To,
The Members,
R ] Bio-Tech Limited,
"Siddharth Arcade", Opp. Holiday Camp, Station Road,
Aurangabad - 431 005
We have audited the accompanying standalone financial statements of R J Bio-Tech
Limited (‘the Company’), which comprise the Balance Sheet as at 31st March 2021,
the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and
notes to the financial statements, including a summary of significant accounting policies
and other explanatory information (hereinafter referred to as financial statements).
01] Qualified Opinion
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 section of our report, the aforesaid financial statements give the information
required by the Companies Act, 2013, as amended (‘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 31st March 2021,
its Profit & Loss, its Cash Flows for the year ended on that date.
02] Basis for Qualified Opinion
i) Following events or conditions indicate that a material uncertainty exists that may
cast significant doubt on the Company’s ability to continue as a going concern and
therefore, it may be unable to realise its assets and discharge its liabilities in the
normal course of business. The financial statements (and notes thereto) do not disclose
this fact. However, the financial statements of the Company have been prepared on a going
concern basis.
We draw attention to the standalone financial statements, which indicates that -
- The Company has incurred a net loss of Rs. 15.68 Crores during the year ended 31st
March, 2021 and also its current liabilities over current assets exceeded by Rs. 39.07
Crores.
- The Company has accumulated losses and its Net Worth has been fully eroded.
- The Company’s financing arrangements expired and the amount outstanding of Rs.
36.17 Crores was payable on March 31, 2021. The Company has been unable to renegotiate or
obtain replacement financing and the loan to the company is currently classified by bank
as Non Performing Asset. The bank has recently declared the company as a willful defaulter
and hence further alternate financing from the banking system seems to be difficult.
i
ii) Under the Micro, Small & Medium Enterprises Development Act, 2006 which came
into force from 2nd October, 2006, certain disclosures are required to be made relating to
Micro, Small & Medium Enterprises. No such disclosures are made in financials
statements, in the absence of relevent information with the company which is not in
compliance with the requirements of Schedule III of the Companies Act, 2013.
iii) The company has not determined the liability towards retirement benefits, such as
leave encashment, etc. as per the Accounting Standard 15 - "Employee Benefits
prescribed under section 133 of the Companies Act, 2013. No provision has been made in the
books of accounts for the above liability as per the acturial valuation report. The
financial statement do not disclose the financial impact of the above provisions. The Loss
in the statement of Profit & Loss and Current Liabilities are understated to that
extent. This constitutes* a departure from the Accounting Standard -15 "Employee
Benefits".
iv) The company has not accounted for interest on loans taken from banks during the
year. This is not in compliance with the accounting policies followed by the company till
last financial year, where in interest accrued on loans was accounted for in the books.
As a result of the matters stated in Para (i), Para (il) Para (iii) & Para (iv)
above, we were unable to determine whether any adjustments might have been found necessary
in respect of recorded assets and liabilities in the Balance Sheet and the coi responding
elements making up the Statement of Profit and Loss and Cash Flow Statement.
We have conducted our audit in accordance with the Standards on Auditing (SAs)
specified under section 143(10) of the companies Act, 2013. Our responsibilities under
those Standards are further described in Auditors Responsibilities for Audit of Financial
Statements section of our report. We are independent of the Company in accordance with the
code of Ethics issued by the Institute of Chartered Accountants of India together with the
ethical requirements that are relevant to our audit of the financial statements under the
provisions of the Companies Act, 2013 and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the ICAls Code of Ethics, We
believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our Qualified opinion.
03] Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial statements of the current period. These matters
were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion theron, and we do not provide a seprate opinion an these matters.
These matters has been addressed in the Basis for Qualified Opinion paragraph of our Audit
Report.
05] Management’s Responsibility for the Financial Statements
The Companys 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 of
these standalone financial statements that give a true and fair view of the financial
position, financial performance, (changes in equity] 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. This responsibility also
includes maintenance of adequate accounting records in accordance with the provisions of
the Act for safeguarding of the assets of the Company and for preventing and detecting
frauds and other irregularities; selection and application of appropriate implementation
and maintenance of 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
statement that give a true and fair view and are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, management is responsible for assessing the
Companys ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless management
either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
The Board of Directors are also responsible for overseeing the company’s financial
reporting process.
06] Auditor’s Responsibility
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due 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 audit conducted in accordance with
SAs will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
-As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
-Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
-Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the
Companies Act, 2013, we are also responsible for expressing our opinion on whether the
company has adequate internal financial controls system in place and the operating
effectiveness of such controls.
-Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
-Conclude on the appropriateness of managements use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditors
report. However, future events or conditions may cause the Company to cease to continue as
a going concern.
-Evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit. We also
provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
07] Report on Other Legal and Regulatory Requirements
1) As required by the Companies (Auditors Report) Order, 2016 ("the Order"),
issued by the Central Government of India in terms of sub-section (11) of section 143 of
Companies Act, 2013, we give in the Annexure A, a statement on the matters specified in
paragraph 3 and 4 of the Order, to the extend applicable.
