To
The Members of
Celestial Biolabs Limited
Report on the audit of the financial statements
OPINION
We have audited the financial statements of Celestial Biolabs Limited ("the
Company"), which comprise the balance sheet as at March 31, 2022, and 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 then ended, and notes to the financial
statements, including a summary of significant accounting policies and other explanatory
information.
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid financial statements give the information required by the
Companies Act 2013 ("Act") in the manner so required and give a true and fair
view, in conformity with the Indian Accounting Standards prescribed under section 133 of
the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended,
("Ind AS") and other accounting principles generally accepted in India, of the
state of affairs of the Company as at March 31, 2022, the profit and total comprehensive
income, changes in equity and its cash flows for the year ended on that date.
BASIS FOR OPINION
We conducted our audit of the financial statements in accordance with the Standards on
Auditing ("SA"s) specified under section 143(10) of the Act. Our
responsibilities under those Standards are further described in the Auditors
Responsibilities for the Audit of the 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 ("ICAI") together with the ethical
requirements that are relevant to our audit of the financial statements under the
provisions of the Act and the Rules made thereunder, and we have fulfilled our other
ethical responsibilities in accordance with these requirements and the ICAIs Code of
Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to
provide a basis for our audit opinion on the financial statements.
MATERIAL UNCERTAINTY RELATED TO GOING CONCERN
We draw attention to note 1 (B)(1) of the Statement, which indicates that the Company
has accumulated losses and its net worth has been significantly eroded, the Company has a
net loss during the current year. These conditions, along with other matters set forth in
note 1 (B)(1) indicate that a material uncertainty exists that may cast significant doubt
on the Companys ability to continue as a going concern. However, based upon the measures
as set forth in note 1 (B)(1), including necessary financial support from a significant
promoter shareholder, the management and the Board of Directors of the Company have a
reasonable expectation that the Company will be able to realise its assets and discharge
all its contractual obligations and liabilities as they fall due in near future in the
normal course of the business. Accordingly, management has prepared the financial
statements on a going concern basis.
Our opinion is not modified in respect of this matter.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current year. These matters
were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material Uncertainty Related to Going
Concern section, we have determined that they are no other matters which are considered to
be the key audit matters
Other Information
The Companys board of directors is responsible for the preparation of the other
information. The other information comprises the information included in the Management
Discussion and Analysis, Boards Report including Annexures to Boards Report, Business
Responsibility Report, Corporate Governance and Shareholders Information, but does not
include the financial statements and our auditors report thereon.
Our opinion on the financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read
the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained during the
course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
Managements responsibility for the financial statements
The Companys board of directors is responsible for the matters stated in section 134
(5) of the Act with respect to the preparation of these financial statements that give a
true and fair view of the financial position, financial performance including other
comprehensive income, cash flows and changes in equity of the Company in accordance with
the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with
the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting
Standards) Rules, 2016, as amended from time to time, and other accounting principles
generally accepted in India.
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 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 Companys financial
reporting process.
Auditors responsibilities for the audit of the financial statements
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 auditors 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 scepticism 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 financial control relevant to the audit in
order to design audit procedures that are appropriate in the circumstances. Under section
143(3)(i) of the Act, 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 the 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.
Materiality is the magnitude of misstatements in the financial statements that,
individually or in aggregate, makes it probable that the economic decisions of a
reasonably knowledgeable user of the financial statements may be influenced. We consider
quantitative materiality and qualitative factors in (i) planning the scope of our audit
work and in evaluating the results of our work; and (ii) to evaluate the effect of any
identified misstatements in the financial statements.
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.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the financial statements of the
current period and are therefore the key audit matters. We describe these matters in our
auditors report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
Emphasis of Matter
1. The Company has long-term borrowings with State bank of India and the bank
sanctioned the One Time Settlement (which has expired on date) for Rs 305.22 lakhs. The
Company is carrying the One Time Settlement amount as the closing balance and has not
recognized interest expense.
Other Matters
1. We draw your attention to note 24 to the financial results/ statements, where the
management had commented that the previous year comparatives are based on the financial
statements Audited and approved by the board of directors but remains unadopted, by the
shareholders, as the company has not complied with the provisions of section 96 of
companies act, 2013, and has not conducted the Annual General Meeting (AGM) as the
company. Our audit is carried on based on these unadopted financial results carried
forward to the current year.
Report on other legal and regulatory requirements
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
the Companies Act, 2013, we give in Annexure "B" a statement on the
matters specified in paragraphs 3 and 4 of the Order.
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 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, 2022 taken on record by the board of directors, none of the directors is disqualified
as on March 31, 2022 from being appointed as a director in terms of Section 164 (2) of the
Act;
(f) 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 "Annexure A". Our report expresses an unmodified
opinion on the adequacy and operating effectiveness of the Companys internal financial
controls over financial reporting;
(g) With respect to the other matters to be included in the Auditors Report 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 the explanations given to us,
the remuneration paid by the Company to its directors during the year is in accordance
with the provisions of section 197 of the Act; and
(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;
a. The Company does not have any pending litigations which would impact its financial
position;
b. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses; and
c. There has been no delay in transferring amounts, required to be transferred, to the
Investor Education and Protection Fund by the Company
ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 2 (f) under Report on other legal and regulatory
Requirements section of our report to the Members of Celestial Biolabs Limited of even
date)
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")
We have audited the internal financial controls over financial reporting of Celestial
Biolabs Limited ("the Company") as at March 31, 2022, in conjunction with our
audit of the financial statements of the Company for the year ended on that date.
