Auditor Report of Avanti Feeds Ltd.
Mar 31, 2023
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying Standalone Financial Statements of Avanti Feeds Limited ("the Companyâ) which comprise the Balance Sheet as at 31st March, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (herein after referred to as the "standalone financial statementsâ).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 ("the Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2023, its profit including other comprehensive income, changes in equity and its cash flows for the year ended on that date.
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Companies Act, 2013 and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
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Sl. No |
Key Audit Matters |
Auditor''s Response |
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1. |
Accuracy of recognition, measurement, presentation and disclosures of revenues and other related balances in view of Ind AS 115 "Revenue from Contracts with Customersâ (revenue accounting standard) The application of the revenue accounting standard involves certain key judgements relating to identification of the contract with a customer, identification of distinct performance obligations, determination of transaction price of the identified performance obligations, the appropriateness of the basis used to measure revenue recognized when a performance obligation is satisfied. Additionally, revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. Refer Note 2.4.c and 21 to the Financial Statements |
Principal Audit Procedures We assessed the Company''s process to identify the impact of revenue accounting standard. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows: ⢠We assessed the appropriateness of the revenue recognition accounting policies by comparing with applicable accounting standards. ⢠Selected a sample of continuing and new contracts, and tested the operating effectiveness of the internal control, relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving enquiry and observation, performance and inspection of evidence in respect of operation of these controls. ⢠Tested the relevant information technology systems'' access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the revenue accounting standard. ⢠Selected a sample of continuing and new contracts and performed the following procedures: ⢠Read, analyzed and identified the distinct performance obligations in these contracts. ⢠Compared these performance obligations with that identified and recorded by the Company. ⢠Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration. ⢠Samples in respect of revenue recorded upon transfer of control of promised products or services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those products or services, were tested using a combination of sales orders, gate-in and gate-out passes, ⢠Shipping bills including packing lists, subsequent customs invoicing, bills of lading, customer acceptances and historical trend of collections and disputes. ⢠Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings. ⢠We reviewed the collation of information and the logic of the report generated from the IT system used to prepare the disclosure relating to the periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. |
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2. |
The Company enters into various financial instruments such as investments in quoted and unquoted equity instruments, quoted mutual funds and quoted nonconvertible debentures. As at 31st March, 2023, financial instruments carried at fair value through profit and loss totaled '' 64,015.00 Lakhs (current investments of '' 64,011.80 Lakhs and noncurrent investments of '' 3.20 Lakhs) as disclosed in Note 6 to the Standalone Financial Statements. These financial instruments are recorded at fair value as required by the relevant accounting standard. We have focused on this area due to the complexities associated with the valuation and accounting for these financial instruments. |
Our procedures included but were not limited to: ⢠Obtaining an understanding of the internal risk management procedures and the systems and controls associated with the origination and maintenance of complete and accurate information relating to financial instruments; ⢠Utilizing our treasury experts, we also tested on a sample basis the existence and valuation of derivative contracts as at 31st March, 2023. Our audit procedures focused on the integrity of the valuation models and the incorporation of the contract terms and the key assumptions, including future price assumptions and discount rates; and ⢠Obtaining an understanding of key financial instrument contract terms to assess the appropriateness of accounting reflected in the financial report. We have also assessed the appropriateness of the disclosures included in Note 37 to the Financial Statements. |
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3. |
Inventory valuation and existence: At the balance sheet date, the value of inventory amounted to '' 56019.88 Lakhs representing 27.13% of total assets. Inventories were considered as key audit matter due to the size of the balance and because inventory valuation involves management judgment. As described in note 2.4.i of the financial statements, inventories are carried at the lower of cost and net realizable value on a weighted average basis The Company has segment specific procedures for identifying risk for obsolescence and measuring inventories at the lower of cost or net realizable value |
To address the risk for material error on inventories, our audit procedures included amongst other: ⢠Assessing the compliance of company''s accounting policies over inventory with applicable accounting standards. ⢠Observed the stock take process at Factory locations during the year and at the end of the year and undertook our test counts where ever necessary. ⢠Compared the Quantities we counted with Quantities recorded. ⢠Analysing the Inventory Ageing reports and Net realizable value of inventories ⢠Tested that inventory on hand at the end of the period was recorded at the lower of cost and net realizable value by testing a sample of inventory items to the most recent retail price. |
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4 |
Purchase of Raw material: |
The following are some of the substantive tests that were part of |
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Purchase of Raw material |
our auditing procedures in addition to testing the internal controls'' |
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are being key audit matter |
design and effectiveness.: |
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as the Company procures its |
⢠Internal controls relating to the purchase of raw materials and |
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principle raw materials from |
payments made to the suppliers of the raw materials on the |
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the suppliers and the price of |
basis of source documentation have been assessed in terms of |
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the same is highly volatile to |
their design and tested in terms of their implementation. |
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the market conditions. |
⢠We have performed test of controls over procurement procedures to assess the operating effectiveness of the controls placed in |
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Based upon the production |
recognition of the cost of material consumption. |
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requirements and after |
⢠We have conducted test of details through correlating the raw |
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considering the tentative |
materials procured and the raw material consumed as per the |
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prices, the management |
production and stock reports. |
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decides the raw materials |
⢠Understood the credit terms for payments to suppliers and |
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which have to be procured. The total cost of Raw material purchased by the Entity for the financial year 2022-23 is '' 3,33,190.16 Lakhs. |
assessed whether the same have been complied with. |
Information Other than the Standalone Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board''s Report including Annexures to Board''s Report, Business Responsibility Report and Shareholder''s Information, but does not include the Standalone Financial Statements and our auditor''s report thereon.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.
Management''s Responsibility and Those charged with Governance for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, the Board of Directors is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether these Standalone Financial Statements as a whole are free from material misstatement, whether due 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 audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor''s Report) Order, 2020 ("the Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure-Aâ, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
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 including other comprehensive income, the statement of changes in equity and the statement of cash flows dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid Standalone Financial Statements comply with the Indian 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 31st March, 2023, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2023, from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure-Bâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
h) 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, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements- Refer Note 30 to the financial statements.
ii The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv
a) The management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entities ("Intermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediaries shall, whether, directly or indirectly lend or invest in other person or entity identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person or entity, including foreign entities ("Funding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other person or entity identified in any manner whatsoever by or on behalf of the Funding Parties ("Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
c) Based on the audit procedures that were considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.
v
a) The final dividend paid by the Company during the year in respect of the same declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.
b) The Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.
vi Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of accounts using accounting software which has a feature of recording audit trail (edit log) facility is applicable with effect from 1st April, 2023 to the Company, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended 31st March, 2023.
For TUKARAM & CO LLP
Chartered Accountants
ICAI Firm Registration No: 004436S / S200135
(K RAJENDER REDDY)
Partner
Membership No: 231834
UDIN: 23231834BGVHYL6376
Place: Hyderabad
Date: 24th May, 2023
Mar 31, 2022
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying Standalone Financial Statements of Avanti Feeds Limited (âthe Company") which comprise the Balance Sheet as at 31st March, 2022, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (herein after referred to as the âstandalone financial statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (âthe Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2022, its profit including other comprehensive income, changes in equity and its cash flows for the year ended on that date.
