Mar 31, 2016
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Actâ)
We have audited the internal financial controls over financial reporting of Gayatri Bio Organics Limited ("the Company") as of March 31, 2016 in conjunction with our audit of the Financial Statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs 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" issued by the Institute of Chartered Accountants of India (âICAIâ). 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 companyâs 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.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs 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.
Because of the matter described in Disclaimer of Opinion paragraph below, we were not able to obtain sufficient appropriate audit evidence to provide basis for an audit opinion on internal financial controls system over financial reporting of the Company.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs 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 companyâs 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 expenditure 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 companyâs 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.
Disclaimer of Opinion
According to the information and explanation given to us, the Company is in the process of documenting its internal financial control over financial reporting on criteria based on or 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.
Because of this reason, we are unable to obtain sufficient appropriate audit evidence to provide a basis for our opinion whether the Company had adequate internal financial controls over financial reporting and whether such internal financial controls were operating effectively as at March 31, 2016.
We have considered the disclaimer reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2016 financial statements of the Company, and the disclaimer does not affect our opinion on the financial statements of the Company.
(Referred to in paragraph 2 under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)
(i) In respect of its fixed assets:
(a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) According to the information and explanation given to us, a major portion of fixed assets have been physically verified by its management during the year in accordance with a programme of verification, which, in our opinion, is reasonable having regard to the size of the Company and the nature of the assets. According to the information and explanations given to us, the discrepancies noticed on such verification were not material and have been properly dealt with in the books of account.
(c) According to the information and explanations furnished to us, and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
(ii) In respect of its inventory
(a) According to the information and explanations given to us, the Management has physically verified the inventory during the year. In our opinion, the frequency of verification is reasonable. The discrepancies noticed on verification between physical stock and book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered by clause (76) of section 2 of the Companies Act, 2013. Accordingly, reporting under clauses (a) (b) and (c) of paragraph 3(iii) of the Order does not arise.
(iv) According to the information and explanations furnished to us, the Company has not granted any loans, nor made any investments or given any guarantees or securities during the year to any of the parties specified in the Sections 185 and 186 of the Companies Act, 2013.
(v) According to the information and explanations furnished to us, the Company has not accepted any deposits from the public. Hence, reporting under the provisions of paragraph 3(v) of the Order does not arise.
(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under sub - section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) According to the information and explanations given to us, in respect of statutory dues during the year under report:
(a) on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, income-tax, sales tax, value added tax, duty of customs, service tax, cess and other material statutory dues have not been regularly deposited during the year by the Company with the appropriate authorities and there have been serious delays in large number of cases.
According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, value added tax, duty of customs, service tax, cess and other material statutory dues were in arrears as at 31 March 2016 for a period of more than six months from the date they became payable
(b) According to the information and explanations given to us, there are no material dues of income tax, sales tax, service tax and Value added tax which have not been deposited with the appropriate authorities on account of any dispute. However, according to information and explanations given to us, the following dues of Customs duty and duty of excise have not been deposited by the Company on account of disputes:
Name of the statute |
Nature of dues |
Amount (Rs) |
Period to which the amount relates |
Forum where dispute is pending |
The Customs Act,1962 Central Excise Act,1944 |
Customs Duty Excise duty including penalty |
4,15,87,220* 5,59,55,766 |
Financial Year 1994-95 02/2010 to 08/2014 |
CESTAT-Bangalore CESTAT-Hyderabad |
Central Excise Act,1944 |
Excise duty including penalty |
81,36,208 |
09/2014 to 05/2015 |
CESTAT-Hyderabad |
*Net of deposit. An amount of Rs.37,00,000 has been paid under protest.
(viii) In our opinion and according to the information and explanations furnished to us, the Company has defaulted in repayment of dues on borrowings, as at March 31, 2016. Installments amounting to Rs.6,20,00,000/- and interest amounting to Rs.5,23,19,052/- were due for payment as at 31st March 2016.(Refer Note 2.7 of the financial statements).
Lender Name |
Principal (Rs.) |
Number of Installments |
Period of delay as on 31.03.2016 (in days) |
SICOM Ac.No-F0680 |
2.20.00.000 |
4 |
76-260 |
SICOM Ac.No-F0701 |
4,00,00,000 |
4 |
107-382 |
Lender Name |
Principal (Rs.) |
Number of Installments |
Period of delay as on 31.03.2016 (in days) |
SICOM Ac.No-F0680 |
45,63,278 |
10 |
32-275 |
SICOM Ac.No-F0701 |
4,77,55,774 |
15 |
32-425 |
(ix) According to the information and explanations furnished to us, the Company has, during the year under report, applied the monies raised by it through term loans for the purposes for which they were raised. The Company did not make any initial public offer or further public offer of any of its securities during the year under report.
(x) According to the information and explanations furnished to us, no fraud by the Company, nor any fraud on the Company by any of its officers or its employees has been noticed or reported during the year under report.
(xi) According to the information and explanations given to us and based on our examination of the records of the company, the Company has, during the year under report, paid / provided for managerial remuneration in accordance with Section 197 read with Schedule V of the Companies Act 2013.
(xii) In our opinion, reporting requirement under Paragraph 3(xii) of the order does not arise since, according to the information and explanations furnished to us, the Company is not a Nidhi Company.
(xiii) According to the information and explanations furnished to us, the transactions entered into by the Company with its related parties are in compliance with the requirements of the provisions of Sections 177 and 188 of the provisions of the Companies Act 2013.
(xiv) According to the information and explanations furnished to us, the Company has made preferential allotment of shares converting the 10,85,635, 6% cumulative redeemable convertible preference shares of INR 100 each issued to the promoters with face value of Rs. 100/- each as 10856350 equity shares of Rs. 10/- each on September 10, 2015 as the promoters have exercised the option for conversion.
