R J Bio-Tech Ltd Directors Report.

The Members,

R J Bio-Tech Limited,

"Siddharth Arcade", Opp. Holiday Camp, Station Road,

Aurangabad - 431 005

01] Qualified Opinion

We have audited the accompanying financial statements of R J Bio-Tech Limited (‘the Company), which comprise the Balance Sheet as at 31 March 2020, 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).

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 31 March 2020, its 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 Companys 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. 04.15 Crores during the year ended 31st March, 2020 and also its current liabilities over current assets exceeded by Rs. 22.94 Crores.

- The Company has accumulated losses and its Net Worth has been fully eroded.

- The Companys financing arrangements expired and the amount outstanding of Rs. 36.89 Crores was payable on March 31, 2020. The Company has been unable to re-negotiate or obtain replacement financing and is currently classified by bank as Non Performing Assets.

ii) As per the information & explanations given, management has sent balance confirmations to outstanding debtors but we have not received the confirmations. In the absence of unavailability of confirmations we are unable to confirm or verify by alternative means accounts receivable included in the Balance Sheet at a total amount of Rs.16.98 crores (before provision for bad & doubtful debts of Rs. 9.62 Crores) as at March 31, 2020.

iii) Under the Micro, Small fit Medium Enterprises Development Act, 2006 which came into force from 2nd October, 2006, certain disclosures are required to be made relating to Micro, Small fit Medium Enterprises. According to the information fit explanation given to us and on the basis of our examination of the records of the company, the company has sent necessary communication to all the vendors to confirm their MSME Status, however the same confirmation is awaited. Since the relevant information is not readily available, no disclosure have been made in the accounts.

iv) The company has not determined the liability towards the gratuity, retirement benefits, leave encashment as per the accounting standard 15 - "Employee Benefits" prescribed under section 133 of the Companies Act, 2013. The said provision has not been made in the books of accounts as per the acturial valuation report. The financial statement do not disclose the financial impact of the above provisions. The Profit in the statement of Profit fit Loss and Current Liabilities are understated / overstated to that extent. This constitutes a departure from the Accounting Standard -15 "Employee Benefits".

As a result of the matters stated in Para (ii), Para (iii) and Para (iv), we were unable to determine whether any adjustments might have been found necessary in respect of recorded receivables and payables in the Balance Sheet and the corresponding elements making up the Statement of Profit and Loss and Cash Flow Statement.

v) As per Internal Audit Report dated 22nd June, 2020 has given Disclaimer related to circulation and use of its report, because of which we cant rely on the same.

We 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] Other Matters

As the company being a listed company it is mandatory to appoint whole time company secretary but the company has not appointed new company secretary till the date of signing the financials i.e. 29th June, 2020. Previous Company Secretary has resigned on 13 April, 2020.

04] 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] Managements 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.

Those Board of Directors are also responsible for overseeing the companys financial reporting process.

06] Auditors 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 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.

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 the Companies Act, 2013, we give in the Annexure A,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) 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, 2020, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2020, from being appointed as a director in terms of Section 164(2) of the Act.

g) 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 B; 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:

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 AUDITOR S REPORT

REFERRED TO IN PARAGRAPH 7 OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF R J BIO-TECH LIMITED ON THE FINANCIAL STATEMENTS;

FOR THE YEAR ENDED AS ON 31.03.2020

(i) Property, Plant & Equipments:

(a) The Company has maintained proper records showing full particulars including quantitative details and situation of Property, Plant & Equipments.

(b) All property, plant and equipment have not been physically verified by the management during the year but there is a regular programme of verification designed to cover all items in a phased manner, in our opinion, it is reasonable having regard to the size of the Company and the nature of its assets. 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 have relied on Title Investigation Report issued by advocate dated 30.06.2014.

(ii) Inventory:

According to the information & explanations given, the annual physical verification of inventory could not be conducted as on 31st March 2020 due to Government imposed lockdowns and travel restrictions because of COVID 19. As per the information given, inventory verification was conducted on a later date 22nd June, 2020. The management carried out appropriate roll-back procedures to arrive at implied stock levels as on 31st March, 2020 which was cross checked and reconciled with the inventory level as per Companys inventory software.

As per information & explanations given to us, no major discrepancies were noticed on such . physical 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 to Companies, Firms, Limited Liability Partnership or other parties covered in register maintained 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 has complied the provisions of Section 185 and 186 of the Companies Act, 2013

(v) Deposits:

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 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 under sub-section (1) of section 148 of Companies Act, 2013.

(vii) Statutory Dues:

(a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income-tax, customs duty, goods and service tax, cess and other statutory dues applicable to it.

(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.18,825/- for the period from A.Y. 2007-08 to 2014-15 for which rectification u/s 154 is pending.

ii) Undisputed demand for TDS defaults shown on TDS Traces website of Rs.6,32,050.00 /-which are not provided in books.

(c) According to the information and explanations given to us, there are no material disputed dues in 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 and explanations given to us & on the basis of documents examined, the following dues of Income tax 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)-1, 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)-1, 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:

In our opinion & according to the information given to us, the company has defaulted in repayment of dues to the financial institutions and bank, details are as under -

Details of defaults in repayment of Loans : (Amount in Rs.)