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Companies Act, 2013 and the Rules made there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
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SL. No |
Key Audit Matters |
Auditor''s Response |
|
1. |
Accuracy of recognition, measurement, presentation and disclosures of revenues and other related balances in view of Ind AS 115 âRevenue from Contracts with Customers" (revenue accounting standard) The application of the accounting standard involves certain key judgements relating to identification of the contract with a customer, identification of distinct performance obligations, determination of transaction price of the identified performance obligations, the appropriateness of the basis used to measure revenue recognized when a performance obligation is satisfied. Additionally, revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. Refer Notes 2.4.c and 21 to the Standalone Financial Statements |
We assessed the Company''s process to identify the impact of the revenue accounting standard. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows: ⢠We assessed the appropriateness of the revenue recognition accounting policies by comparing with applicable accounting standards. ⢠Selected a sample of continuing and new contracts, and tested the operating effectiveness of the internal control, relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving enquiry and observation, reperformance and inspection of evidence in respect of operation of these controls. ⢠Tested the relevant information technology systems'' access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the relevant accounting standard. ⢠Selected a sample of continuing and new contracts and performed the following procedures: ⢠Read, analyzed and identified the distinct performance obligations in these contracts. ⢠Compared these performance obligations with that identified and recorded by the Company. ⢠Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration. ⢠Samples in respect of revenue recorded upon transfer of control of promised products or services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those products or services, were tested using a combination of DCs, Sales orders, weighment slips and non-returnable gate passes including customer acceptances, subsequent invoicing and historical trend of collections and disputes. ⢠Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings. We reviewed the collation of information and the logic of the report generated from the IT system used to prepare the disclosure relating to the periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. |
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SL. No |
Key Audit Matters |
Auditor''s Response |
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2. |
The Company enters into various financial instruments such as investments in quoted and unquoted equity instruments, quoted mutual funds and quoted non-convertible debentures. As at 31st March, 2022, financial instruments carried at fair value through profit and loss totaled ''67,097.43 Lakhs (current investments of ''67,095.27 Lakhs and non-current investments of ''2.16 Lakhs) as disclosed in Note 6 to the Standalone Financial Statements. These financial instruments are recorded at fair value as required by the relevant accounting standard. We have focused on this area due to the complexities associated with the valuation and accounting for these financial instruments. |
Our procedures included but were not limited to: ⢠Obtaining an understanding of the internal risk management procedures and the systems and controls associated with the origination and maintenance of complete and accurate information relating to financial instruments; ⢠We also tested on a sample basis the existence and valuation of such financial instruments as at 31st March, 2022. Our audit procedures focused on the integrity of the valuation models and the incorporation of the contract terms and the key assumptions, including future price assumptions and discount rates; and ⢠Obtaining an understanding of key financial instrument contract terms to assess the appropriateness of accounting reflected in the financial report. We have also assessed the appropriateness of the disclosures included in Note 37 to the Standalone Financial Statements. |
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3. |
Inventory valuation and existence At the balance sheet date, the value of inventory amounted to ''71,467.25 Lakhs representing 36.85% of total assets. Inventories were considered as key audit matter due to the size of the balance and because inventory valuation involves management judgment. As described in Note 2.4.j of the financial statements, inventories are carried at the lower of cost and net realizable value on a weighted average basis. The Company has segment specific procedures for identifying risk for obsolescence and measuring inventories at the lower of cost and net realizable value. |
To address the risk for material error on inventories, our audit procedures included amongst others: ⢠Assessing the compliance of Company''s accounting policies over inventory with applicable accounting standards. ⢠Observed the stock take process at Factory locations during the year and at the end of the year and undertook our test counts where ever necessary. ⢠Compared the Quantities we counted with Quantities recorded. ⢠Analyzing, the Inventory Ageing reports and Net realizable value of inventories Tested that inventory on hand at the end of the period was recorded at the lower of cost and net realizable value by testing a sample of inventory items to the most recent selling price. |
Information Other than the Standalone Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board''s Report including Annexures to Board''s Report, Business Responsibility Report and Shareholder''s Information, but does not include the Standalone Financial Statements and our auditor''s report thereon.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, the Board of Directors is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether these Standalone Financial Statements as a whole are free from material misstatement, whether due 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 audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor''s Report) Order, 2020 (âthe Order"), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the âAnnexure-A", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
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 including other comprehensive income, the statement of changes in equity and the statement of cash flows dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid Standalone Financial Statements comply with the Indian 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 31st March, 2022, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2022, from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure-B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of Section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of Section 197 of the Act.
h) 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, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements- Refer Note 30 to the financial statements
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. a) The management has represented that, to the best of its knowledge and belief, no funds have
been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person or entity, including foreign entities (âIntermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediaries shall, whether, directly or indirectly lend or invest in other person or entity identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the company from any person or entity, including foreign entities (âFunding Parties"), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other person or entity identified in any manner whatsoever by or on behalf of the Funding Parties (âUltimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
c) Based on the audit procedures that were considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under subclause (a) and (b) contain any material misstatement.
v. a) The final dividend paid by the Company during the year in respect of the same declared for the previous
year is in accordance with Section 123 of the Act to the extent it applies to payment of dividend. b) The Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend
For TUKARAM & CO LLP
Chartered Accountants
ICAI Firm Registration No: 004436S / S200135
(K. Rajender Reddy)
Partner
Membership No: 231834
UDIN: 22231834AIYFWQ7464
Place : Hyderabad
Date : 12th May, 2022
Mar 31, 2018
Report on the Standalone Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Avanti Feeds Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as âstandalone Ind AS financial statementsâ).
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with relevant rules issued thereunder.
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 policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ Responsibility
Our responsibility is to express an opinion on these standalone Ind AS 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 thereunder.
We conducted our audit of the standalone Ind AS financial statements 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 standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 including the Ind AS, of the financial position of the Company as at 31st March,
2018, and its profit (financial performance including other comprehensive income), changes in equity and its cash flows for the year ended on that date.
Other Matter
The Comparative financial information of the company for the year ended 31st March, 2017 and transition date opening balance sheet as at 01st April, 2016 included in these standalone Ind AS financial statements, are based on previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended 31st March, 2017 and 31st March, 2016 dated 13th May,2017 and 21st May, 2016 respectively expressed an unmodified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the company on transition to the Ind AS, which have been audited by us.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorsâ Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of section 143(11) of the Act, we give in the âAnnexure Aâ, a statement on the matters specified in the paragraph 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, the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account;
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act read with relevant rules issued there under;
e) On the basis of the written representations received from the directors as on 31st March, 2018, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018, from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure-Bâ; and
g) With respect to the other matters to be included in the Auditorâs 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 pending litigations on its financial position in its financial statements- Refer Note 35 to the financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
The Annexure referred to in Independent Auditorsâ Report to the members of the Company on the standalone Ind AS financial statements for the year ended 31st March, 2018, we report that:
Re: Avanti Feeds Limited (âthe Companyâ)
i. In respect of its fixed assets:
(a) T(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) As explained to us, the management has physically verified a substantial portion of the fixed assets during the year and in our opinion frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies noticed on physical verification of fixed assets as compared to the books of account were not material and have been properly dealt with in the books of accounts.
