To The Members of Cennex Laboratories Limited
Report on the Audit of the Standalone Financial Statements
Qualified Opinion
We have audited the accompanying standalone financial statements of Gennex Laboratories
Limited (the Company), which comprise the Standalone Balance Sheet as at 31st March,
2023, the Standalone Statement of Profit and Loss (including Other Comprehensive Income),
the Standalone Cash Flow Statement and the Standalone Statement of Changes in Equity for
the year ended, and 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 except for the information referred to in Basis for Qualified opinion of our
report, the aforesaid standalone 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 accounting principles generally accepted in India including Indian
Accounting Standards (Ind AS) specified under section 133 of the Act, of the state of
affairs (Financial position) of the Company as at 31st March, 2023, and its profit
(financial performance including other comprehensive income), its cash flows and the
changes in equity for the year ended on that date.
Basis for Qualified Opinion
The Balances of Current Assets, Other Non-Current Assets, Non-Current Liabilities,
Other Non-Current Liabilities, Current Liabilities & Other Current Liability are
subject to Confirmation/reconciliations. The Impact of the same is, unascertainable.
We conducted our audit in accordance with the Standards on Auditing (SAs) 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 thereunder, and we have fulfilled our other
ethical responsibilities in accordance with these requirements and the Code of Ethics. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide
abasis for our opinion.
Key Audit Matter
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the standalone financial statements ofthe current period.
These matters were addressed in the context of our audit of the financial statements asa
whole, and informing our opinion thereon, and we do not provide a separate opinion on
these matters.
We have determined the matter described below to be the key audit matters to be
communicated in our report.
| Key Audit Matter |
How our Audit addressed the key audit matter |
| Carrying value of Investment in Subsidiary entity. |
As informed to us, The Company is still in the construction stage and yet to commence
the operation, Hence, valued at Cost. |
| The Company has an investment of Rs.825.42 lakhs in its Subsidiary Deccan Remedies ltd |
Discussion with the management on the development in these litigations during year
ended March 31st, 2023 |
| Pending Land registration |
Review of the disclosures made by the company in the financial statements in this
regard. |
|
Obtain representation letter from the management on the assessment of these matters. |
Information other than the Financial Statements and Auditors Report thereon
The Companys Board of Directors is responsible for the other information. The other
information comprises the information included in the Annual Report, 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 will 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, considerwhetherthe
other information is materially inconsistent with the financial statements or our
knowledge obtained in the 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.
Responsibilities of Management for theStandalone Financial Statements
The Companys Board of Directors is responsible for the matters stated in section
134(5) of the Actwith respect to the preparation of these standalone financial statements
that give a true and fair view of the state of affairs (financial position), profit or
loss (financial performance including other comprehensive income), cash flows and changes
in equity of the Company in accordance with the accounting principles generally accepted
in India, including the Ind AS 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 ofthe 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.
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 is also responsible for overseeing the Companys financial
reporting process.
Auditors Responsibilities for the Audit ofthe 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 on Standalone Financials that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with Standards on Auditing 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 Standards on Auditing, 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 override 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 sectionl43(3)(i)
of the Act, we are also responsible for explaining 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.
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.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditors Report) Order, 2020 (the Order) issued by the
Central Government of India in terms of section 143(11) ofthe Act, we give in the Annexure
A statement on the matters specified in paragraphs 3 and 4 ofthe Order.
Further to our comments in Annexure A, as requiredby section 143(3) ofthe 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 purpose 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 standalone financial statements dealtwith by this report are in agreement with
thebooks of account;
d) In our opinion, the aforesaid standalone financial statements comply with Ind AS
specified under section 133 ofthe Act;
e) on the basis of the written representations received from the directors and taken on
record by the Board of Directors, none of the directors is disqualified as on 31st March,
2023 from being appointed as a director in terms of section164(2) ofthe Act;
f) we have also audited the internal financial controls over financial reporting
(IFCoFR) of the Company as on 31st March, 2023 in conjunction with our audit of the
standalone financial statements of the Company for the year ended on that date and our
report as per Annexure B expressed unmodified opinion; and
g) with respect to the other matters to be included in the Auditors Report in
accordance with rulell of the Companies (Audit and Auditors) Rules, 2014 (as amended), 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 ofpending litigations on its financial position
as at 31st March 2023;
ii. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses as at 31st March 2023;
iii. There has been no delay in transferring amounts, required to be transferred, to
the Investor Education and Protection Fund bythe Company during theyearended 31st March
2023; and
As required by section 197(16) of the Act, we report that the Company has paid
remuneration to its directors during the year in accordance with the provisions of and
limits laid down under section 197 read with Schedule Vto the Act.