Account No. Type of Loan Amount of Default as on respective date Date on Which Installment / Interest due Date on Which Installment / Interest Paid
12,95,821.00 01.05.2016 Yet to be paid
23,20,784.00 01.06.2016 Yet to be paid
28,64,986.35 01.07.2016 Yet to be paid
25,96,114.99 01.08.2016 Yet to be paid
26,19,531.51 01.09.2016 Yet to be paid
25,25,629.40 01.10.2016 Yet to be paid
26,17,300.94 01.11.2016 Yet to be paid
25,35,852.94 01.12.2016 Yet to be paid
26,19,635.97 01.01.2017 Yet to be paid
32133824088 Cash Credit - SBI 25,97,037.89 01.02.2017 Yet to be paid
23,65,819.75 01.03.2017 Yet to be paid
26,01,008.93 01.04.2017 Yet to be paid
20,99,40,558.51 27.06.2016 Yet to be paid
3,30,69,129.00 Accrued Int for the F. Y. 17-18 Yet to be paid
3,42,24,161.54 Accrued Int for the F. Y. 18-19 Yet to be paid
67,66,731.59 Accrued Int for the F. Y. 19-20 Yet to be paid
3,54,758.00 01.05.2016 Yet to be paid
3,69,877.00 01.06.2016 Yet to be paid
3,97,332.27 01.07.2016 Yet to be paid
3,89,613.97 01.08.2016 Yet to be paid
3,92,844.86 01.09.2016 Yet to be paid
3,80,205.77 01.10.2016 Yet to be paid
3,92,762.98 01.11.2016 Yet to be paid
3,80,204.93 01.12.2016 Yet to be paid
3,92,762.97 01.01.2017 Yet to be paid
• 33686610896 SBI SLC 3,92,878.43 01.02.2017 Yet to be paid
3,54,859.05 01.03.2017 Yet to be paid
3,92,529.61 01.04.2017 Yet to be paid
3,15,00,000.00 27.06.2016 Yet to be paid
49,81,657.00 Accrued Int for the F. Y. 17-18 Yet to be paid
62,36,307.16 Accrued Int for the F. Y. 18-19 Yet to be paid
8,91,694.65 Accrued Int for the F. Y. 19-20 Yet to be paid
50,963.72 01.07.2016 Yet to be paid
52,051.69 01.08.2016 Yet to be paid
52,489.92 01.09.2016 Yet to be paid
50,801.27 01.10.2016 Yet to be paid
52,478.90 01.11.2016 Yet to be paid
50,801.16 01.12.2016 Yet to be paid
52,478.89 01.01.2017 Yet to be paid
52,494.53 01.02.2017 Yet to be paid
32929483076 Term Loan - SBI 47,414.57 01.03.2017 Yet to be paid
52,447.29 01.04.2017 Yet to be paid
41,65,405.00 27.06.2016 Yet to be paid
6,64,434.00 Accrued Int for the F. Y, 17-18 Yet to be paid
7,61,613.00 Accrued Int for the F. Y. 18-19 Yet to be paid
1,56,605.10 Accrued Int for the F. Y. 19-20 Yet to be paid
9,094.69 01.07.2016 Yet to be paid
10,238.75 01.08.2016 Yet to be paid
10,324.95 01.09.2016 Yet to be paid
9,992.79 01.10.2016 Yet to be paid
10,244.93 01.11.2016 Yet to be paid
9,992.07 01.12.2016 Yet to be paid
10,322.78 01.01.2017 Yet to be paid
10,325.86 01.02.2017 Yet to be paid
321340917079 Term Loan - SBI 9,326.61 01.03.2017 Yet to be paid
10,316.57 01.04.2017 Yet to be paid
6,26,025.00 01.04.2016 Yet to be paid
1,03,105.00 Accrued Int for the F. Y. 17-18 Yet to be paid
1,18,186.00 Accrued Int for the F. Y. 18-19 Yet to be paid
18,919.07 Accrued Int for the F. Y. 19-20 Yet to be paid

The company has defaulted in the repayment of loans as stated above. The State Bank of India, MIDC Waluj, Aurangabad Branch (Currently shifted to Stressed Assets Management Branch -II, Mumbai) has classified above accounts on 27th June, 2016 as Non Performing Asset in accordance with the directions/guidelines relating to asset classification issued by the Reserve Bank of India.

Interest on Non Performing Asset has been booked on the basis of Balance Confirmation given by the State Bank Of India, Stressed Assets Management Branch-ll, Mumbai vide letter dated 16.06.2020.

(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 term 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.

(xi) 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 in compliance with section 177 and 188 of Companies Act, 2013 and the details have been disclosed 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 or 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-cash 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.

Annexure B‘ to the Auditors* Report

Report on the Internal Financial Controls 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 of R J Biotech Limited (‘the Company) as of 31 March 2020 conjunction with our audit of the financial statements of the Company for the year ended on that date.

In our opinion and to the best of our information and according to the explanations 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 31st March 2020, based on the internal financial 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 Accountants of India (hereinafter referred as "ICAI").

Managements 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 Mote on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘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 its 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 Companies Act, 2013.

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 Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the ‘Guidance Note) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Mote 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 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 for our audit opinion on the Companys internal financial controls 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

(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 the 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

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 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.