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Advanced Enzyme Technologies Ltd.

BSE: 540025 Sector: Industrials
NSE: ADVENZYMES ISIN Code: INE837H01020
BSE 00:00 | 24 Apr 2020 Advanced Enzyme Technologies Ltd
NSE 05:30 | 01 Jan 1970 Advanced Enzyme Technologies Ltd

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OPEN 147.30
PREVIOUS CLOSE 143.85
VOLUME 4459
52-Week high 225.00
52-Week low 91.05
P/E 30.68
Mkt Cap.(Rs cr) 1,569
Buy Price 140.00
Buy Qty 58.00
Sell Price 142.80
Sell Qty 50.00
OPEN 147.30
CLOSE 143.85
VOLUME 4459
52-Week high 225.00
52-Week low 91.05
P/E 30.68
Mkt Cap.(Rs cr) 1,569
Buy Price 140.00
Buy Qty 58.00
Sell Price 142.80
Sell Qty 50.00

Advanced Enzyme Technologies Ltd. (ADVENZYMES) - Auditors Report


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Company auditors report

To the Members of Advanced Enzyme Technologies Limited Report on theAudit of the Standalone Financial Statements Opinion

We have audited the standalone financial statements of Advanced EnzymeTechnologies Limited ("the Company") which comprise the standalone balancesheet as at 31 March

2019 and the standalone statement of profit and loss (including othercomprehensive income) standalone statement of changes in equity and standalone statementof cash flows for the year then ended and notes to the standalone financial statementsincluding a summary of the significant accounting policies and other explanatoryinformation.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the standalone state of affairs of the Company as at

31 March 2019 and standalone profit and other income standalonechanges in equity and its standalone cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on

Auditing (SAs) specifiedunder Section 143(10) of the Act. Ourresponsibilities under those SAs are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the standalone financial and the Rules thereunder andwe have fulfilled responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

Description of Key Audit Matter

Revenue Recognition
The key audit matter How the matter was addressed in our audit
Revenue is recognised when the control of the products being sold has transferred to the customer. Therefore there is a risk of revenue being overstated on account of variation in the timing of transfer of control due to the pressure management may feel to achieve performance targets at the reporting period end. In view of the significance of the matter we applied following procedures:
Assessed appropriateness of the Company's revenue recognition accounting policies including those relating to anticipated sales returns by comparing with applicable accounting standards.
Refer note 4 (a) to the standalone financial statements for details on accounting policy on revenue recognition. Assessed and tested design implementation and operating effectiveness of the Company's general IT controls and key IT/ manual application controls over the Company's systems which govern recording of revenue creation of new customers revenue cut-off and sales return accruals in the general ledger accounting system.
• Performed substantive testing (including year-end cut-off testing) by selecting samples of revenue transactions recorded during the year including one off sales to customers by verifying the underlying documents which included sales invoices/contracts and shipping documents.
• We assessed manual journals posted to revenue to identify unusual items and considered adequacy of disclosures in respect of revenue.

Other Information

The Company's management and Board of Directors are responsiblefor the other information. The other information comprises the information included in theCompany's Annual Report but does not include the financial statements and ourAuditors' report thereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

Management's Responsibility for the Standalone FinancialStatements

The Company's management and Board of Directors are responsiblefor the matters stated in Section 134(5) of the Act with respect to the preparation ofthese standalone financial statements that give a true and fair view of the state ofaffairs profit and other comprehensive income changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian

Accounting Standards (Ind AS) specified under Section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management and Boardof Directors are responsible for assessing the Company's ability to continue as agoing concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast theCompany's ability to continue as a significant going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the standalone financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditors' report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors' Report) Order 2016("the Order") issued by the Central Government in terms of section 143 (11) ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.

(A) As required by Section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

c) The standalone balance sheet the standalone statement of profit andloss (including other comprehensive income) the standalone statement of changes in equityand the standalone statement of cash flows dealt with by this Report are in agreement withthe books of account.

d) In our opinion the aforesaid standalone financial statements complywith the Ind AS specified under section 133 of the Act.

e) On the basis of the written representations received from thedirectors as on 31 March 2019 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2019 from being appointed as a director in termsof Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls withreference to standalone financial statements of the Company and the operatingeffectiveness of such controls refer to our separate

Report in "Annexure B".

(B) With respect to the other matters to be included in theAuditors' 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 theexplanations given to us:

i. The Company has disclosed the impact of pending litigations as at 31March 2019 on its financial position in its standalone financial statements - Refer Note50 to the standalone financial statements;

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company; and

iv. The disclosures in the standalone financial statements regardingholdings as well as dealings in specified bank notes during the period from 8 November2016 to 30 December 2016 have not been made in these financial statements since they donot pertain to the financial year ended 31 March 2019.

(C) With respect to the matter to be included in the Auditors'Report under Section 197(16):

In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its Directors during the current year is inaccordance with the provisions of Section 197 of the Act. The remuneration paid to anyDirector is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under

Section 197(16) which are required to be commented upon by us.