According to the information and explanations furnished to us, the Company has not made any private placement of its shares or fully or partly convertible debentures during the year under report.
(xv) According to the information and explanations furnished to us, the Company has not entered into any agreements for acquisition of assets from or for transferring its assets to its directors, or the directors of its subsidiary companies or persons connected with such directors, for a consideration other than cash, during the year under report.
(xvi) In our opinion based on the information and explanations furnished to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934.
for M.Bhaskara Rao & Co.,
Chartered Accountants
Firm Regn No:000459S
Place: Hyderabad D BAPU RAGHAVENDRA
Date: 30th May, 2016 PARTNER
Membership No: 213274
Mar 31, 2015
We have audited the accompanying financial statements of M/s. GAYATRI
BIOORGANICS LIMITED (the com- pany) which comprise the Balance Sheet as
at 31st March, 2015, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of the significant
accounting policies and explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these financial statements that give a true and
fair view of the financial position, financial performance and cash
flows of the Company in accordance with the accounting prin- ciples
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting poli- cies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and mainte- nance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy and
com- pleteness 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.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
there under.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion on the
financial statements.
Basis of qualified opinion
The Company's trade receivables include certain trade receivables
amounting to Rs.2,25,75,901/- which are overdue and outstanding for a
period more than three years. The management believes that the same are
fully recoverable as it is in the process of collecting the amounts and
no provisions are required. In the absence of adequate documentation,
we are unable to comment on the timing and the ultimate amount of
collection and its consequential impact on the profit for the year.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effect of the matter described
in the basis for qualified opinion paragraph, the aforesaid financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India, of the state of
affairs of the Company as at March 31, 2015, and its profit and its
cash flows for the year ended on that date.
Emphasis of Matter
Without qualifying our opinion, we invite reference to the following:
* In respect of Sundry Debtors and Sundry creditor balances, according
to the explanations given to us, The Management is in the process of
reconciliation and Confirmation of balances as at the end of the year.
Pending confirmation of balances and reconciliation of the Sundry
debtors and Sundry Creditors the consequent impact on the profit is not
ascertainable.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government in terms of Section 143(11) of
the Act, we give in the Annexure a statement on the matters specified
in paragraphs 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the
directors as on March 31, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act.
(f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of all pending litigations on
its financial position in its financial statements - refer Note 2.25 &
Note 2.34 to the financial statements;
ii. The Company did not have any material foreseeable losses relating
to long-term contracts including derivative contracts.
iii. There were no amounts due for transfer to the Investor Education
and Protection Fund by the Company.
STATEMENT REFERRED TO IN PARAGRAPH (1) OF OUR REPORT OF EVEN DATE
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) A major portion of the fixed assets have been physically verified
during the year by the Management in accordance with a programme of
verification, which, in our opinion, provides for physical verification
of all the fixed assets at reasonable intervals having regard to the
size of the Company and the nature of its assets. According to the
information and explanations given to us, the discrepancies noticed on
such verification were not material and have been properly dealt with
in the books of account.
(ii) In respect of its inventories:
(a) According to the information and explanations given to us, the
Management has physically verified the inventories during the year. In
our opinion, having regard to the nature of business and location of
stocks, the frequency of verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories. The discrepancies noticed on verification between the
physical stocks and the book records were not material and have been
properly dealt in the books of account.
(iii) According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured, to companies,
firms or other parties covered in the Register maintained under Section
189 of the Companies Act, 2013. Accordingly, clause (b) of the Order is
not applicable to the Company.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services and during the course of our audit we have not observed any
major weaknesses in such internal control system. However, in respect
of sale of by- products and sale of maize (traded) during the year,
internal controls need to be further strengthened. According to the
information and explanations given to us, The Management has initiated
steps to introduce the required additional controls relating to the
same.
(v) The Company has not accepted any deposits from the Public.
(vi) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Records and Audit) Rules, 2014,
as amended and prescribed by the Central Government under sub-section
(1) of Section 148 of the Companies Act, 2013, and are of the opinion
that, prima facie, the prescribed cost records have been made and
maintained. We have, however, not made a detailed examination of the
cost records with a view to determine whether they are accurate or
complete.
(vii) According to the information and explanations given to us, in
respect of statutory dues:
(a) on the basis of examination of records of the Company, amounts
deducted /accrued in the books of accounts in respect of undisputed
statutory dues including for Provident Fund, , Employees State
Insurance, Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty
and other material statutory dues have not been regularly deposited
with the appropriate authorities and there have been serious delays in
large number of cases.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Employees' State Insurance, Sales Tax, Income-tax, Wealth Tax,
Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other
material statutory dues in arrears as at 31 March, 2015 for a period of
more than six months from the date they became payable.
(c) According to the information and explanation given to us, there are
no dues of Income Tax, Sales Tax, Service Tax and Excise Duty, which
have not been deposited with the appropriate tax authorities on account
of any dispute. According to the information and explanations given to
us, the following dues of Customs Duty have not been deposited by the
Company on account of disputes.
Name of the Nature of Amount Period to which Forum where
Statute Dues Rs. the amount dispute is
relates pending
The Custom Customs 4,15,87,220* Financial Year CESTAT -
Act, 1962 Duty 1994-95 Bangalore
*Net of deposit. An amount of Rs 37,00,000 has been paid under protest.
(d) As explained to us, the company did not have any dues on account of
Investor Education and Protection Fund.
(viii) The Company's accumulated losses at the end of the financial
year is less than fifty percent of its networth. The Company has not
incurred cash losses in the current financial year and in the
immediately preceding financial year.