Managements responsibility for internal financial controls
The board of directors of the Company 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 issued by the Institute of Chartered Accountants of India. 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, 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 Companies Act, 2013.
Auditors responsibility
Our responsibility is to express an opinion on the internal financial controls over
financial reporting of the Company based on our audit. We conducted our audit in
accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants
of India and the standards on auditing prescribed under Section 143 (10) of the Companies
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 and plan
and perform the audit to obtain reasonable assurance about whether adequate internal
financial controls over financial reporting were 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 in 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 for our audit opinion on the Companys internal financial control system
over financial reporting.
Meaning of internal financial controls over financial reporting
A companys 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 companys 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 authorisations of management and directors of the company; and
(iii) provide reasonable assurance regarding prevention or timely detection of
unauthorised 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 of override of
controls, material misstatements due to error or 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
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion and according to the information and explanations given to us, the
Company has, in all material respects, an adequate internal financial control system over
financial reporting and such internal financial controls over financial reporting were
operating effectively as at March 31, 2022, 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 issued by the Institute of Chartered Accountants of India.
ANNEXURE "B" TO THE INDEPENDENT AUDITORS REPORT
1. (a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets.
b) The company has a program of verification to cover all the items of tangible fixed
assets in a phased manner which in our opinion, this periodicity of physical verification
reasonable having regard to the size of the company and the nature of its asset. According
to the information and explanations given to us and as examined by us, no material
discrepancies were noticed on such verification.
c) According to the information and explanations given to us, and on the basis of our
examination of the records of the company, the original title deeds of immovable
properties are held with the bank, where the company has taken loan, hence we are unable
to comment on this clause.
d) the Company has not revalued its Property, Plant and Equipment (including Right of
Use assets) or intangible assets or both during the year hence this clause not applicable
e) As per information and explanation given to us there is no proceedings have been
initiated or are pending against the company for holding any Benami property under the
"Ben-ami Transactions (Prohibition) Act, 1988 and Rules made thereunder; and
therefore the question of our commenting on whether the company has appropriately
disclosed the details in financial statements does not arise.
2 a) The physical verification of inventory has been conducted at the year end. As
certified by the management the discrepancies noted on physical verification of inventory
as compared to book of records were not material. However, we recommend the management to
conduct the physical verification of inventories on quarterly basis and maintain proper
records commensurate to the nature and size of the business.
b) During the year the company has not been sanctioned working capital limits in excess
of Rs 5 crores, in aggregate from banks and financial institutions on the basis of
security of current assets and accordingly, the question of our commenting on whether the
quarterly returns of statements are in agreement with the unaudited books of accounts of
the company does not arise
3. According to the information and explanations given to us during the year the
Company has not granted any loans, secured or unsecured, to companies, firms Limited
liability partnerships or other parties covered in the register maintained under Section
189 of the Act. Accordingly, the provisions of clause 3 (iii) (a) to (f) of the Order are
not applicable to the Company and hence not commented upon.
4. In our opinion and according to the information and explanations given to us, no
loans, investment and guarantees have been provided to the parities covered under section
185 and 186 of the Act. Accordingly, paragraph 3 (iv) of the order is not applicable.
5. The company has not accepted any deposits from the public. Therefore, the directives
issued by the Reserve Bank of India and provisions of section 73 to 76 or any other
relevant provisions of the Companies Act, 2013 and rules framed there under are not
applicable. Consequently no order has been passed by Company Law Board or National Company
Law Tribunal or Reserve Bank of India or any court or any other tribunal, on compliance or
non -compliance of the same. Accordingly, clause (v) of the Order is not applicable
6. The cost Accounting records pursuant to the rules made by the Central Government for
the maintenance of cost records under section 148(1) of the Companies Act, 2013 are not
applicable.
7. In respect of statutory dues:
(a) According to information and explanations given to us and on the basis of our
examination of the books of account, and records, undisputed statutory dues including
Income-Tax, Sales tax, Value added Tax, Service tax, Goods and Service Cess and other
statutory dues have not generally been regularly deposited with the appropriate
authorities, and they have been though the delays in deposit have not been serious
According to the information and explanations given to us, GST of Rs. 31,360, payable
in respect of the above were in arrears as at March 31, 2022 for a period of more than six
months from the date on when they become payable.
(b) According to the information and explanations given to us and the records of the
company examined by us, there are no dues of income-tax, sales- tax, service tax, goods
and service tax, duty of customs, duty of excise and value added tax which have not been
deposited on account of any dispute.
