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INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF GUJARAT THEMIS BIOSYN LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of GUJARAT THEMIS BIOSYN LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss,the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies(Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design,implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance 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 the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the standalone financial statements.
Basis for Qualified Opinion
1. Financial Statements have been prepared on going concern basis in spite of Company has accumulated losses of Rs.10,37,05,584/–and negative net worth of Rs.78,53,651/– as at March 31, 2015. The Company also has working capital deficiency. The company is also a sick company within the meaning of Section 3 (1) (o) of the Sick Industrial Companies (Special Provisions) Act 1985 and the Company has been registered with the BIFR. Further the Rehabilitation Scheme had been sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) in the hearing held January 12, 2012. These factors raise doubts about, the Company's ability to continue as a going concern which is dependent upon infusion of long terms funds for its future operations. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of assets carrying amounts or the amount and classification of liabilities that might result, should the Company be unable to continue as a going concern. (Refer note no. 30). Consequential impact thereof on the financial statements is not ascertainable.
2. The outstanding balances as at March 31, 2015 in respect of certain balances, of trade receivables, deposits, loans & advances, liability for expenses, trade payables and creditors for capital expenditure are subject to confirmation from respective parties and consequential reconciliation and adjustment arising there from, if any(Refer note no. 29). Consequential impact thereof on the financial statements is not ascertainable.
In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above; consequential cumulative effect thereof is not ascertainable, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015, and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order"), issued by the Central Government of India in terms of sub–section (11) of section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. 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 best of 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 the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) On the basis of the written representations received from the directors as on March 31, 2015,taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.
f) The matter described in the Basis for Qualified Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.
g) With respect to the other matters to be included in 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 the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements –Refer Note 33 to the financial statements;
ii. According to the information & explanations given to us, the Company did not have any long–term contracts including derivative contracts for which there were any material foreseeable losses – Refer Note 34 to the financial statements;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company – Refer Note 35 to the financial statements.
ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT
Annexure referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of Independent Auditors' Report to the members of GUJARAT THEMIS BIOSYN LIMITED ("the Company") for the year ended March 31, 2015. We report that:
i) a) The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.
b) The Company has physically verified the fixed assets in accordance with a programme of verification which, in our opinion, provides for physical verification of all fixed assets at reasonable intervals. We have been informed that no material discrepancies were noticed on such verification;
ii) a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable;
b) According to the information and explanations given to us, the procedures followed for physical verification of the inventory are, in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business;
c) According to the records produced before us for our verification, there were no material discrepancies noticed on physical verification of stocks referred to in Para ii (a) above as compared to the book records and the same have been properly dealt with in the books of account of the Company;
iii) According to the information & explanations given to us,the Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of clause 3(iii) of Companies (Auditor's Report) Order, 2015 are not applicable to the Company.
iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and the nature of its business with regards to purchase of inventory and fixed assets and for the sale of goods and for rendering of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls system;
(v) The Company has not accepted any deposits during the year from the public within the meaning of the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules made thereunder.
(vi) We are informed that no cost records are required to be maintained by the Company under Section 148(1) of the Companies Act, 2013.
vii) a) Undisputed Statutory Dues including Gujarat Value Added Tax (GVAT), Tax Deducted at Source (TDS), Notified Area Tax, Drainage cess charges, Employees' State Insurance (ESIC), ESIC dues in respect of contractors, Service Tax, Duty of excise, Provident Fund have generally been regularly deposited with the appropriate authorities however delay have been observed in some cases. According to the information and explanations given to us, there were no undisputed statutory dues which have remained outstanding as at March 31, 2015 for the period of more than six months from the date they became payable.
According to the information and explanation given to us, there are no dues of sales tax, service tax, income tax, duty of excise, duty of customs, wealth tax, value added tax, excise duty and cess, which have not been deposited on account of any dispute, except the following:
c) According to the information and explanations given to us, there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder.
(viii) The accumulated losses of the company are more than fifty percent of its net worth. The company has, without considering the effect of the matter described in the Basis for Qualified Opinion paragraph, has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.
(ix) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution, bank or debenture holders except for delays in repayment of principal and payment of interest relating to Indian Rupee Term Loan and cash credit, the detail of which are given as under:
(x) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.
(xi) In our opinion, the term loans raised during the year have been applied for the purpose for which they were raised.
(xii) Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on the Company or by the Company has been noticed or reported during the course of our audit.
For KHANDELWAL JAIN & CO.
Firm Registration No. 105049W
Sd/– (NARENDRA JAIN)
Membership No. 048725
Date: May 28, 2015