(ix) In our opinion and according to the information and explanations
given to us, the company during the year has delayed repayment of dues
to the bankers and financial institution. Installments amounting to
Rs.1,70,00,000/- and interest amounting to Rs.1,27,00,000/- were due
for payment as at 31st March 2015. (Refer Note 2.3 of the Financial
Statements). The company did not have any outstanding debentures during
the year.
(x) According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks or financial institutions
(xi) In our opinion and according to the information and explanations
given to us, the term loans taken by the Company have been applied for
the purpose for which they were raised.
(xii) During the course of our examination of the books and other
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, no instance of fraud on or by the company
was reported during the year, nor have we been informed of such case by
the Management.
for M.Bhaskara Rao & Co.,
Chartered Accountants
Firm Regn No:000459S
Place: Hyderabad ANIL KUMAR MEHTA
Date: 30th May, 2015 PARTNER
Membership No: 14284
Mar 31, 2014
We have audited the accompanying financial statements of M/s. GAYATRI
BIOORGANICS LIMITED (the com- pany) which comprise the Balance Sheet as
at 31st March, 2014, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of the significant
accounting policies and explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards referred to in Section 211(3C)
of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presenta- tion of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company''s internal control. An audit also includes
evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion.
Basis of qualified opinion
The Company''s trade receivables include certain trade receivables
amounting to Rs. 3,11,63,794/- which are overdue and outstanding for a
period more than one year. The management believes that the same are
fully recoverable as it is in the process of collecting the amounts and
no provisions are required. In the absence of adequate documentation,
we are unable to comment on the timing and the ultimate amount of
collec- tion and its consequential impact on the profit for the year.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effect of the matter described
in the basis for qualified opinion paragraph, the aforesaid financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2014;
(b) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Emphasis of Matter
Without qualifying our opinion, we invite reference to the following:
* Non-availability of confirmation of balances from Sundry Debtors and
creditors
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 as
amended by the Companies (Auditor''s Report) Order, (Amendment) 2004
issued by the Central Government in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matter specified in paragraphs 4 and 5 of the said
Order.
2. As required by Section 227(3) of the Act, we report that:
a) We have 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 appears from our examination of
those books.
c) 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) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the
applicable Accounting Standards referred to in Section 211 (3C) of the
Companies Act, 1956.
e) On the basis of the written representations received from the
directors, as on 31st March, 2014 and taken on record by the Board of
Directors, we report that, none of the Directors of the company is
disqualified as at 31st March, 2014 from being appointed as a director
in terms of clause (g) of sub-section (1) to Section 274 of the
Companies Act, 1956.
STATEMENT REFERRED TO IN PARAGRAPH (1) OF OUR REPORT OF EVEN DATE
1. a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) The management has conducted physical verification of major fixed
assets during the year and as explained to us, no material
discrepancies have been noticed on such verification.
c) According to the information and explanations given to us, the
Company has not disposed of a substan- tial part of its fixed assets
during the year as to affect the going concern assumption in preparing
the financial statements under report.
2. a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physi- cal verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) The company is maintaining proper records for inventories and, based
on the information and explana- tions given to us discrepancies noticed
on physical verification have been properly dealt with in the books of
account.
3. a) According to the information and explanations given to us, the
Company has not granted any unsecured loans to Companies, parties
covered in the register maintained under Section 301 of the Compa- nies
Act, 1956. Accordingly, sub clauses b, c, d of Clause 3 of this Order
is not applicable to the Company for the current year.
b) According to the information and explanations given to us, the
Company has taken unsecured loans from Companies, parties covered in
the register maintained under Section 301 of the Companies Act, 1956.
The number of parties involved are three and maximum aggregate amount
during the year is Rs. 26,80,53,020/- and the year end balance of the
aggregate amount of loan taken is Rs.19,46,02,362/-.
c) In our opinion the rate of interest and other terms and conditions
of loans taken by the company from companies, firms or other parties
listed in the register maintained under Section 301 of the Companies
Act, 1956 are not prima facie prejudicial to the interest of the
company.
d) In the case of loans taken from two Companies and a person listed in
the Register maintained under Section 301 of the Companies Act, 1956,
there are no fixed terms of repayment and due date for payment of
interest and accordingly clause 4(iii)(h) of the Order is not
applicable.
4. In our opinion and according to the information and explanations
given to us, and having regard to the explanation that purchases of
certain items of inventories and fixed assets are for the Company''s
specialized requirements and similarly certain goods sold are for the
specialized requirements of the buyers and suitable alternate sources
are not available to obtain comparative quotations, there are adequate
internal control systems commensurate with the size of the Company and
nature of its business for the purchase of inventories and fixed assets
and for the sale of goods. However, in respect of sale of by-products
and sale of maize (traded) during the year, internal controls need to
be further strengthened. According to the information and explanations
given to us, The Management has initiated steps to introduce the
required additional controls relating to the same.
5. a In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in Section 301 of the Companies Act, 1956 have been entered in to the
register required to be maintained under that Section.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of Contracts and
arrangements entered in the Register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rs.5,00,000 with any
party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at relevant time.
6. The Company has not accepted any deposits from the Public.
7. During the year under report, the Internal Audit of the Company has
been conducted by a firm of Chartered Accountants In our opinion, the
scope and coverage of Internal audit is commensurate with the size and
nature of its business.
8. We have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records prescribed under Section 209(1)(d) of the
Companies Act, 1956, and we are of the opinion that, prima facie, the
prescribed accounts and records have been made and maintained. However,
we have not made a detailed examination of the records.