(c) I n our opinion and according to the information and explanations given to us, all the title deeds of immovable properties are held in the name of the company.
ii. According to the information and explanations given to us, the inventories have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. The discrepancies noticed on physical verification of inventory as compared to the books of account were not material and have been properly dealt with in the books of accounts.
iii. The Company has granted unsecured loans to its wholly owned subsidiary covered in the register maintained under section 189 of the Act.
(a) The outstanding loan to one of its subsidiary (Svimsan Exports and Imports Private Limited), aggregating to Rs.91.40 Lakh which was considered doubtful of recovery and the same has been provided for in the books of accounts.
(b) As the loan is granted to its wholly owned subsidiary company, in our opinion prima facie, the loan is not prejudicial to the interest of the company.
(c) As the above loan is interest free and repayable on demand, the question of overdue amount does not arise.
iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investments made.
v. According to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 73 and 76 or any other relevant provisions of the Act and the rules framed there under.
vi. We have broadly reviewed the books of account and records maintained by the Company pursuant to the Rules made by the Central Government of India for the maintenance of cost records prescribed under sub-section (1) of section 148 of the Act in respect of production and processing activities of the Company and are of the opinion that prima facie, the prescribed accounts and records have been maintained. We have however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.
vii. In respect of Statutory dues:
(a) The Company is regular in depositing with appropriate authorities, undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of such statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, the details of dues of value added tax, customs duty, electricity duty dues on account of dispute are given below :
|
Name of the Statute |
Nature of the Dues |
Amount (in Lakh) |
Period to which the amount relates |
Forum where dispute is pending |
|
Central excise Act, 1944 and Customs Act, 1962 |
Customs duty & Central Excise |
2,999.18 |
1999-2002 |
CESTAT, Hyderabad |
|
Madhya Pradesh VAT Act, 2002 |
Sales tax (MP VAT demand for soya transactions in 2005-06) |
29.22 |
2005-2006 |
High Court of Madhya Pradesh |
|
Electricity Act, 2003 |
Electricity duty |
4.37 |
2011-2012 to 2014-2015 |
Supreme Court |
|
Customs Act, 1962 |
Customs duty |
60.82 |
2009 -2010 to 2011-2012 |
CESTAT, Chennai |
viii. Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to banks, governments and financial institutions. The Company did not have any debentures outstanding as at the year end.
ix. Based on the information and explanations given to us by the management, the company has not raised moneys by way of Initial Public Offer and further public offer of equity shares, convertible securities, debt securities. No term loans were taken during the year by the company.
x. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no material fraud, by the Company or on the Company by its officers or employees, has been noticed or reported during the year.
xi. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
xii. I n our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.
xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
xiv. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
Annexure - B to the Independent Auditorsâ Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Avanti Feeds Limited (âthe Companyâ) as of 31st March, 2018 in conjunction with our audit of the standalone Ind AS 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 âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
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 expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised 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.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2018 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.
For TUKARAM & CO.,
Chartered Accountants
ICAI Firm Regn. 004436S
(B. LOKANATH)
Place: Hyderabad PARTNER
Date: 26/05/2018 Membership No.024927
Mar 31, 2017
INDEPENDENT AUDITORS'' REPORT To the Members of Avanti Feeds Limited Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Avanti Feeds Limited (''the Company'') which comprise the Balance Sheet as at 31st March, 2017, 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 Standalone 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 standalone 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 principles 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 and the Companies (Accounting standards) amendment Rules, 2016.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial 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 standalone 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. 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 audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 31st March, 2017 and its PROFIT and its 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, 2016 ("the Order"), issued by the Central Government of India in terms of section 143(11) of the Act, we give in the Annexure-A, 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 standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016.
e) On the basis of the written representations received from the directors as on 31st March, 2017, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017, from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure-B"; and
g) 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 pending litigations on its financial position in its financial statements- Refer Note 34 to the financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in its standalone financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and these are in accordance with the books of accounts maintained by the Company- Refer Note 42 to the standalone financial statements. Based on our enquiries, test check of the books of account and other details maintained by the Company and relying on the management representation regarding the holding and nature of cash transactions, including Specified Bank Notes, we report that these disclosures are in accordance with the books of accounts maintained by the Company.
Annexure - A referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements section of our report of even date
Re: Avanti Feeds Limited (''the Company'')
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) As explained to us, the management has physically verified a substantial portion of the fixed assets during the year and in our opinion frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies noticed on physical verification of fixed assets as compared to the books of account were not material and have been properly dealt with in the books of accounts.
(c) In our opinion and according to the information and explanations given to us, all the title deeds of immovable properties are held in the name of the company.
ii. According to the information and explanations given to us, the inventories have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. The discrepancies noticed on physical verification of inventory as compared to the books of account were not material and have been properly dealt with in the books of accounts.
iii. The Company has granted unsecured loans to its wholly owned subsidiaries covered in the register maintained under section 189 of the Act.
(a) The outstanding loan to one of its subsidiary (Svimsan Exports and Imports Private Limited), aggregating to Rs. 90.98 Lakhs which was considered doubtful of recovery had been provided for in the books of accounts.
(b) In respect of the loan to other subsidiary (Avanti Frozen Foods Private Limited), the schedule of repayment of principal and payment of interest has been stipulated and the receipts are regular.
(c) In respect of the aforesaid loans, there is no amount overdue for more than 90 days other than the loan of Rs. 90.98 Lakhs, considered doubtful of recovery and provided for as referred to in para (iii) (a) above. In our opinion, reasonable steps have been taken by the Company for the recovery of the principal amounts and interest in respect of other loans.
iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investments made.
v. According to the information and explanations given to us, the Company has not accepted deposits from the public within the meaning of Section 73 and 76 or any other relevant provisions of the Act and the rules framed there under.
vi. We have broadly reviewed the books of account and records maintained by the Company pursuant to the Rules made by the Central Government of India for the maintenance of cost records prescribed under sub-section (1) of section 148 of the Act in respect of production and processing activities of the Company and are of the opinion that prima facie, the prescribed accounts and records have been maintained. We have however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.
vii. In respect of Statutory dues:
(a) The Company is regular in depositing with appropriate authorities, undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, customs duty, value added tax, cess and other material statutory dues applicable to it. The provisions relating to excise duty are not applicable to the Company. According to the information and explanations given to us, no undisputed amounts payable in respect of such statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, the dues outstanding of income-tax, sales-tax, service tax, customs duty, value added tax and cess on account of dispute, are as follows:
|
Name of the Statute |
Nature of the Dues |
Amount Rs. In Lakhs |
Period to which the amount relates |
Forum where dispute is pending |
|
Central excise Act, 1944 and Customs Act, 1962 |
Customs duty & Central Excise |
2,999.18 |
1999-2002 |
CESTAT, Hyderabad |
|
Madhya Pradesh VAT Act, 2002 |
Sales tax (MP VAT demand for soya transactions in 2005-06) |
29.22 |
2005-2006 |
High Court of Madhya Pradesh |
|
Income tax Act, 1961 |
Income-tax |
5.13 |
2011-2012 |
Commissioner (Appeals) |
|
Electricity Act, 2003 |
Electricity duty |
4.37 |
2011-2012 to 2014-2015 |
Supreme Court |
|
Customs Act, 1962 |
Customs duty |
60.82 |
2009 -2010 to 2011-2012 |
CESTAT, Chennai |
viii. Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to banks and financial institutions. The Company did not have any debentures outstanding as at the year end.
ix. Based on the information and explanations given to us by the management, the company has not raised any moneys by way of initial public offer or further public offer of equity shares, convertible securities and debt securities. No term loans were taken during the year by the Company.
x. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no material fraud, by the Company or on the Company by its officers or employees, has been noticed or reported during the year.
xi. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.
xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
xiv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
Annexure - B to the Our Report of even date on the Standalone Financial Statements of Avanti Feeds Limited Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Avanti Feeds Limited ("the Company") as of 31 March 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s 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 (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company''s 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 company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s 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.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2017, 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.