For PPKG&Co
Chartered Accountants
Firms Registration No.: 009655S
Girdhari Lai Toshniwal
Partner
Membership No: 205140
UDIN: 23205140BGUNIA8064
Place: Hyderabad
Date: 30th May, 2023
Annexure A to the Independent Auditors Report of even date to the members of Gennex
Laboratories Limited, on the standalone financial statements for the year ended 31stMarch,
2023
Based on the audit procedures performed for the purposeof reporting a true and fair
view on the standalone financial statements of the Company and taking into consideration
the information and explanations given to us and the books of account and other records
examined by us in the normal course of audit, and to the best of our knowledge and belief,
we report that:
(i) (a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets.
(b) The Company has a regular program of physical verification of its fixed assets
under which fixed assets are verified in a phased manner over a period of three years,
whichin our opinion, is reasonable having regard to the size of the Company and the nature
of itsassets. In accordance with this program, certain fixed assets were verified during
the year and no material discrepancies were noticed on such verification.
(c) The title deeds of all the immovable propertiesfwhich are included under the head
(Property,plant and equipment) are held in the name of the Company except for the Land
purchased from Mercury Fund Management Co, Ltd in the FY2009-10 for Rs 7,78,75,000
situated at Survey no 32-IE, 32-IF,32-IF1 and 32-1F2 at Alkaturru Village Nindra Mandal,
Chitoor District(AP) for the purpose of setting up Unit-II. Registration of the same is
pending forthe reason of conversion from Agricultural Land to Industrial Land.
(d) The company has not revalued any of its Property, Plant and Equipments during
theyear.
(e) As per the information given to us there are no proceedings initiated or pending
against the Company for holding any Benami Property under the Benami Transactions
(Prohibition) Act, 1988 and rules made thereunder.
(ii) (a) In our opinion, the management has conducted physical verification of
inventory at reasonable intervals during theyear, no material discrepancies were noticed
on the aforesaid verification.
(b) The company has been sanctioned working capital limits in excess of five crore
rupees, in aggregate, from banks or financial institutions on the basis of security of
current assets and the quarterly returns and the statements filed by the company with such
banks orfinancial institutions are not in agreement with the books of account of the
Company.
(iii) The Company has not granted any loans, secured or unsecured, to companies, firms,
Limited Liability Partnerships or other parties
(iv) In our opinion, the Company has complied with the provisions of Section 186 in
respect of investments and loans. Further, in our opinion, the Company has not entered
into any transaction covered under Section 185 and Section 186 of the Act in respect of
guarantees and security.
(v) In our opinion, the Company has not accepted any deposits within the meaning of
Sections 73 to 76 of The Act and the Companies (Acceptance of Deposits) Rules, 2014 (as
amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant
to the Rules made by the Central Government for the maintenance of cost records under
sub-section (1) of Section 148 of the Act, as informed to us the provision of sec 148(1)
are now applicable and the Cost audit for the year 2022-23 is in progress.
(vii) (a) Undisputed statutory dues including provident fund, employees state
insurance, income-tax, goods and service tax, duty of customs, cess and other material
statutory dues, as applicable, have generally been regularly deposited withthe appropriate
authorities, though there has been a slight delay in a few cases. Further, undisputed
amounts payable in respect thereofwere outstanding at the year-end for a period of more
than six months from the date they became payable.
(b) The dues outstanding in respect of Income tax, sales-tax, service-tax, duty of
customs on account of disputes, are as follows:
| SI. No Nature of Statute |
Nature of Dues |
Amount (Rs in Lacs) (Disputed) |
Period to which the amount relates to |
Forum where the dispute is pending |
| 1 CST |
Sales Tax |
14.57 |
2007-08 |
Appellate DC(CT) |
|
Total |
14.57 |
|
|
|
|
|
Assmt year |
|
| 2 Income Tax |
Income Tax |
8.22 |
2001-02 |
Appellate Authority |
|
Income Tax |
37.36 |
2002-03 |
Appellate Authority |
|
Income tax |
3.81 |
2015-16 |
Appellate Authority |
|
Income tax |
9.75 |
2019-20 |
Appellate Authority |
|
Total |
59.14 |
|
|
(viii) All the transactions recorded in the books of account have been disclosed as
income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961).
(ix) (a) The Company has not defaulted in repayment of loans or borrowings to any bank
during the year. The Company has loans or borrowings payable to financial institutions or
government and does nothave any outstanding debentures during the year.