9. In respect of Statutory Dues
a. According to the information and explanations given to us and on
the basis of examination of records of the Company, amounts deducted
/accrued in the books of accounts in respect of undisputed statutory
dues including for Provident Fund, , Employees State Insurance, Income
Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty and other
material statutory dues have not been regularly deposited with the
appropriate authorities and there have been serious delays in large
number of cases. As explained to us, the company did not have any dues
on account of Investor Education and Protection Fund and Wealth Tax..
b. According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Employees
State Insurance, Income Tax, Sales Tax, Service Tax, Custom Duty,
Excise Duty and other material statutory dues that were in arrears, as
at 31st March 2014 for a period of more than six months from the date
they became payable.
c. According to the information and explanation given to us, there are
no dues of Income Tax, Sales Tax, Service Tax and Excise Duty, which
have not been deposited with the appropriate tax authorities on account
of any dispute. According to the information and explanations given to
us, the following dues of Customs Duty have not been deposited by the
Company on account of disputes.
Name of the Nature of Amount Period to which Forum where
Statute Dues Rs. the amount dispute is
relates pending
The Custom Customs 8,31,74, Financial Year CESTAT -
Act, 1962 Duty -440* 1994-95 Bangalore
*Net of deposit. An amount of Rs 37,00,000 has been paid under protest.
10. The company has accumulated losses at the end of the financial
year which exceeds fifty percent of its net worth. The Company has not
incurred cash losses in the current financial year and in the
immediately preceding financial year.
11. In our opinion and according to the information and explanations
given to us, the company during the year has defaulted /delayed in
repayment of dues to the bankers and financial institution.
Installments amount- ing to Rs.59,95,418/-, were overdue for repayment
as at 31st March 2014 and the same were paid in April 2014. (Refer Note
2.3 of the Financial Statements). The company did not have any
outstanding debentures during the year.
12. According to the information and explanations given to us, the
company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
13. According to information and explanations given to us, the Company
is not a Chit fund / Nidhi / Mutual Benefit Fund / Society.
14. In our opinion and according to the information and explanations
given to us, the company is not dealing in or trading in shares,
securities, debentures and other investments.
15. According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks or financial institutions
16. In our opinion and according to the information and explanations
given to us, the term loans taken by the Company have been applied for
the purpose for which they were raised.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that the funds raised on short term basis have not been
used for long term investment.
18. During the year under report, the company has not made any
preferential allotment of shares to the parties and companies covered
in the register maintained under Section 301 of the Companies Act,
1956.
19. The company has not issued any debentures.
20. The company has not raised any money by way of public issues
during the year.
21. During the course of our examination of the books and other
records of the Company carried out in accor- dance with the Generally
Accepted auditing practices in India and according to the information
and explana- tions given to us, no instance of fraud on or by the
company was reported during the year, nor have we been informed of such
case by the Management.
for M.Bhaskara Rao & Co.
Chartered Accountants
Firm Regn No:000459S
Place: Hyderabad ANIL KUMAR MEHTA
Date: May 28, 2014 PARTNER
Membership No: 14284
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Gayatri
Bioorganics Limited (''the Company''), which comprise the Balance
Sheet as at 31 March 2013, the Statement of Profit and Loss and the
Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of Section 211
of the Companies Act, 1956 ("the Act"). This responsibility
includes the design, implementation and maintenance of internal
controls 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.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment
of the risks of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, the
auditor considers internal controls relevant to the Company''s
preparation and fair presentation of the financial statements in order
to design audit procedures that are appropriate in the circumstances.
An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of the accounting estimates made
by Management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion.
Basis of qualified opinion
The Company''s trade receivables includes certain trade receivables
amounting to INR 58,130,503 which are overdue and outstanding for a
period of more than one year. The Management believes that the same are
fully recoverable as it is in the process of collecting the amounts and
no provisions are required. In the absence of adequate documentation,
we are unable to comment on the timing and the ultimate amount of
collection and its consequential impact on the profit for the year.
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 paragraph, the financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 March 2013;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003
("the Order"), as amended, issued by the Central Government of
India in terms of sub-section (4A) of Section 227 of the Act, we give
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
a) we have 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 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 Balance Sheet, the Statement of Profit and Loss,
and the Cash Flow Statement comply with the Accounting Standards
referred to in sub-section (3C) of Section 211 of the Act, to the
extent applicable;
e) on the basis of written representations received from the directors
as on 31 March 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31 March 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Act.
The Annexure referred to in the Auditors'' Report to the Members of
Gayatri BioOrganics Limited ("the Company") for the year ended 31
March 2013. 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 by which all fixed assets are verified over a period of
three years. In our opinion, this periodicity of physical verification
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) The Company has not disposed off any of its fixed assets during the
year. Thus, paragraph 4(i)(c) of the order is not applicable.
ii) a) The inventory, except stocks lying with the third party has been
physically verified by the management during the year. In our opinion,
the frequency of such verification is reasonable. For stocks lying with
the third party at the year-end, written confirmations have been
obtained.
b) The procedures for the physical verification of inventories followed
by the management are reasonable and adequate in relation to the size
of the Company and the nature of its business.
c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
book records were not material.
iii) a) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956 ("the Act"). Hence
clause 4 (iii) (a), (b), (c) and (d) of the Order is not applicable.
e) The Company has taken loan from two companies and a person covered
in the Register maintained under Section 301 of the Act. The maximum
amount outstanding during the year including interest was INR
126,281,832 and the year-end balance of such loan including interest
was INR 125,415,775. The Company has not taken any loan, secured or
unsecured, from any other companies, firms or other parties covered
under Section 301 of the Act.
f) In our opinion, the rate of interest and other terms and conditions
on which loans have been taken from companies and a person listed in
the Register maintained under Section 301 of the Act are not, prima
facie, prejudicial to the interest of the Company.
g) In the case of loans taken from two companies and a person listed in
the Register maintained under Section 301, there are no fixed terms for
repayment of the principal amount and due date for payment of interest
and accordingly clause 4(iii)(g) of the Order is not applicable.