For KARVY & CO.
Chartered Accountants
ICAI Firm Registration No: 001757S
(Ajaykumar Kosaraju)
Partner
Membership No. 021989
Place: Hyderabad
Date: 13.05.2017
Mar 31, 2016
To the Members of Avanti Feeds Limited Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Avanti Feeds Limited (''the Company'') which comprise the Balance Sheet as at 3151 March, 2016, 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 Standalone 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 and presentation of these standalone 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 principles 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 policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone 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 whet 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. 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 audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 31st March, 2016 and its PROFIT and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure-A", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
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 standalone 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 31st March, 2016, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016, from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure-B"; and
g) 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 pending litigations on its financial position in its financial statements - Refer Note 34 to the financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
Annexure - A referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements section of our report of even date
Report on Companies (Auditor''s Report) Order, 2016 (''the Order'') issued by the Central Government in terms of Section 143(11) of the Companies Act, 2013 (''the Act'') of Avanti Feeds Limited (''the Company'')
i. In respect of the Company''s fixed assets:
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) As explained to us, the management has physically verified a substantial portion of the fixed assets during the year and in our opinion frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies noticed on physical verification of fixed assets as compared to the books of account were not material and have been properly dealt with in the books of accounts.
(c) In our opinion and according to the information and explanations given to us, all the title deeds of immovable properties are held in the name of the company.
ii. According to the information and explanations given to us, the inventories have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. The discrepancies noticed on physical verification of inventory as compared to the books of account were not material and have been properly dealt with in the books of accounts.
iii. The Company has granted unsecured loans to its wholly owned subsidiaries covered in the register maintained under section 189 of the Act.
(a) The outstanding loan to one of its subsidiary (Svimsan Exports and Imports Private Limited), aggregating to Rs. 90.56 Lacs which was considered doubtful of recovery had been provided for in the books of accounts.
(b) In respect of the loan to other subsidiary (Avanti Frozen Foods Private Limited), the schedule of repayment of principal and payment of interest has been stipulated and the receipts are regular.
(c) In respect of the aforesaid loans, there is no amount overdue for more than 90 days other than the loan of Rs. 90.56 Lacs, considered doubtful of recovery and provided for as referred to in para (iii) (a) above. In our opinion, reasonable steps have been taken by the Company for the recovery of the principal amounts and interest in respect of other loans.
iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investments made.
v. According to the information and explanations given to us, the Company has not accepted deposits from the public within the meaning of Section 73 and 76 or any other relevant provisions of the Act and the rules framed there under.
vi. We have broadly reviewed the books of account and records maintained by the Company pursuant to the Rules made by the Central Government of India for the maintenance of cost records prescribed under sub-section (1) of section 148 of the Act in respect of production and processing activities of the Company and are of the opinion that prima facie, the prescribed accounts and records have been maintained. We have however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.
vii. In respect of Statutory dues:
(a) According to the information and explanations given to us 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, customs duty, service tax, cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.
According to the information and explanations given to us, no undisputed amounts payable in respect of such statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, the following dues of income-tax, sales-tax, service tax, customs duty, value added tax, electricity duty have not been deposited by the Company on account of disputes:
|
Nature of the Statute |
Nature of the Dues |
Amount Rs. in Lakhs |
Period to which the amount relates |
Forum where dispute is pending |
|
Customs Act, 1962 |
Customs duty |
2,999.18 |
1999-2002 |
Commissioner of Central Excise and Customs, Hyderabad, Telangana. |
|
Madhya Pradesh VAT Act, 2002 |
Sales tax (MP VAT demand for soya transactions in 2005-06) |
29.22 |
2005-06 |
High Court of Madhya Pradesh |
|
Income tax Act, 1961 |
Income-tax |
5.13 |
2011-12 |
Commissioner (Appeals) |
|
Electricity Act, 2003 |
Electricity duty |
8.61 |
2011-12 to 2014-15 |
High Court of Andhra Pradesh |
|
Customs Act, 1962 |
Customs duty |
60.82 |
2009-12 |
CESTAT, Chennai |
|
Income tax Act, 1961 |
Income-tax |
57.33 |
2012-13 |
Commissioner (Appeals) |
viii. Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to banks and financial institutions. The Company did not have any debentures outstanding as at the year end.
ix. Based on the information and explanations given to us by the management, the company has not raised any moneys by way of initial public offer or further public offer of equity shares, convertible securities and debt securities. No term loans were taken during the year by the Company.
x. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no material fraud, by the Company or on the Company by its officers or employees, has been noticed or reported during the course of our audit.
vi. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.
xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
xiv. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
Annexure -Bto the Our Report of even date on the Standalone Financial Statements of Avanti Feeds Limited Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Avanti Feeds Limited ("the Company") as of 31 March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s 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 (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company''s 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 company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s 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.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, 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.
For KARVY & CO.
Chartered Accountants
ICAI Firm Registration No: 01757S
(K. Ajay Kumar)
Partner
Membership No. 021989
Place: Hyderabad
Date: 21.05.2016
Mar 31, 2015
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of
Avanti Feeds Limited ('the Company') 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 significant
accounting policies and other explanatory information.
Management's Responsibility for the Standalone 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 standalone 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 principles
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 includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial 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 standalone
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
thereunder.
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 audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone 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 31st March, 2015 and its profit and its cash flows for the year
ended on that date.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order, 2015 ("the
Order"), issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 3 and 4 of the Order,
to the extent applicable.
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 standalone 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 31st March, 2015, taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March,
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 pending litigations on its
financial position in its financial statements- Refer Note 32 to the
financial statements.
ii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure referred to in paragraph 1 of report on other legal and
regulatory requirements section of our report of even date
Re: Avanti Feeds Limited ('the Company')
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) As explained to us, the management has physically verified a
substantial portion of the fixed assets during the year and in our
opinion frequency of verification is reasonable having regard to the
size of the Company and the nature of its assets. The discrepancies
noticed on physical verification of fixed assets as compared to the
books of account were not material and have been properly dealt with in
the books of accounts.
ii. In respect of its inventories:
(a) The inventories have 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 physical verification of inventory
followed by the management are 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 and on the basis of our examination of the records of
inventory, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to the books of account were not material and have been properly dealt
with in the books of accounts.
