2018 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.

For Lakshmi and Associates
Chartered accountants
Firm Registration No. 012482S
N.LAKSHMI
PLACE : HYDERABAD Partner
DATE : 14.11.2018 M.No:223790