2) With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate report in the Annexure B
3) As required by section 143(3) of the Act, we report that:
a) Except for the effects of the matters described in Basis for Qualified Opinion
paragraph, we have sought & obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our audit;
b) Except the matters described in Basis for Qualified Opinion paragraph, 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] Except for the effects of the matters described in Basis for Qualified Opinion
paragraph, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt
with by this Report are in agreement with the books of account;
d] Except for the possible effects of the matters described in the Basis for Qualified
Opinion paragraph, In our opinion, the aforesaid 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] 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.
f] On the basis of written representations received from the Directors as on March
31,2021. and taken on record by the Board of Directors, none of the directors is
disqualified as on March 31,2021. from being appointed as a director in terms of Section
164(2] of the Act.
g] Except the matters described in Basis for Qualified Opinion paragraph, in our
opinion, We have no qualification, reservation or adverse remark relating to the
maintenance of accounts and other matters connected therewith;
h] With respect to the other matters to be included in the Auditors 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 details of pending litigations, amount involved, contingent liability for these
litigations are given in Note No. 37 to the financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses.
iii. There are no such amounts which are required to be transferred to Investor
Education and Protection Fund in accordance with the relevant provisions of the Companies
Act, 2013 and rules made there under.
ANNEXURE A TO THE AUDITORS REPORT REFERRED TO IN OUR REPORT OF EVEN DATE FOR THE YEAR
ENDED AS ON 31.03.2021
(i) Property, Plant & Equipments:
(a) The Company has maintained proper records showing full particulars including
quantitativ details and situation of Property, Plant & Equipments.
(b) The Property, Plant & Equipments have been physically verified by the
management at reasonabl intervals. No material discrepancies were noticed on such
verification.
(C ) Title deeds of immovable property has been held in the name of company, for this
purpose we hav relied on 7/12 abstract keptron record as on 31.03.2021.
(ii) Inventory:
According to the information & explanations given, the annual physical verification
of inventor could not be conducted as on 31st March 2021 due to Government imposed
lockdowns and travf restrictions because of COVID 19. As per the information given,
inventory verification wa conducted on a later date i.e 14th June, 2021 by deriving the
inventory as on 31st March 2021. A per information & explanations given to us, no
major discrepancies were noticed on such physic; count & verification of stock as
compared to book records.
(iii) Loans:
During the year under review, the company has not granted any loan secured or unsecured
t Companies, Firms, Limited Liability Partnership or other parties covered in register
maintaine u/s 189 of the Companies Act, 2013 hence clause (iii) (a) to (c) are not
applicable.
(iv) Loans, Investment and Guarantees
As per the information and explanations given to us we are of the opinion that the
Company ht complied the provisions of Section 185 and 186. The Company has not given any
guarantee t others.
(v) Deposits:
The Company has not accepted any deposits within the meaning of Sections 73 to 76 of
the Act an the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly,
the provisions < clause 3 (v) of the Order are not applicable to the Company and hence
not commented upon.
(vi) Cost Records:
As explained to us Central Government has not prescribed for maintenance of cost
records und< sub-section (1) of section 148 of Companies Act, 2013.
(vii) Statutory Dues:
(a) The Company has not being regular / delayed in payment of undisputed statutory dues
includir provident fund, employees state insurance, income-tax, customs duty, goods and
service tax, ce: and other statutory dues applicable to it. ^e*"**^
[b) According to the information and explanations given to us, no undisputed amounts
payable in respect of provident fund, employees’ state insurance, income-tax, customs
duty, goods and service tax, cess and other statutory dues were outstanding, at the year
end, for a period of more than six months from the date they became payable, except in
following cases noticed during the period under review:
i) Income Tax demand reflected on Income Tax website of Rs.30,879/- for the period from
A.Y 2007-08 to 2014-15 for which payment is made on 13/06/2021. There are no dues.
ii) Undisputed demand for TDS defaults shown on TDS Traces website of Rs. 4,91,890.00
/- which are not provided in books & paid till the date of our audit.