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 Act.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and nature of its business with regard to
the purchase of inventory and fixed assets and also for the sale of
goods. The activities of the Company do not involve sale of services.
During the course of our audit, we have not observed any major weakness
or continuing failure to correct any major weakness in the internal
control system of the Company in respect of these areas.
v. According to the information and explanations given to us, the
Company has not accepted deposits from the public within the meaning of
Section 73 and 76 or any other relevant provisions of the Act and the
rules framed there under.
vi. We have broadly reviewed the books of account and records
maintained by the Company pursuant to the Rules made by the Central
Government of India for the maintenance of cost records prescribed
under sub-section (1) of section 148 of the Act in respect of
production and processing activities of the Company and are of the
opinion that prima facie, the prescribed accounts and records have been
maintained. We have however, not made a detailed examination of the
records with a view to determine whether they are accurate or complete.
vii. In respect of Statutory dues:
(a) The Company is regular in depositing with appropriate authorities,
undisputed statutory dues including provident fund, employees' state
insurance, income-tax, sales-tax, wealth tax, service tax, customs
duty, value added tax, cess and other material statutory dues
applicable to it. The provisions relating to excise duty are not
applicable to the Company. According to the information and
explanations given to us, no undisputed amounts payable in respect of
such statutory dues were outstanding, at the year end, for a period of
more than six months from the date they became payable.
(b) According to the information and explanations given to us, the dues
outstanding of income-tax, sales-tax, wealth tax, service tax, customs
duty, value added tax and cess on account of dispute, are as follows:
Nature of the Nature Amount
Statute of the Dues (Rs. in
Lacs)
Central Excise Customs duty &
Act,1944 Central Excise 2,999.18
and Customs
Act, 1962
Madhya Pradesh Sales tax (MP 29.22
VAT Act, 2002 VAT demand for
soya transactions
in 2005-06)
Income Tax Income-tax 5.13
Act, 1961
Electricity Electricity duty 8.61
Act, 2003
Customs Act, Customs duty 60.82
1962
Nature of the Period to Forum where
Statute which the dispute is
amount pending
relates
Central Excise 1999-2002 CESTAT, Bangalore
Act,1944
and Customs
Act, 1962
Madhya Pradesh 2005-06 High Court of Madhya
VAT Act, 2002 Pradesh
Income Tax 2011-12 Commissioner (Appeals)
Act, 1961 Hyderabad
Electricity 2011-12 High Court of
Act, 2003 to 2014-15 Andhra Pradesh
2009-2012 CESTAT Chennai
Customs Act,
1962
(c) According to the information and explanations given to us, the
amount required to be transferred to investor education and protection
fund in accordance with the relevant provisions of the Companies Act,
1956 (1 of 1956) and rules made thereunder has been transferred to such
fund within time.
viii. The Company does not have any accumulated losses at the end of
the financial year. The Company has not incurred cash losses during the
current financial year covered by the audit and in the immediately
preceding financial year.
ix. Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in the repayment of dues to banks and
financial institutions. The Company did not have any debentures
outstanding as at the year end.
x. The Company has pledged its investment in equity shares of Patikari
Power Private Limited to the extent of 42.50 lacs equity shares of
Rs.10 each with respect to a loan availed by the latter from a
consortium of banks led by State Bank of India. However, the terms and
conditions whereof are not prejudicial to the interest of the Company.
xi. Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
xii. Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For KARVY & CO.
Chartered Accountants
ICAI Firm Registration No: 01757S
V. Kutumba Rao
Partner
Membership No.018796
Place: Hyderabad
Date: 09.05.2015
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Avanti Feeds
Limited ("the Company") which comprise the Balance Sheet as at March
31, 2013, and the Statement of Profit and Loss and the Cash Flow
Statement for the year ended March 31, 2013 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 (Âthe Act''''). This responsibility includes
the design, implementation and maintenance of internal control 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
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. 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 audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, 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 March 31, 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 (Âthe
Order''''), 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, 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 comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956; and
e. on the basis of written representations received from the directors
as on March 31, 2013 and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013 from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
Annexure to the Auditors'' Report
The Annexure referred to in our report to the members of Avanti Feeds
Limited (''the Company'') for the year ended March 31, 2013. We report
that:
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 substantial portion of the fixed assets have been physically
verified by the management during the year and in our opinion frequency
of verification is reasonable having regard to the size of the Company
and the nature of its assets. The discrepancies noticed on physical
verification of fixed assets as compared to the books of account were
not material and have been properly dealt with in the books of
accounts.
(c) In our opinion, fixed assets disposed off during the year were not
substantial and therefore do not affect the going concern assumption.
ii. In respect of its inventories:
(a) The inventories have 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 physical verification of inventory
followed by the management are 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 and on the basis of our examination of the records of
inventory, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to the books of account were not material and have been properly dealt
with in the books of accounts.
iii. (a) According to the information and explanations given to us,
during the year the Company has not granted any loans to companies
covered in the register maintained under Section 301 of the Companies
Act, 1956. Accordingly, clauses 4 (iii) (a) to 4 (iii) (d) of the Order
are not applicable. (b) According to the information and explanations
given to us, the Company has not taken any unsecured loan from a
Company covered in the register maintained under Section 301 of the
Companies Act, 1956. iv. In our opinion and according to the
information and explanations given to us, there are adequate internal
control systems commensurate with the size of the Company and nature of
its business with regard to the purchase of inventory and fixed assets
and also for the sale of goods and services. During the course of our
audit, no major weakness has been noticed in the internal controls. v.
According to the information and explanations given to us, contracts or
arrangements which need to be entered, during the period, in the
register to be maintained under Section 301 of the Companies Act, 1956
have been so entered. vi. The Company has not accepted deposits from
the public within the meaning of Section 58A and 58AA of the Companies
Act, 1956 and the rules framed there under. vii. In our opinion, the
Company has an internal audit system commensurate with the size and the
nature of its business.
viii. We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government of India
for the maintenance of cost records prescribed under clause (d) of
sub-section (1) of Section 209 of the Companies Act, 1956 in respect of
production and processing activities of the Company and are of the
opinion that prima facie, the prescribed accounts and records have been
maintained. We have not, however made a detailed examination of the
records with a view to determine whether they are accurate or complete.
ix. In respect of Statutory dues:
(a) According to the books and records as produced and examined by us
and also based on the Management representations, it was found that
there were no undisputed statutory dues in respect of Provident Fund,
Investor Education and Protection Fund, Employees'' State insurance,
Income tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Cess and
other statutory dues to the extent applicable to be deposited with the
appropriate authorities during the year. According to the information
and explanations given to us, no undisputed amounts payable in respect
of the above were in arrears as at March 31 , 2013 for a period of more
than six months from the date on which they became payable.