iv) In our opinion and according to the information and explanations
given to us, and having regard to the explanation that purchases of
certain items of inventories and fixed assets are for the Company''s
specialized requirements and similarly certain goods sold are for the
specialized requirements of the buyers and suitable alternative sources
are not available to obtain comparable quotations, there is an adequate
internal control system commensurate with the size of the Company and
the nature of its business with regard to purchase of inventories and
fixed assets and with regard to sale of goods. In respect of sale of
certain by-products during the year, internal controls need to be
further strengthened. According to the information and explanations
given to us, the Management has initiated steps to introduce the
required additional controls relating to sale of by-products.
v) a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in Section 301 of the Act have been entered in the Register required to
be maintained under that Section.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts and
arrangements entered in the Register maintained under Section 301 of
the Act and exceeding the value of rupees five lakhs with any party
during the year have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
vi) The Company has not accepted any deposits from the public.
vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules prescribed by the Central Government for
the maintenance of cost records under section 209(1)(d) of the Act and
are of the opinion that prima facie, the prescribed accounts and
records have been made and maintained. However, we have not made a
detailed examination of the records.
ix) a) According to the information and explanations given to us and on
the basis of examination of the records of the Company, amounts
deducted/accrued in the books of accounts in respect of undisputed
statutory dues including for Provident fund, Employees State Insurance,
Income- Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty and
other material statutory dues have not been regularly deposited with
the appropriate authorities and there have been serious delays in a
large number of cases. As explained to us, the Company did not have any
dues on account of Investor Education and Protection Fund and Wealth
Tax.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Employees''
State Insurance, Income Tax, Sales Tax, Service Tax, Customs duty,
Excise duty and other material statutory dues that were in arrears as
at 31 March 2013 for a period of more than six months from the date
they became payable.
c) According to the information and explanations given to us, there are
no dues of Income Tax, Sales Tax, Service Tax and Excise Duty, which
have not been deposited with the appropriate tax authorities on account
of any dispute. According to the information and explanations given to
us, the following dues of customs duty have not been deposited by the
Company on account of disputes:
Name of
the statute Nature of Amount in Rs. Period to
which Forum where
the dues the amount the
relates dispute is
pending
The Custom
Act, Customs
duty 83,174,440* Financial
year CESTAT-
1962 1994-95 Bangalore
* Net deposits. An amount of INR 3,700,000 has been paid under protest.
x) The Company has accumulated losses at the end of the financial year
which exceeds fifty per cent of its net worth. The Company has not
incurred cash losses in the current financial year and in the
immediately preceding financial year.
xi) In our opinion and according to the information and explanations
given to us, the Company has defaulted/ delayed in repayment of dues to
the bankers and financial institution. Refer appendix I for the period
and amount of defaults. The Company did not have any outstanding
debentures during the year.
xii) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
xiii) In our opinion, and according to the information and explanations
given to us, the Company is not a chit fund/ nidhi/ mutual benefit
fund/ society.
xiv) According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities or debentures
and other investments.
xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
xvi) In our opinion and according to the information and explanations
given to us, the term loans taken by the Company have been applied for
the purpose for which they were raised.
xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we are of
the opinion that the funds raised on short-term basis have not been
used for longterm investment.
xviii) The Company has not made any preferential allotment of shares to
parties covered in the Register maintained under Section 301 of the
Act.
xix) The Company did not have any outstanding debentures during the
year.
xx) The Company has not raised any money by public issues during the
year.
xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
for B S R and Co.
Chartered Accountants
Firm''s Registration No: 128510W
Zubin Shekary
Place : Hyderabad Partner
Date : 28 May, 2013 Membership No: 48814
Mar 31, 2012
We have audited the attached balance sheet of Gayatri BioOrganics
Limited ("the Company") as at 31 March 2012, the Statement of
Profit and Loss and the Cash Flow Statement for the year ended on that
date, annexed thereto. These financial statements are the
responsibility of the Company's Management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Companies (Auditor's Report) Order, 2003 ("the
Order"), as amended, issued by the Ministry of Corporate Affairs in
terms of sub-section (4A) of Section 227 of the Companies Act 1956,
("the Act") we enclose in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
a) we have 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 appears from our examination of those
books;
c) the Balance Sheet, 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 Balance Sheet, Statement of Profit and Loss and
the Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Act;
e) on the basis of written representations received from the directors,
as on 31 March 2012, and taken on record by the Board of Directors, we
report that none of the Directors are disqualified as on 31 March 2012
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act; and
f) in our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Act, in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 March 2012;
ii) in the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS' REPORT
The Annexure referred to in the Auditors' Report to the Members of
Gayatri BioOrganics Limited ("the Company") for the year ended 31
March 2012. 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 by which all fixed assets are verified over a period of
three years. In our opinion, this periodicity of physical verification
is reasonable having regard to the size of the Company and the nature
of its assets. In accordance with this programme, certain fixed assets
were verified during the year and no material discrepancies were noted
on such verification.
c) Fixed assets disposed of during the year were not substantial, and
therefore, do not affect the going concern assumption.
ii) a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of verification is
reasonable. For stocks lying with the third parties at the year-end,
written confirmations have been obtained.
b) The procedures for the physical verification of inventories followed
by the management are reasonable and adequate in relation to the size
of the Company and the nature of its business.
c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
book records were not material.
iii) a) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956 ("the Act"). Hence
clause 4 (iii) (a), (b), (c) and (d) of the Order is not applicable.
b) The Company has taken loan from a person covered in the register
maintained under Section 301 of the Act. The maximum amount outstanding
during the year including interest was Rs. 14,628,646 and the year end
balance of such loans including interest was Rs. 14,628,646. The
Company has not taken any loan, secured or unsecured, from companies or
firms covered under Section 301 of the Companies Act, 1956.