For B S R & Co. LLP

Chartered Accountants

Firm's Registration No: 101248W/W-100022

Sadashiv Shetty

Partner

Membership No. 048648

Place : Mumbai

Date : 24 May 2019

Annexure A to the Independent Auditors' Report - 31 March 2019

With reference to the Annexure A referred to in the IndependentAuditors' Report to the members of the Company on the standalone financial statementsfor the year ended 31

2019 we report the following:

(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and fix assets. Situation of

(b) The Company has a regular programme of physical the fixed assetsverification are verified by the management according to a phased programme designed tocover all the items over a period of three years. In our opinion this periodicity ofphysical verification is reasonable having regard to the size of the Company and thenature of its assets. In accordance with the programme the Company has physicallyverified certain fixed assets during the year. The discrepancies noticed on suchverification were not material and have been appropriately dealt with in the books ofaccount.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties as disclosed in Note 5 to the standalone financial statements are held in thename of the Company except in respect of the lease for the Company's land at JalnaMaharashtra with Maharashtra Industrial Development Corporation (gross block: ` 12.57million and net block

` 12.57 million included under Non-current assets held for sale undernote 17 to the standalone financial statements).

(ii) The inventory except for goods in transit and stocks lying withthird parties has been physically verified by the management during the year. In ouropinion the frequency discrepancies of such verification stocks and thenoticed onverification book records were not material and have been adequately dealt with in booksof account.

(iii) According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms limitedliability partnerships or other parties covered in the register maintained under

Section 189 of the Companies Act 2013 (‘the Act').Accordingly paragraphs 3 (iii) (a) and (b) of the Order are not applicable to theCompany.

(iv) In our opinion and according to the information and explanationgiven to us the Company has complied with provisions of Section 185 and 186 of the Act inrespect of grant of loans making investments and providing guarantees and securities asapplicable.

(v) In our opinion and according to the information and explanationsgiven to us the Company has not accepted deposits as per the directives issued by theReserve Bank of India and the provisions of Sections 73 to 76 or any other relevantprovisions of the Act and the rules framed thereunder. Accordingly paragraph 3(v) of theOrder is not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by theCompany pursuant to the rules prescribed by the Central Government for maintenance of costrecords under

Section 148 (1) of the Act and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However we have not made adetailed examination of the records with a view to determine whether they are accurate orcomplete.

(vii) (a) According to the information and explanations given to us andon the basis of our examination of the records of the Company amounts deducted/accrued inthe books of account in respect of undisputed statutory dues including Provident fundEmployees' State Insurance Profession tax Income-tax Sales-tax Goods and Servicestax Service tax Duty of Customs Duty of Excise Value added tax cess and othermaterial statutory dues have been generally regularly deposited during the year by theCompany with the appropriate authorities.

Also refer Note 50

According to the information and explanations given to us noundisputed amounts payable in respect of Provident fund Employees' State InsuranceProfession tax Income-tax Sales-tax Goods and Services tax Service tax Duty ofCustoms Duty of Excise Value added tax cess and other material statutory dues were inarrears as at 31 March 2019 for a period of more than six months from the date they becamepayable.

(b) According to the information and explanations given to us and basedon our examination of the records of the Company there are no dues of Income-tax Salestax Service tax Duty of Customs Duty of Excise and Value added tax as at 31 March 2019which have not been deposited with the appropriate authorities on account of any disputeexcept as stated below:

Name of the statute Nature of dues

Amount

Amount paid under protest

Period to which the amount relates Forum where the dispute is pending

(` in million)

(` in million)

Income Tax Act 1961 Income Tax 0.40 - AY 2004-05 Bombay High Court
Income Tax Act 1961 Income Tax 58.96 45.78 AY 2010-11 Income Tax Appellate Tribunal Mumbai
Income Tax Act 1961 Income Tax 11.84 8.57 AY 2011-12 Income Tax Appellate Tribunal Mumbai
Income Tax Act 1961 Income Tax 53.74 14.41 AY 2012-13 Commissioner Appeals
Income Tax Act 1961 Income Tax 0.18 - AY 2013-14 Commissioner Appeals
Income Tax Act 1961 Income Tax 29.23 5.85 AY 2011-12 Commissioner Appeals
Central Excise Act 1944 read with Cenvat Credit Rules 2004 Service Tax Interest and Penalty 12.51 10.38 July 2010 to January 2015 Customs Excise and Service Tax Appellate Tribunal West Zone
Central Excise Act 1944 read with Cenvat Credit Rules 2004 Excise Duty Interest and Penalty 2.84 - April 2012 to January 2015 Additional Commissioner of Central Excise Customs and Service Tax
Central Excise Act 1944 read with Cenvat Credit Rules 2004 Excise Duty 4.19 - July 2010 to January 2015 Additional Commissioner of Central Excise Customs and Service Tax
Central Excise Act 1944 read with Cenvat Credit Rules 2004 Excise Duty Interest and Penalty 2.79 2.79 July 2011 to January 2015 Commissioner of Central Excise Customs and Service Tax
Central Excise Act 1944 read with Cenvat Credit Rules 2004 Excise Duty Interest and Penalty 0.53 0.53 March 15 to October 15 Customs Excise and Service Tax Appellate Tribunal West Zone
Central Excise Act 1944 read with Cenvat Credit Rules 2004 Service Tax Interest and Penalty 1.37 1.06 March 2015 to December 2015 Customs Excise and Service Tax Appellate Tribunal West Zone
Central Excise Act 1944 read with Cenvat Credit Rules 2004 Excise Duty 0.60 - March 2015 to December 2015 Commissioner of Central Excise Customs and Service Tax
Central Excise Act 1944 read with Cenvat Credit Rules 2004 Excise Duty 2.11 - January 2016 to June 2017 Commissioner of GST Central Excise Customs and Service Tax