(b) According to the information and explanations given to us, there
are disputed amounts in respect of Service Tax amounting to Rs.8.26
Lacs, at the forum of CESTAT, Bengalore, in respect of MP VAT,
amounting to Rs.29.22 Lacs, at the forum of The Hon''ble High Court of
Madhya Pradesh and in respect of Electricity Duty, amounting to Rs 3.64
Lacs, at the forum of The Hon''ble High Court of Andhra Pradesh; which
have not been deposited with the appropriate authorities as on March
31st 2013. Except for what has been stated, there are no other amounts
in respect of income tax, sales- tax, Service-tax, customs duty,
wealth-tax, excise duty and Cess, that have not been deposited with the
appropriate authorities on account of any dispute.
x. The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred cash losses during the
current financial year and in the previous financial year.
xi. Based on our audit procedures and on the basis of information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in the repayment of dues to banks and
financial institutions. The Company did not have any debentures
outstanding as at the Balance Sheet date.
xii. 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.
Accordingly, clause 4 (xii) of the Order is not applicable to the
Company.
xiii. In our opinion, the Company is not a Chit fund or a Nidhi/ Mutual
Benefit fund/ Society. Accordingly, Clause 4 (xiii) of the Order is not
applicable to the Company.
xiv. In our opinion, the Company is not dealing in or trading in
Shares, Securities, debentures and other investments. Accordingly,
Clause 4 (xiv) of the Order is not applicable to the Company.
xv. The Company has pledged its investment in equity share of
M/s.Patikari Power Private Limited to the extent of 42.50 Lacs equity
shares of Rs.10 each with respect to a loan availed by M/s.Patikari
Power Private Limited from consortium of banks led by State Bank of
India. However, the terms and conditions thereof are not prejudicial to
the interest of the Company.
xvi. In our opinion, and according to the information and explanations
given to us, the term loans have been utilised, on an overall basis,
for the purposes for which they were obtained.
xvii. According to the information and explanations given to us and
overall examination of the balance sheet of the Company, we are of the
opinion that there are no funds raised on shortÂterm basis that have
been used for long term investment.
xviii. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act, during the period.
xix. According to the information and explanations given to us and the
records examined by us, no debentures were issued by the Company.
Accordingly, Clause 4 (xix) of the Order is not applicable to the
Company.
xx. The Company has not raised any money by public issues during the
year.
xxi. In our opinion and according to the information and explanations
given to us, no material fraud on or by the Company has been noticed or
reported during the year.
For KARVY & CO
Chartered Accountants
(Registration No.001757S)
Place: Hyderabad (K. AJAY KUMAR)
Date : 25.05.2013 PARTNER
(M. No: 021989)
Mar 31, 2012
We have audited the attached Balance sheet of M/S.AVANTI FEEDS LIMITED
as at 31st March, 2012, and also the Statement of Profit & Loss for the
year ended on that date 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.
1. 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 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.
2. As required by the Companies (Auditor's Report) Order, 2003, as
amended by the Companies (Auditor's Report)(Amendment) Order, 2004,
(together the 'Order') 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 the
paragraphs 4 and 5 of the said order.
3. Further to our comments in the Annexure referred to in paragraph 2
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 the
books of the Company;
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
Accounting Standards referred to in sub-section (3C) of Section 211
Of the Companies Act, 1956 , to the extent applicable;
e. On the basis of the written representations received from the
Directors/ Companies, as on 31st March, 2012 and taken on record by
the Board of Directors, we report that none of the Directors are
disqualified as on 31st March, 2012 from being appointed as a Director
in terms of Clause (g) of sub- section (1) of Section 274 of the
Companies Act, 1956;
f. In our opinion, and to the best of our information and according to
the explanations given to us, the said accounts, read together with the
Company's Accounting Policies and Notes thereto, 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:
i. in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012 ;
ii. In the case of the Statement of Profit and Loss, profit for the
year ended on that date; and
iii. in the case of Cash Flow Statement, of the cash flows for the year
ended on that date
Annexure to the Auditors' Report
(Referred to in paragraph 2 of our report)
i. In respect of its fixed assets:
(a) The has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) A substantial portion of the fixed assets have been physically
verified by the management during the year and in our opinion frequency
of verification is reasonable having regard to the size of the and the
nature of its assets. No material discrepancies were noticed on such
physical verification.
(c) In our opinion, fixed assets disposed off during the year were not
substantial and therefore do not affect the going concern assumption.
ii. In respect of its inventories:
(a) The inventories have 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 physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us and on the basis of our examination of the records of
inventory, the is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to the books of account were not material and have been properly dealt
with in the books of accounts.
iii. (a) According to the information and explanations given to us,
during the year the has not granted any loans to companies covered in
the register maintained under Section 301 of the Companies Act, 1956.
Accordingly, clauses 4 (iii) (a) to 4 (iii) (d) of the Order are not
applicable.
(b) According to the information and explanations given to us, the has
not taken any unsecured loan from a covered in the register maintained
under Section 301 of the Companies Act, 1956.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the and nature of its business with regard to the
purchase of inventory and fixed assets and also for the sale of goods
and services. During the course of our audit, no major weakness has
been noticed in the internal controls.
v. According to the information and explanations given to us ,
contracts or arrangements which need to be entered, during the period,
in the register to be maintained under Section 301 of the Companies Act,
1956 have been so entered.
vi. The has not accepted deposits from the public within the meaning
of Section 58A and 58AA of the Companies Act, 1956 and the rules framed
there under.
vii. In our opinion, the has an internal audit system commensurate with
the size and the nature of its business.
viii. We have broadly reviewed the books of account maintained by the
pursuant to the Rules made by the Central Government of India for the
maintenance of cost records prescribed under clause (d) of sub- section
(1) of Section 209 of the Companies Act, 1956 in respect of production
and processing activities of the and are of the opinion that prima
facie, the prescribed accounts and records have been maintained. We
have not, however made a detailed examination of the records with a
view to determine whether they are accurate or complete.
ix. In respect of Statutory dues:
a) According to the books and records as produced and examined by us in
and also based on the Management representations, it was found that
there were no undisputed statutory dues in respect of Provident Fund,
Investor Education and Protection Fund, Employees' State insurance,
Income tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Cess and
other statutory dues to the extent applicable to be deposited with the
appropriate authorities during the year. According to the information
and explanations given to us, no undisputed amounts payable in respect
of the above were in arrears as at March 31st, 2012 for a period of
more than six months from the date on which they became payable.
b) According to the information and explanations given to us, there are
disputed amounts in respect of Service Tax, amounting to Rs.8.26 Lacs,
at the forum of CESTAT, Bengalore and in respect of MP VAT, amounting
to Rs.29.22 Lacs, at the forum of The Hon'ble High Court Of Madhya
Pradesh; which have not been deposited with the appropriate authorities
as at March 31, 2012. Except for what has been stated, there are no
other amounts in respect of income tax, sales-tax, Service-tax, customs
duty, wealth-tax, excise duty and Cess, that have not been deposited
with the appropriate authorities on account of any dispute.
x. The does not have accumulated losses at the end of the financial
year. The has not incurred cash losses during the current financial
year and in the previous financial year.
xi. Based on our audit procedures and on the basis of information and
explanations given by the management, we are of the opinion that the has
not defaulted in the repayment of dues to banks . No loans have been
taken by the from financial institutions and the did not have any
debentures outstanding as at the Balance Sheet date.
xii. According to the information and explanations given to us, the has
not granted any loans and advances on the basis of security by way of
pledge of shares, debentures and other securities. Accordingly, clause
4 (xii) of the Order is not applicable to the.