c) In our opinion, the rate of interest and other terms and conditions
on which loans have been taken from other parties listed in the
register maintained under section 301 of the Act are not, prima facie,
prejudicial to the interest of the Company.
d) In the case of loans taken from a person listed in the register
maintained under section 301, there are no fixed terms for repayment of
the principal amount and payment of interest and accordingly clause
4(iii)(g) of the Order is not applicable.
iv) In our opinion, and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to the purchase of inventories and fixed assets and with regard to the
sale of goods. The Company is not engaged in any sale of services. We
have not observed any major weakness in the internal control system
during the course of our audit.
v) a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in Section 301 of the Act have been entered in the register required to
be maintained under that Section.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts and
arrangements entered in the register maintained under Section 301 of
the Act and exceeding the value of rupees five lakhs with any party
during the year have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
vi) The Company has not accepted any deposits from the public.
vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules prescribed by the Central Government for
the maintenance of cost records under section 209(1) (d) of the
Companies Act, 1956 and are of the opinion that prima facie, the
prescribed accounts and records have been made and maintained. However,
we have not made a detailed examination of the records.
ix) a) According to the information and explanations given to us and on
the basis of examination of the records of the Company, amounts
deducted/accrued in the books of accounts in respect of undisputed
statutory dues in respect of other material statutory dues have been
regularly deposited with appropriate authorities except for Provident
fund, Employees State Insurance, Income Tax, Service Tax, Sales Tax and
Excise Duty where there have been slight delays. As explained to us,
the provisions of Investor Education and Protection fund and Wealth tax
are not applicable to the Company.
According to the information and explanations given to us, there are no
undisputed amounts payable in respect of Provident Fund, Employees'
state insurance, Income tax, Customs duty, Excise duty, Cess and other
material statutory dues that were in arrears as at 31 March 2012 for a
period of more than six months from the date they became payable.
b) According to the information and explanations given to us, there are
no dues of Income tax, Sales tax, Excise duty and Cess which have not
been deposited with the appropriate tax authorities on account of any
dispute. According to the information and explanations given to us, the
following dues of customs duty have not been deposited by the Company
on account of disputes:
Name of the
statute Nature of Amount in Rs. Period to
which Forum where the
the dues the amount
relates dispute is
pending
The Custom
Act, Customs duty 83,174,440* Financial
year CESTAT-
1962 1994-95 Bangalore
* Out of the above amount Rs. 3,700,000 has been paid under protest.
x) The Company has accumulated losses at the end of the financial year
which exceeds fifty per cent of its net worth. The Company has not
incurred cash losses in the current financial year and in the
immediately preceding financial year.
xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to its
bankers and to any financial institutions during the year. The Company
did not have any outstanding debentures during the year.
xii) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
xiii) In our opinion, and according to the information and explanations
given to us, the Company is not a chit fund/ nidhi / mutual benefit
fund / society.
xiv) According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities or debentures
and other investments.
xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
xvi) In our opinion and according to the information and explanations
given to us, the term loans taken by the Company have been applied for
the purpose for which they were raised.
xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we are of
the opinion that the funds raised on short-term basis have not been
used for long-term investment.
xviii) According to the information and explanation given to us, the
Company has not made any preferential allotment of shares to parties
covered in the register maintained under section 301 of the Act.
xix) The Company did not have any outstanding debentures during the
year.
xx) The Company has not raised any money by public issues.
xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
for B S R and Co.
Chartered Accountants
Firm's Registration No: 128510W
Zubin Shekary
Partner
Membership No: 48814
Place : Hyderabad
Date : 30 May, 2012
Mar 31, 2011
1 We have audited the attached balance sheet of Gayatri BioOrganics
Limited ("the Company") as at 31 March 2011, the profit and loss
account and the cash flow statement for the year ended on that date,
annexed thereto. These financial statements are the responsibility of
the Company's Management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2 We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3 As required by the Companies (Auditor's Report) Order, 2003 ('the
Order'), as amended, issued by the Ministry of Corporate Affairs in
terms of sub-section (4A) of Section 227 of the Companies Act 1956,
(the Act) we enclose in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
4 Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(i) we have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) in our opinion, proper books of account as required by law have
been kept by the Company, so far as appears from our examination of
those books;
(iii) the balance sheet, profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
account;
(iv) in our opinion, the balance sheet, profit and loss account and
cash flow statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Act;
(v) on the basis of written representations received from the
directors, as on 31 March 2011, and taken on record by the Board of
Directors, we report that none of the Directors are disqualified as on
31 March 2011 from being appointed as a director in terms of clause (g)
of sub-section (1) of Section 274 of the Act; and Gayatri BioOrganics
Limited
(vi) in our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Act, in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
a. in the case of the balance sheet, of the state of affairs of the
Company as at 31 March 2011;
b. in the case of the profit and loss account, of the profit for the
year ended on that date; and
c. in the case of cash flow statement, of the cash flows for the year
ended on that date.