(viii) In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in repayment of loans or borrowings to banksand government.

The Company does not have any loans or borrowings from financialinstitutions or dues to debenture holders during the year.

(ix) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not raised anymoneys by way of initial public offer or further public offer (including debt instruments)and has not obtained any term loans during the year. Accordingly paragraph 3(ix) of theOrder is not applicable to the Company.

(x) During the course of our examination of the books and records ofthe Company carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of material fraud by the Company or on the Company by its officers oremployees noticed or reported during the year nor have we been informed of any such caseby the Management.

(xi) In our opinion and according to the information and explanationsgiven to us the managerial remuneration has been paid or provided in accordance with therequisite approvals mandated by the provisions of Section 197 of the

Act read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi company and the Nidhi Rules 2014 are notapplicable to it.

Accordingly paragraph 3(xii) of the Order is not applicable to theCompany.

(xiii) In our opinion and according to the information and explanationsgiven to us the Company has entered into transactions with related parties in compliancewith the provisions of Sections 177 and 188 of the Act where applicable and the detailsof such related party transactions have been disclosed in the standalone financialstatements as required by the applicable Indian Accounting Standards.

(xiv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly paragraph 3(xiv) of the Order is not applicableto the Company.

(xv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not entered intoany non-cash transactions with directors or persons connected with them.

Accordingly paragraph 3(xv) of the Order is not applicable to theCompany.

(xvi) In our opinion and according to the information and explanationsgiven to us the Company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934. Accordingly paragraph 3(xvi) of the Order is notapplicable to the Company.

For B S R & Co. LLP

Chartered Accountants

Firm's Registration No: 101248W/W-100022

Sadashiv Shetty

Partner Membership No. 048648

Place : Mumbai Date : 24 May 2019

Annexure B to the Independent Auditors' Report on the standalonefinancial statements of Advanced Enzyme Technologies Limited for the year ended 31 March2019.

Report on the internal financial controls with reference to theaforesaid standalone financial statements under Clause (i) of Sub-section 3 of Section 143of the Companies Act 2013 (Referred to in paragraph (A)(f) under ‘Report on OtherLegal and Regulatory Requirements' section of our report of even date)

Opinion

We have audited the internal financial controls with referencefinancial statements of Advanced Enzyme Technologies Limited ("the Company") asof 31 March 2019 in conjunction with our audit of the standalone financial statements ofthe Company for the year ended on that date.

In our opinion the Company has in all material respects adequateinternal financial controls with reference to standalone financial statements and suchinternal financial controls were operating effectively as at 31 March 2019 based on theinternal financial controls with reference to standalone financial statements criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on

Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants of India (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors areresponsible for establishing and maintaining internal financial controls based on theinternal financial controls with reference to standalone financial statements criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note. These responsibilities include the design implementation andmaintenance of adequate internal financial controls ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013 (hereinafter referred to as"the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to standalone financial statements based on ouraudit. We conducted our audit in accordance with the Guidance Note and the Standards on

Auditing prescribed under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls with reference to standalonefinancial statements. Those

Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls with reference to standalone financial statementswere established and maintained and whether such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to standalone financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to standalone financial statements included obtaining an understanding ofsuch internal financial controls assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgementincluding the assessment of the risks of material misstatement of the standalone financialstatements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls with reference to standalone financial statements.

Meaning of Internal Financial controls with Reference to FinancialStatements

A company's internal financial controls with reference tostandalone financial statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financialstatements that were for external operating purposes effectively in accordancefor withgenerally accepted accounting principles. A company's internal financial controlswith reference to standalone financial statements include those policies and proceduresthat (1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on thefinancial statements.

Inherent Limitations of Internal Financial controls with Reference toFinancial Statements

Because of the inherent limitations of internal financial controls withreference to standalone financial statements including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial controls with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

For B S R & Co. LLP

Chartered Accountants

Firm's Registration No: 101248W/W-100022

Sadashiv Shetty

Partner Membership No. 048648

Place : Mumbai

Date : 24 May 2019


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