(b) The company is not declared willful defaulter by any bank or financial institution
or other lender;
(c) The term loans were applied for the purpose for which the loans were obtained
(d) To the extent of our check, no funds are raised by the company for short term has
been utilized for long term purposes;
(e) 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,
(f) The company has not raised loans during the year on the pledge of securities held
in its subsidiaries, joint ventures or associate companies
(x) (a) The Company has not raised any moneys byway of initial public offer or further
public offer
(b) The company has not made any preferential allotment or private placement of shares
or convertible debentures
(xi) (a) In our opinion, no fraud by the company or any fraud on the company has been
noticed or reported during the year
(b) No report under sub-section (12) of section 143 of the Companies Act has been filed
by the auditors in Form ADT-4as prescribed under rulel3 of Companies (Audit and Auditors)
Rules, 2014with the Central Government;
(c) No Whistle Blowers Complaints were received during the year
(xii) In our opinion, the Company is not a Nidhi Company, accordingly, provisions of
clause 3(xii) of the Order are not applicable.
(xiii) In our opinion all transactions with the related partiesare in compliance with
Sections 177 and 188 of Act, where applicable, and the requisite details have been
disclosed in the standalone financial statements etc., as required by the applicable Ind
AS.
(xiv) (a) The company has an Internal audit system commensurate with the size and
nature of its business;
(b) The reports of the Internal Auditors for the period under audit were considered by
the statutory auditor;
(xv) In our opinion, the Company has not entered into any non-cash transactions with
the directors or persons connected with them covered under Section 192 of the Act.
Accordingly, the provisions of clause 3(xv) of the order are not applicable.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve
Bank of India Act, 1934.
(xvii) The Company has not incurred cash losses in the financial year and in the
immediately preceding financial year
(xviii) The Statutory Auditors of the Company has not resigned during the year.
(xix) 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, the auditors 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;
(xx) The company is not liable to contribute under section 135 of The Companies Act,
2013. Accordingly, the provisions of clause 3(xx) of the order are not applicable.
(xxi) There has been qualifications and adverse remarks by the respective auditors in
the Companies (Auditors Report) Order (CARO) reports of the companies to be included in
the consolidated financial statements.
For PPKG&Co
Chartered Accountants
Firms Registration No.: 009655S
GirdhariLal Toshniwal
Partner
Membership No: 205140
UDIN: 23205140BGUNIA8064
Place: Hyderabad
Date: 30th May, 2023
Annexure B to the Independent Auditors Report of even date to the members of Gennex
Laboratories Limited, on the standalone financial statements for the year ended
31st March 2023
Independent Auditors Report on the Internal Financial Controls under Clause (i) of
Sub-section 3 of Section 143 of the Companies Act, 2013 (the Act)
Opinion
1. In conjunction with our audit of the standalone financial statements of Gennex
Laboratories Limited (the Company) as at and for the year ended 31stMarch2023, we have
audited the internal financial controls over financial reporting (IFCoFR) of the Company
as at that date.
2. In our opinion, the Company has, in all material respects, adequate internal
financial controls over financial Reporting and such controls were operating effectively
as at 31st March 2023, 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 issued by the ICAI.
Managements Responsibility for Internal FinancialControls
3. The Companys Board of Directors 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
lndia(ICAI).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 the Companys business, including adherence to the
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
4. Our responsibility is to express an opinion on the Companys IFCoFR based on our
audit. We conducted our audit in accordance with the Standards on Auditing issued by the
ICAI and deemed to be prescribed under Section 143(10) of the Act, to the extent
applicable to an audit of IFCoFR, and the Guidance Note issued by the ICAI. 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 IFCoFR were
established and maintained and if such controls operated effectively in all material
respects.
5. Our audit involves performing procedures to obtain audit evidence about the adequacy
of the IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining an
understanding of IFCoFR, 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 thefinancial statements, whether due
to fraud or error.
6. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
7. A companys IFCoFR 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
IFCoFR include those policies and procedures that
(1) Pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the company;
(2) 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
(3) 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
8. Because of the inherent limitations of IFCoFR, including the possibility of
collusion or improper management override of controls, material misstatements due to
erroror fraud may occur and not be detected. Also, projections of any evaluation of the
IFCoFR to future periods are subject to the risk that the IFCoFR may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
For PPKG&Co
Chartered Accountants
Firms Registration No.: 009655S
GirdhariLal Toshniwal
Partner
Membership No: 205140
UDIN: 23205140BGUNIA8064
Place: Hyderabad
Date: 30th May, 2023
+91-9892691696