ANNEXURE TO THE AUDITORS' REPORT
Annexure referred to in paragraph 3 of our report of even date to the
members of Gayatri BioOrganics Limited ("the Company") for the year
ended 31 March 2011. 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 by which all fixed assets are verified over a period of
three years. In our opinion, this periodicity of physical verification
is reasonable having regard to the size of the Company and the nature
of its assets. In accordance with this programme, certain fixed assets
were verified during the year and no material discrepancies were noted
on such verification.
c) Fixed assets disposed of during the year were not substantial, and
therefore, do not affect the going concern assumption.
ii) a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of verification is
reasonable. For stocks lying with the third parties at the year-end,
written confirmations have been obtained.
b) The procedures for the physical verification of inventories followed
by the management are reasonable and adequate in relation to the size
of the Company and the nature of its business.
c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
book records were not material.
iii) a) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956 (the Act). Hence clause 4
(iii) (a), (b), (c) and (d) of the Order is not applicable.
b) The Company has taken loan from a person covered in the register
maintained under section 301 of the Act. The maximum amount outstanding
during the year was Rs. 33,884,425 and the year end balance of such
loans was Rs. 14,305,737.
c) In our opinion, the rate of interest and other terms and conditions
on which loans have been taken from other parties listed in the
register maintained under section 301 of the Act are not, prima facie,
prejudicial to the interest of the Company.
d) In the case of loans taken from a person listed in the register
maintained under section 301, there are no fixed terms for repayment of
the principal amount and payment of interest and accordingly clause
4(iii)(g) of the Order is not applicable.
iv) In our opinion, and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to the purchase of inventories and fixed assets and with regard to the
sale of goods. The Company is not engaged in any sale of services. We
have not observed any major weakness in the internal control system
during the course of our audit.
v) a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in Section 301 of the Act have been entered in the register required to
be maintained under that Section.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts and
arrangements entered in the register maintained under section 301 of
the Act and exceeding the value of rupees five lakhs with any party
during the year have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
vi) The Company has not accepted any deposits from the public.
vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii) We have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules prescribed by the Central Government for
the maintenance of cost records under section 209(1) (d) of the
Companies Act, 1956 and are of the opinion that prima facie, the
prescribed accounts and records have been made and maintained. However,
we have not made a detailed examination of the records.
ix) a) According to the information and explanations given to us and on
the basis of examination of the records of the Company, amounts
deducted/accrued in the books of accounts in respect of undisputed
statutory dues in respect of Income tax, Excise duty, Custom duty and
other material statutory dues have been regularly deposited with
appropriate authorities except for Provident fund, Employees State
Insurance and Sales tax where there have been slight delays. As
explained to us, the provisions of Investor Education and Protection
fund and Wealth tax are not applicable to the Company.
Further, there were no dues on account of Cess under Section 441A of
the Act, since the date from which the aforesaid section comes into
force has not been notified by the Central Government.
According to the information and explanations given to us, except for
undisputed amount payable in respect of service tax (Rs 86,267) which
is outstanding for more than six months, there are no undisputed
amounts payable in respect of Provident Fund, Employees' state
insurance, Income tax, Customs duty, Excise duty, Cess and other
material statutory dues that were in arrears as at 31 March 2011 for a
period of more than six months from the date they became payable.
b) According to the information and explanations given to us, there are
no dues of Income tax, Sales tax, Excise duty and Cess which have not
been deposited with the appropriate tax authorities on account of any
dispute. According to the information and explanations given to us, the
following dues of customs duty have not been deposited by the Company
on account of disputes:
Name of the Nature of Amount in Rs. Period to which Forum where
dispute
statute the dues 2010-2011 the amount
relates is pending
The Custom Customs duty 79,512,120* Financial year CESTAT-
Act, 1962 1994-95 Bangalore
* Rs. Out of the above amount Rs. 3,700,000 has been paid under
protest.
x) The Company has accumulated losses at the end of the financial year
which exceeds fifty per cent of its net worth. The Company has not
incurred cash losses in the current financial year and in the
immediately preceding financial year.
xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to its
bankers and to any financial institutions during the year. The Company
did not have any outstanding debentures during the year.
xii) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
xiii) In our opinion, and according to the information and explanations
given to us, the Company is not a chit fund / nidhi / mutual benefit
fund / society.
xiv) According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities or debentures
and other investments.
xv) 1. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
xvi) 2. In our opinion and according to the information and
explanations given to us, the term loans taken by the Company have been
applied for the purpose for which they were raised.
xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we are of
the opinion that the funds raised on short-term basis have not been
used for long-term investment.
xviii) According to the information and explanation given to us, the
Company has made preferential allotment of shares to parties covered in
the register maintained under section 301 of the Act. In our opinion,
the price at which shares have been issued is not prejudicial to the
interest of the company
xix) The Company did not have any outstanding debentures during the
year.
xx) The Company has not raised any money by public issues.
xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
for B S R and Co
Chartered Accountants
Firm Registration No.: 128510W
Sd/-
Zubin Shekary
Place : Hyderabad Partner
Date : 28 May 2011 Membership No: 48814
Mar 31, 2010
1 We have audited the attached balance sheet of Gayatri BioOrganics
Limited ("the Company") as at 31 March 2010, the profit and loss
account and the cash flow statement for the year ended on that date,
annexed thereto. These financial statements are the responsibility of
the Companys management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2 We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3 As required by the Companies (Auditors Report) Order, 2003 ("the
Order"), as amended, issued by the Central Government of India in terms
of sub-section (4A) of section 227 of the Companies Act, 1956, we
enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4 Without qualifying our opinion, we draw attention to Note 4 of
Schedule 21 in the financial statements. Notwithstanding the profits
made during the year ended 31 March 2010, the Company has accumulated
losses from the previous years which have exceeded its equity share
capital. These factors along with other matters as set forth in Note 4
of Schedule 21 prima facie raises doubt about the Companys ability to
continue as a going concern. However, the mitigating factors,
particularly the ongoing implementation of Rehabilitation Scheme,
sanctioned by the Board of Industrial and Financial Reconstruction
(BIFR), cause us to believe that the going concern assumption is
appropriate.
5 Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(i) we have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) in our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(iii) the balance sheet, profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
account;
(iv) in our opinion, the balance sheet, profit and loss account and
cash flow statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956;
(v) on the basis of written representations received from the
directors, as on 31 March 2010, and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31 March 2010 from being appointed as a Director in terms of clause (g)
of sub-section (1) of section 274 of the Companies Act, 1956;
(vi) in our opinion and to the best of our information and according to
the explanations given to us, the said . accounts give the information
required by the Companies Act, 1956 in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
a. in the case of the balance sheet, of the state of affairs of the
Company as at 31 March 2010;
b. in the case of the profit and loss account, of the profit for the
year ended on that date; and
c. in the case of cash flow statement, of the cash flows for the year
ended on that date.