(c) According to the information and explanations given to us, there are no material
disputed dues ir respect of Service Tax, Duty of Customs and cess which have not been
deposited with the appropriate authorities on account of any dispute. However, according
to information anc explanations given to us & on the basis of documents examined, the
following dues of Income ta> has not been deposited by the Company on account of
disputes:
NAME OF THE STATUE : THE INCOME TAX ACT, 1961
| Period |
Income Tax Demand |
Details |
Forum |
| A. Y. 2013-2014 |
NIL [Refer Note) |
Income Tax Department Filed Appeal against the Order of Commissioner Of
Income Tax (Appeals)-l, Aurangabad |
Income Tax Appellate Tribunal, Pune |
| A. Y. 2014-2015 |
Rs. 82,44,360/- |
Income Tax Department Filed Appeal against the Order of Commissioner Of
Income Tax [Appeals)-!, Aurangabad |
Income Tax Appellate Tribunal, Pune |
Note Assessed income has been set off against the B/F Business Loss hence Tax Liability
is NIL
(viii) Default to FIS & Banks:
The company has defaulted in repayment of loans or borrowing from the Bank [State Bank
of India MIDC Waluj, Aurangabad Branch [Currently shifted to Stressed Assets Management
Branch -II Mumbai)] in respect of secured loans for last few years. Further, the
outstanding loan have beer classified as NPA as on 27 June 2016, by the bank. The details
of defaults in repayment made by th< company is as follows:
Details of defaults in repayment of Loans :
| Particulars |
Amount in Rs |
| Principal |
246390111 |
| Interest accrued |
200092041 |
| Penal Interest |
23464439 |
(Note: The above figures are based on Balance Confirmations given by the Bank, while
the company has not accounte for the interest due on the loans during the year]
(ix) Utilization of IPO, Further Public Offer & Term Loan:
During the current financial year, the company has not raised any public issue and any
fresh tern loan, hence not applicable.
(x) Frauds:
During the course of our examinations of the books & records of the company,
carried out in accordance with the generally accepted auditing practices in India &
according to the information & explanations given to us, we have neither come across
any instances of material fraud on or by the Company, noticed or reported during the year,
nor have we been informed of such case by management.
Cxi) Approval of Managerial Remuneration :
During the year company has not paid any Managerial Remuneration. Hence, not
applicable.
(xii) Nidhi Company : Company is not a Nidhi Company. Hence, Not Applicable.
(xiii) Related Party Transactions:
As per the information and explanation given to us, all transactions with related
parties are ir compliance with section 177 and 188 of Companies Act, 2013 and the details
have been disclosct in the Financial Statements as required by AS-18.
(xiv) Private Placement or Preferential Issues
The company has not made any preferential allotment or private placement of shares or
fully oi partly convertible debentures during the year under review.
(xv) Non Cash Transactions:
According to the information given to us, the company has not entered into any non-cast
transactions with directors or person connected with him .
(xvi) Register under RBI Act 1934 :
The company is not required to be registered u/s 45-IA of Reserve Bank of India Act
,1934.
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of
Sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act’)
Opinion
We have audited the internal Financial controls over financial reporting ofRJ Biotech
Limited (The Company’) as of 31st March, 2021 in conjunction with our audit of the
Standalone Financial Statements of the Company for the year ended and as on that dates.
In our opinion, to the best of our information and according to the explanation given
to us, the Company has, in all material respects, an adequate internal financial controls
system over financial reporting and such internal Financial controls over Financial
reporting were operating effectively as at 31bt March, 2021, based on the
internal control over Financial reporting criteria established by the Company considering
the essential components of internal control stated in the Guidance Note on Audit of
Internal Financial Controls over Financial Reporting (hereinafter referred as "the
guidance note") issued by the Institute of Chartered Accountant of India.(hereinafter
referred as "ICA1")
Management’s Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting criteria
established by the Company considering the essential components of internal control stated
in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting
(the Guidance Note’) issued by the Institute of Chartered Accountants of India (the
ICA1’)". These responsibilities include the design, implementation and
maintenance of adequate internal Financial controls that were operating effectively for
ensuring the orderly and efficient conduct of its business, including adherence to
Companys policies, the safeguarding of its assets, the prevention and detection of frauds
and errors, the accuracy and completeness of the accounting records, and the timely
preparation of reliable Financial information, as required under the Act.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with the Standards on Auditing (the Standards’) prescribed under section 143(10) of
the Act and Guidance Note, to the extent applicable to an Audit of internal Financial
controls, both issued by the ICA1. Those Standards and the Guidance Note lequiie that we
comply with the ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether adequate internal Financial controls over financial reporting was
established and maintained and if such controls operated effectively in all material
respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal Financial controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over Financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgment, including the assessment of the risks of
material misstatement of the Financial Statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis foi oui audit opinion on the Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company’s internal financial control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles.
A Company’s internal financial control over financial reporting includes those
policies and procedures that
i. Pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the Company;
ii. Provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the Company are being made only in
accordance with authorizations of management and directors of the company; and .
iii. Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the Companys assets that could have a
material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting Because of
the inherent limitations of internal financial controls over financial reporting,
including the possibility of collusion or improper management override of controls,
material misstatements due to ei 1 oi 01 fraud may occur and not be detected. Also,
projections of any evaluation of the internal financial controls over financial reporting
to future periods are subject to the risk that the internal financial control ovei
financial reporting may become inadequate because of changes in conditions, or that the
degree of conipbance with the policies or procedures may deteriorate.
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