xiii. In our opinion, the is not a Chit fund or a Nidhi/ Mutual
Benefit fund/ Society. Accordingly, Clause 4 (xiii) of the Order is
not applicable to the.
xiv In our opinion, the is not dealing in or trading in Shares,
Securities, debentures and other investments. Accordingly, Clause 4
(xiv) of the Order is not applicable to the.
xv. The has pledged its investment in M/s Patkari Power Pvt. Ltd with
respect to a loan availed by M/s.Patkari Power Private Limited from
consortium of banks led by State Bank Of India. However, the terms and
conditions whereof are not prejudicial to the interest of the Company.
xvi. In our opinion , and according to the information and explanations
given to us, the term loans have been applied , on an overall basis ,
for the purposes for which they were obtained.
xvii. According to the information and explanations given to us and
overall examination of the balance sheet of the , we are of the opinion
that there are no funds raised on short -term basis that have been used
for long term investment.
xviii. The has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act, during the period.
xix. According to the information and explanations given to us and the
records examined by us, no debentures were issued by the . Accordingly,
Clause 4 (xix) of the Order is not applicable to the .
xx. The has not raised any money by public issues during the year.
xxi. In our opinion and according to the information and explanations
given to us , no material fraud on or by the has been noticed or
reported during the year.
For KARVY & CO
Chartered Accountants
(Registration No.001757S)
Place: Hyderabad (K. AJAY KUMAR)
Date : 14.07.2012 PARTNER
(M. No: 21989)
Mar 31, 2011
We have audited the attached Balance Sheet of M/S.AVANTI FEEDS LIMITED
as at 31st March, 2011, the Profit & 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.
1. 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 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.
2. As required by the Companies (Auditor's Report) Order, 2003, as
amended by the Companies (Auditor's Report)(Amendment) Order, 2004,
(together the 'Order') issued by the Central Government Of India, in
terms of Section 227 (4A) of the Companies Act,1956, we enclose in the
Annexure a statement on the matters specified in the paragraphs 4 and 5
of the said order.
3. Further to our comments in the Annexure referred to in paragraph 2
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 the
books of the Company;
c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
d. 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;
e. On the basis of the written representations received from the
Directors as on 31st March, 2011 and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st March, 2011 from being appointed as Director in terms of Clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956;
f. In our opinion, and to the best of our information and according to
the explanations given to us, the said accounts read together with the
Company's Accounting Policies and Notes hereto, 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:
i. in the case of the Balance Sheet, of the state of affairs of the
Company as on 31st March, 2011 ; ii. in the case of the Profit and
Loss Account, of the Profit of the Company for the year ended on that
date; and
iii. in the case of Cash Flow Statement, of the cash flows for the
year ended on that date
Annexure to the Auditors' Report
Referred to in paragraph 2 of our report
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 substantial portion of the fixed assets have been physically
verified by the management during the year and in our opinion frequency
of verification is reasonable having regard to the size of the Company
and the nature of its assets. No material discrepancies were noticed on
such physical verification.
(c ) In our opinion, fixed assets disposed off during the year were not
substantial and therefore do not affect the going concern assumption.
ii. In respect of its inventories:
(a) The inventories have 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 physical verification of inventory
followed by the management are 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 and on the basis of our examination of the records of
inventory, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to the books of account were not material and have been properly dealt
with in the books of account.
iii. a) According to the information and explanations given to us,
during the year the Company has not granted any loans to companies
covered in the register maintained under Section 301 of the Companies
Act, 1956. Accordingly, clauses 4 (iii) (a) to 4 (iii) (d) of the Order
are not applicable.
e) According to the information and explanations given to us, the
Company has taken an unsecured loan from a Company covered in the
register maintained under section 301 of the Companies Act, 1956.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and nature of its business with regard to
the purchase of inventory and fixed assets and also for the sale of
goods and services. During the course of our audit, no major weakness
has been noticed in the internal controls.
v. The transactions as stated in clause 4 (iii) above that need to be
entered in the register maintainedunder Section 301 of the Companies
Act, 1956 have been so entered.
vi. The Company has not accepted deposits from the public within the
meaning of Section 58A and 58AA of the Companies Act, 1956 and the
rules framed there under.
vii. In our opinion, the Company has an internal audit system
commensurate with the size and the nature of its business.
viii. We have broadly reviewed the books of account and records
maintained by the Company relating to the generation of wind power,
pursuant to Rules made 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. We have, however, not made a
detailed examination of the records with a view to determining whether
they are accurate or complete. To the best of our knowledge and
according to the information given to us, the Central Government has
not prescribed the maintenance of cost records for any other product
manufactured by the Company.
ix. In respect of Statutory dues:
a) According to the books and records as produced and examined by us in
and also based on the Management representations, it was found that
there were no undisputed statutory dues in respect of Provident Fund,
Investor Education and Protection Fund, Employees' State insurance,
Income tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Cess and
other statutory dues to the extent applicable to be deposited with the
appropriate authorities during the year. According to the information
and explanations given to us, no undisputed amounts payable in respect
of the above were in arrears as at March 31st, 2011 for a period of
more than six months from the date on which they become payable.
b) According to the information and explanations given to us, there are
disputed amounts in respect of Service Tax, amounting to Rs.8.26 Lacs,
at the forum of CESTAT, Bangalore and in respect of MP VAT, amounting
to Rs.29.22 Lacs, at the forum of The Hon'ble High Court Of Madhya
Pradesh; which have not been deposited with the appropriate authorities
during the financial year. Except for what has been stated, there are
no other amounts in respect of income tax, sales-tax, Service- tax,
customs duty, wealth-tax, excise duty and Cess, that have not been
deposited with the appropriate authorities on account of any dispute.
x. The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred cash losses during the
current financial year and in the previous.
xi. Based on our audit procedures and on the basis of information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in the repayment of dues to banks. No loans
have been taken by the Company from financial institutions.
xii. 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.
Accordingly, clause 4 (xii) of the Order is not applicable to the
Company.
xiii. In our opinion, the Company is not a Chit fund or a Nidhi/ Mutual
Benefit fund/ Society. Accordingly, Clause 4 (xiii) of the Order is not
applicable to the Company.
xiv. In our opinion, the Company is not dealing in or trading in
Shares, Securities, debentures and other investments. According, Clause
4 (xiv) of the Order is not applicable to the Company.
xv. The Company has pledged its investment in M/s Patkari Power Pvt.
Ltd with respect to a loan availed of by M/s.Patkari Power Private
Limited from State Bank Of India. The company has also given a
corporate guarantee in respect of term loan obtained by Avanti Thai
Aqua feeds private limited. However; the terms and conditions whereof
are not prejudicial to the interest of the company.
xvi. To the best of our knowledge and belief and according to the
information and explanations given to us, no term loans were taken by
the Company during the year. Accordingly, Clause 4 (xvi) of the Order
is not applicable to the Company.
xvii. According to the information and explanations given to us and
overall examination of the balance sheet of the Company, we are of the
opinion that there are no funds raised on short Ãterm basis that have
been used for long term investment.
xviii. During the financial year, the Company has not made preferential
allotment of shares to the Company covered under register maintained
under section 301 of the Companies Act, 1956.
xix. According to the information and explanations given to us and the
records examined by us, no debentures were issued by the Company.