ANNEXURE TO THE AUDITORS REPORT
Annexure referred to in paragraph 3 of our report of even date to the
members of Gayatri BioOrganics Limited:
1. The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
2. The Company has a regular programme of physical verification of its
fixed assets by which all fixed assets are verified over a period of
three years. In our opinion, the periodicity of physical verification
is reasonable having regard to the size of the Company and the nature
of its assets. In accordance with this programme, certain fixed assets
were verified during the year and no material discrepancies were noted
on such verification.
3. Fixed assets disposed of during the year were not substantial, and
therefore, do not affect the going concern assumption.
4. The inventory has been physically verified by the management during
the year. In our opinion, the frequency of verification is reasonable.
For stocks lying with the third parties at the year-end, written
confirmations have been obtained.
5. The procedures for the physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
6. The Company is maintaining proper records of inventory. The
discrepancies noticed on verificati6n between the physical stocks and
book records were not of material.
7. The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956.
8. The Company has taken loans from a person covered in the register
maintained under section 301 of the Companies Act, 1956. The maximum
amount outstanding during the year was Rs.37,845,064 and the year end
balance of such loans was Rs.33,636,040.
9. In our opinion, the rate of interest and other terms and conditions
on which loans have been taken from other parties listed in the
register maintained under section 301 of the Companies Act, 1956 are
not, prima facie, prejudicial to the interest of the Company.
10. In the case of loans taken from a person listed in the register
maintained under section 301, there are no fixed terms for repayment of
the principal amount and payment of interest and accordingly clause
4(iii)(g) of the Order is not applicable.
11. In our opinion, and according to the information and explanations
given to us. there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to the purchase of inventories and fixed assets and with regard to the
sale of goods. The Company is not engaged in any sale of services. We
have not observed any major weakness in the internal control system
during the course of our audit.
12. In our opinion and according to the information and explanations
given to us, the partic dars of contracts or arrangements referred to
in section 301 of the Companies Act, 1956 have been entered in the
register required to be maintained under that section. In our opinion
and according to the infomlation and explanations given to us. the
transactions made in pursuance of contracts and arrangements entered in
the register maintained under section 301 of the Companies Act, 1956
and exceeding the value of rupees five lakhs with any party during the
year have been made at prices which are reasonable having regard to the
prevailing market prices at the relevant time.
13. The Company has not accepted any deposits from the public.
14. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
15. We have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules prescribed by the Central Government for
the maintenance of cost records under section 209(1) (d) of the
Companies Act, 1956 and are of the opinion that prima facie, the
prescribed accounts and records have been made and maintained. However,
we have not made a detailed examination of the records.
16. According to the information and explanations given to us and on
the basis of examination of the records of the Company, the Company has
not been regular in depositing amount deducted/accrued in the books of
accounts with the appropriate authorities in respect of prouident fund,
employees state insurance and sales-tax. According to the information
and explanations given to us and on the basis of our examination of the
books of account, amounts deducted / accrued in the books of account in
respect of undisputed statutory dues including excise duty, income-tax,
service tax, customs duty and other material statutory dues, have been
regularly deposited during the year by the Company with the appropriate
authorities. As explained to us, the provisions of investor education
and protection fund and wealth tax are not applicable to the Company.
Further, there were no dues on account of Cess under Section 441A of
the Act, since the date from which the aforesaid section comes into
force has not been notified by the Central Government.
According to the information and explanations given to us, except for
undisputed amount payable in respect of service tax (Rs 86,267) which
is outstanding for more than six months, there are no undisputed
amounts payable in respect of provident fund, employees state
insurance, income tax, service tax, customs duty, excise duty, cess and
other material statutory dues that were in arrears as at 31 March 2010
for a period of more than six months from the date they became payable.
17. According to the information and explanations given to us, there
are no dues of income tax, service tax, excise duty and cess which have
not been deposited with the appropriate authorities on account of any
dispute. According to the information and explanations given to us, the
following dues of sales-tax and customs duty have not been deposited by
the Company on account of disputes:
Name of the
statute Nature of Amount in Rs. Period to
which Forum where
the
the dues 2009-2010 the amount
relates dispute is
pending
The Central
Excise Customs duty* 75,949,800 Financial
year CESTAT-
Act, 1944 1994-95 Bangalore
* Rs. 3,700,000 paid under protest.
18. The Company has accumulated losses at the end of the financial year
which exceeds fifty per cent of its net worth. The Company has not
incurred cash losses in the current financial year, however it has
incurred cash losses in the immediately preceding financial year.
19. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to its
bankers and to any financial institutions during the year.
20. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
21. In our opinion, and according to the information and explanations
given to us, the Company is not a chit fund or a nidhi/ mutual benefit
fund/ society.
22. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments.
23. According to the information and explanations given to us, the
Company has not given any guarantee for loans take 1 by others from
banks or financial institutions.
24. According to the information and explanation given to us, the term
loans taken by the Company have been applied for the purpose for which
they were raised.
25. According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
26. According to the information and explanation given to us, the
company has not made any preferential allotment of shares to
companies/firms/parties covered in the register maintained under
section 301 of the Companies Act, 1956.
27. The Company did not have any outstanding debentures during the
year.
28. The Company has not raised any money by public issues during the
year.
29. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
for B S R and Associates
Chartered Accountants
Firm Registration no: 128901W
Zubin Shekary
Partner
Membership No: 48814
Place : Hyderabad
Date : 12 May 2010