8. According to the information and explanations given to us, there are no transactions
in the books of accounts that has been surrendered or disclosed as income during the year
in the tax assessments under the Income Tax Act, 1961 that has not been recorded in the
books of account
9. a) According to the information and explanation given to us and records examined by
us, the Company has defaulted in repayment of dues to banks amount of Rs. 305.33 lakhs
borrowed in the form of term loan The Company does not have any dues to debenture holders
during the year.
b) According to the information and explanations given to us and on the basis of our
audit procedures, we report that the Company has not been declared Willful Defaulter by
any bank or financial institution or government or any government authority.
c) In our opinion, and according to the information and explanations given to us, the
term loans have been applied for the purposes for which they were obtained.
d) According to the information and explanations given to us, and the procedures
performed by us, and on an overall examination of the financial statements of the Company,
we report that no funds raised on short-term basis have been used for long-term purposes
by the company
e) According to the information and explanations given to us and on an overall
examination of the financial statements of the Company, we report that the Company has not
taken any funds from any entity or person on account of or to meet the obligations of its
subsidiaries, associates or joint ventures. In view of the above, reporting under clause 3
(ix)(e) of the Order is not applicable
f) According to the information and explanations given to us and procedures performed
by us, we report that the Company has not raised loans during the year on the pledge of
Securities held in its subsidiaries, joint ventures or associate companies.
10. a) In our opinion and according to the information and explanations given to us, by
the management, The Company did not raise any moneys by way of initial public offer or
further public offer (including debt instruments) during the year
b) . Based upon the audit procedures performed and the information and explanations
given by the management, the company has not made any preferential allotment or private
placement of shares or fully or partly convertible debentures during the year under
review. Accordingly, the provisions of clause 3(x)(b) of the Order are not applicable to
the Company and hence not commented upon.
11. a) During the course of our examination of the books and records of the company
carried out in accordance with the generally accepted auditing practices in india, and
accordance to the information and explanation given to us, we have neither come across any
instances of material fraud by the company or on the company, noticed or reported during
the year, nor have we been informed of any such cases by the management
b) During the course of our examination of the books and records of the Company,
carried out in accordance with the generally accepted auditing practices in India, and
according to the information and explanations given to us, a report under Section 143(12)
of the Act, in Form ADT-4, as prescribed under rule 13 of Companies (Audit and Auditors)
Rules, 2014 was not required to be filed with the Central Government. Accordingly, the
reporting under clause 3(xi) (b) of the Order is not applicable to the Company.
c) During the course of our examination of the books and records of the Company carried
out in accordance with the generally accepted auditing practices in India, and according
to the information and explanations given to us, and as represented to us by the
management, no whistle-blower complaints have been received during the year by the
Company. Accordingly, the reporting under clause 3(xi)(c) of the Order is not applicable
to the Company.
12. Since the company is not a Nidhi company, Nidhi rules, 2014 are not applicable.
Accordingly clause (xii) of the order is not applicable to the company
13. According to the information and explanations given to us, and based on our
examination of the records of the company, transactions with the related parties are in
compliance with sections 177 and 188 of the Act where applicable and details of such
transactions have been disclosed in the financial statements as required by the applicable
accounting standards
14. a) The Company has an internal audit system commensurate with the size and nature
of its business.
b) The internal audit reports of the Company issued till the date of the audit report,
for the period under audit have been considered by us.
15. According to the information and explanations given to us and based on our
examination of the records of the company The Company has not entered into any non-cash
transactions with the directors or persons connected with them as covered under Section
192 of the Act.
16. a) In our opinion, the company is not required to be registered under section 45 IA
of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvia )
of the Order are not applicable to the Company and hence not commented upon
b) the Company has not conducted any Non-Banking Financial or Housing Finance
activities hence the provisions of clause 3 (xvi b ) of the Order are not applicable to
the Company and hence not commented upon
c) the Company is not Core Investment Company (CIC) as defined under the Regulations by
the Reserve Bank of India
In view of the above, reporting under clause 3 (xvi) (c) and (d) of the Order is not
applicable
17. The Company has incurred cash losses of Rs 30.08 Lacs in the current financial Year
and in Rs 13.22lacs the immediately preceding financial year
18. There has been no resignation of the statutory auditors during the year and
accordingly the reporting under clause (xviii) is not applicable.
19. According to information and explanation given to us on the basis of the financial
ratios, ageing and expected dates of realization of financial assets and payment of
financial liabilities, other information accompanying the financial statements, our
knowledge of the Board of Directors and management plans, the auditor is of the opinion
that no material uncertainty exists as on the date of the audit report that company is
capable of meeting its liabilities existing at the date of balance sheet as and when they
fall due within a period of one year from the balance sheet date.
20. a). According to information and explanation given to us, provisions of Section 135
of Companies Act, 2013 relating to Corporate Social Responsibility is not applicable to
the company hence this clause is not applicable
21. the reporting under clause 3 (xxi) of the order is not applicable in respect of
audit of financial statements accordingly no comments in respect of the said clause has
been included in this report.
| As per our Report of even date |
| For M Surendra and Associates Chartered Accountants |
| Firm Reg No. 017280S |
| CA Shaik Shavali P Partner |
| M.No. 245517 |
| Place : Hyderabad |
| Date: 02.09.2022 |
+91-9892691696