Accordingly, Clause 4 (xix) of the Order is not applicable to the
Company.
xx. The Company has not raised any money by public issues during the
year. Accordingly, Clause 4 (xx) is not applicable to the Company.
xxi. To the best of our knowledge and belief and according to the
information and explanations given to us, no major fraud on or by the
Company was noticed or reported during the year.
For KARVY & CO
Chartered Accountants
(Registration No.001757S)
(K. AJAY KUMAR)
PARTNER
(M. No: 21989)
Place: Hyderabad
Date : 21.05.2011
Mar 31, 2010
We have audited the attached Balance sheet of M/S.AVANTI FEEDS LIMITED
as at 31st March, 2010, the Profit & 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.
1. 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 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.
2. As required by the Companies (Auditors Report) Order, 2003, as
amended by the Companies (Auditors Report)(Amendment) Order, 2004,
(together the Order) issued by the Central Government Of India, in
terms of Section 227 (4A) of the Companies Act,1956, we enclose in the
Annexure a statement on the matters specified in the paragraphs 4 and 5
of the said order.
3. Further to our comments in the Annexure referred to in paragraph 2
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 the
books of the Company;
c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
d. 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;
e. On the basis of the written representations received from the
Directors as on 31st March, 2010 and taken on record by the Board of
Directors, we report that none of the Directors are disqualified as on
31st March, 2010 from being appointed as Director in terms of Clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956;
f. In our opinion, and to the best of our information and according to
the explanations given to us, the said accounts, read together with the
Companys Accounting Policies and Notes hereto, 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:
i. in the case of the Balance Sheet, of the state of affairs of the
Company as on 31st March, 2010 ;
ii. in the case of the Profit and Loss Account, of the Loss of the
Company for the year ended on that date; and
iii. in the case of Cash Flow Statement, of the cash flows for the year
ended on that date
Annexure to the Auditors Report Referred to in paragraph 2 of our
report
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 substantial portion of the fixed assets have been physically
verified by the management during the year and in our opinion frequency
of verification is reasonable having regard to the size of the Company
and the nature of its assets. No material discrepancies were noticed on
such physical verification.
(c) In our opinion, fixed assets disposed off during the year were not
substantial and therefore do not affect the going concern assumption.
ii. In respect of its inventories:
(a) The inventories have 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 physical verification of inventory
followed by the management are 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 and on the basis of our examination of the records of
inventory, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to the books of account were not material and have been properly dealt
with in the books of account.
iii. a) According to the information and explanations given to us,
during the year the Company has not granted any loans to companies
covered in the register maintained under Section 301 of the Companies
Act, 1956. Accordingly, clauses 4 (iii) (a) to 4 (iii) (d) of the Order
are not applicable.
b) According to the information and explanations given to us, the
Company has taken an unsecured loan from a Company covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount outstanding during the year is Rs.1.00 crore and the
year end balance is Rs.1.00 crore.
c) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions are
prima facie not prejudicial to the interest of the Company.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and nature of its business with regard to
the purchase of inventory and fixed assets and also for the sale of
goods and services. During the course of our audit, no major weakness
has been noticed in the internal controls.
v. The transactions as stated in clause 4 (iii) above that need to be
entered in the register maintained under Section 301 of the Companies
Act, 1956 have been so entered.
vi. The Company has not accepted deposits from the public within the
meaning of Section 58A and 58AA of the Companies Act, 1956 and the
rules framed there under.
vii. In our opinion, the Company has an internal audit system
commensurate with the size and the nature of its business.
viii. We have broadly reviewed the books of account and records
maintained by the Company relating to the generation of wind power,
pursuant to Rules made 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. We have, however, not made a
detailed examination of the records with a view to determining whether
they are accurate or complete. To the best of our knowledge and
according to the information given to us, the Central Government has
not prescribed the maintenance of cost records for any other product
manufactured by the Company.
ix. In respect of Statutory dues:
a) According to the books and records as produced and examined by us in
and also based on the Management representations, it was found that
there were no undisputed statutory dues in respect of Provident Fund,
Investor Education and Protection Fund, employees State insurance,
Income tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Cess and
other statutory dues to the extent applicable to be deposited with the
appropriate authorities during the year. According to the information
and explanations given to us, no undisputed amounts payable in respect
of the above were in arrears as at March 31st, 2010 for a period of
more than six months from the date on which they become payable.
b) According to the information and explanations given to us, there are
disputed amounts in respect of Service Tax, amounting to Rs.8.26 Lacs,
at the forum of Commissioner (Appeals) of District Of Guntur, Andhra
Pradesh, and in respect of MP VAT, amounting to Rs.29.22 Lacs, at the
forum of The Honble High Court Of Madhya Pradesh; which have not been
deposited with the appropriate authorities during the financial year.
Except for what has been stated, there are no other amounts in respect
of income tax, sales-tax, Service-tax, customs duty, wealth-tax, excise
duty and Cess, that have not been deposited with the appropriate
authorities on account of any dispute.
x. The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred cash losses during the
current financial year. However; the company had incurred a cash loss
of Rs.662.63 Lakhs, in the immediately preceding financial year.
xi. Based on our audit procedures and on the basis of information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in the repayment of dues to banks. No loans
have been taken by the Company from financial institutions.
xii. 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.
Accordingly, clause 4 (xii) of the Order is not applicable to the
Company.
xiii. In our opinion, the Company is not a Chit fund or a Nidhi/ Mutual
Benefit fund/ Society. Accordingly, Clause 4 (xiii) of the Order is
not applicable to the Company.
xiv In our opinion, the Company is not dealing in or trading in Shares,
Securities, debentures and other investments. According, Clause 4 (xiv)
of the Order is not applicable to the Company.
xv. The Company has pledged its investment in M/ s Patkari Power Pvt.
Ltd with respect to a loan availed of by M/s.Patkari Power Private
Limited from State Bank Of India. However; the terms and conditions
whereof are not prejudicial to the interest of the company.
xvi. To the best of our knowledge and belief and according to the
information and explanations given to us, no term loans were taken by
the Company during the year. Accordingly, Clause 4 (xvi) of the Order
is not applicable to the Company.
xvii. According to the information and explanations given to us and
overall examination of the balance sheet of the Company, we are of the
opinion that there are no funds raised on short -term basis that have
been used for long term investment.
xviii.During the financial year, the Company has not made preferential
allotment of shares to the Company covered under register maintained
under section 301 of the Companies Act, 1956.
xix. According to the information and explanations given to us and the
records examined by us, no debentures were issued by the Company.
Accordingly, Clause 4 (xix) of the Order is not applicable to the
Company.
xx. The Company has not raised any money by public issues during the
year. Accordingly, Clause 4 (xx) is not applicable to the Company.
xxi. To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
was noticed or reported during the year.
For Karvy & Co.
Chartered Accountants
(K.Ajay Kumar)
Partner
Place : Hyderabad (M.No.021989)
Date : 27.05.2010 Firm No.01757S
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