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Agarwal Industrial Corporation Ltd.

BSE: 531921 Sector: Industrials
NSE: AGARIND ISIN Code: INE204E01012
BSE 00:00 | 27 May 525.80 21.55
(4.27%)
OPEN

513.65

HIGH

537.65

LOW

513.35

NSE 00:00 | 27 May 526.20 21.45
(4.25%)
OPEN

514.25

HIGH

538.00

LOW

510.10

OPEN 513.65
PREVIOUS CLOSE 504.25
VOLUME 74513
52-Week high 730.00
52-Week low 201.20
P/E 18.01
Mkt Cap.(Rs cr) 695
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 513.65
CLOSE 504.25
VOLUME 74513
52-Week high 730.00
52-Week low 201.20
P/E 18.01
Mkt Cap.(Rs cr) 695
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Agarwal Industrial Corporation Ltd. (AGARIND) - Auditors Report

Company auditors report

To The Members of Agarwal Industrial Corporation Limited

Report on the Standalone Financial Statements

1. We have audited the Standalone Financial Statements of Agarwal IndustrialCorporation Limited ("the Company") which comprise the Standalone Balance Sheetas at March 31 2021 and the Standalone Statement of Profit and Loss (including othercomprehensive income) the Standalone Statement of Changes in Equity and the StandaloneStatement of Cash Flows or the year then ended and notes to the Standalone FinancialStatements including a summary of significant accounting policies and other explanatoryinformation.

2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2021 and its profit and othercomprehensive income the changes in equity and its cash flows for the year ended on thatdate.

Basis of Opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the Standalone Financial Statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion on the Standalone Financial Statements.

Key Audit Matters

4. Key audit matters are those matters that in our professional judgment were of mostsignificance 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 FinancialStatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

5. The Key Audit Matter How was the matter addressed in our audit
Revenue is one of the key profit drivers and is therefore susceptible to misstatement. Cut-off is the key assertion insofar as revenue recognition is concerned since an inappropriate cut-off can result in material misstatement of result for the year. Our audit procedures with regard to revenue recognition included testing controls automated and manual around dispatches / deliveries inventory reconciliations and circularization of receivable balances substantive testing of cut-off and analytical review procedure.

Information other than the financial statements and auditors' report thereon

6. The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance but does not include the Standalone FinancialStatements and our Auditor's Report thereon. The Annual report is expected to be madeavailable to us after the date of this auditor's report.

7. Our opinion on the Standalone Financial Statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

8. In connection with our audit of the Standalone Financial Statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the Standalone Financial Statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated. If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Management's Responsibility for the Standalone Financial Statements

9. The Company's management and Board of Directors are responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these StandaloneFinancial Statements that give a true and fair view of the state of affairs profit andother comprehensive income changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under Section 133 of the Act. This responsibilityalso includes the maintenance of adequate accounting records in accordance with theprovision of the Act for safeguarding the assets of the Company and for preventing anddetecting the frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Standalone FinancialStatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

10. In preparing the Standalone Financial Statements management and Board of Directorsare responsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. The Board of Directors is alsoresponsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

11. Our objectives are to obtain reasonable assurance about whether the StandaloneFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone Financial Statements.

12. As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also :

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrols.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the Standalone Financial Statementsmade by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the StandaloneFinancial Statements including the disclosures and whether the Standalone FinancialStatements represent the underlying transactions and events in a manner that achieves fairpresentation.

13. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

14. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

15. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the standalone financialstatements of the current period and are therefore the key audit matters. We describethese matters in our Auditor's Report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on other Legal and Regulatory Requirements

16. As required by section 197(16) of the Act we report that the Company has paidremuneration to its directors during the year in accordance with the provisions of andlimits laid down under section 197 read with Schedule V to the Act.

17. 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 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

18. 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 bestof 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 theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including other comprehensiveincome the Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards (Ind AS) specified under Section 133 of the Act.

e) On the basis of written representations received from the directors as on 31 March2021 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 2021 from being appointed as a director in terms of Section 164(2) of theAct.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B".

g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of Companies (Audit and Auditors) Rules 2014 in our opinion andto the best of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigations as at 31 March 2021 onits financial position in note no. 35 of its standalone financial statements;

ii) The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses; and

iii) There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

ANNEXURE A TO INDEPENDENT AUDITOR'S REPORT

Referred to as ‘Annexure A' in paragraph 17 of the Independent Auditors' Report ofeven date to the members of Agarwal Industrial

Corporation Limited on the Standalone Financial Statements for the year ended on 31stMarch 2021 we report that:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of

fixed assets including property plant and equipment and investment property.

(b) The fixed assets including property plant and equipment and investment propertyhave been physically verified by the management during the year under a regular program ofverification which in our opinion is reasonable having regard to the size of the companyand the nature of its assets. No discrepancies were noticed on such verification.

(c) According to the information and the explanation given to us and the recordsexamined by us we report that the title deeds of immovable properties are held in thename of the Company as at the Balance Sheet date.

(ii) As explained to us the inventories except stock-in-transit were physicallyverified during the year by the management. In our opinion the frequency of suchverification is reasonable and no material discrepancies were noticed on such physicalverification.

(iii) The Company has granted unsecured loan to one Overseas Wholly Owned Subsidiarycovered in the register maintained under section 189 of the Companies Act 2013 (‘theAct').

(a) In respect of aforesaid loan granted the terms and condition under which suchloans are granted are not prejudicial to the interest of the company.

(b) In respect of aforesaid loan granted to Wholly Owned Subsidiary by the Companythere is no schedule of repayment of interest and principle and the same have been repaidwhen demanded by the Company.

(c) There are no overdue amounts for more than ninety days or more in respect of theunsecured loan granted to the body corporate by the Company.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans granted guarantee provided and investments made. The company has notprovided any security in connection with loan to any other body corporate or person.

(v) In our opinion and according to the information given to us the company has notaccepted deposits and hence compliance with the directives issued by Reserve Bank ofIndia and the provisions of sections 73 to 76 or any other relevant provisions of the Actand the rules framed there under with regard to the deposits accepted is not applicable.

(vi) We have broadly reviewed the books of accounts maintained by the Company pursuantto the Rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Act in respect of Company's products/services and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained.However we have not made a detailed examination of the records with a view to determinewhether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the

Company the Company is regular in depositing with appropriate authorities applicableundisputed statutory dues including employee state insurance income tax goods andservices tax duty of custom profession tax cess and any other material statutory duesas applicable.

(b) According to the information and explanation given to us no undisputed amountspayable in respect of employee state insurance income tax goods and services tax dutyof custom profession tax or cess any other material statutory dues as applicable were inarrears as at 31st March 2021 for a period of more than six months from thedate they became payable.

(c) According to the information and explanation given to us details of income taxsales tax service tax duty of custom duty of excise value added tax or cess which havenot been deposited as on 31st March 2021 on account of any dispute are asgiven below:

Name of Statute Nature of the dues Unpaid disputed Amount (in Lacs) Period for which the amount relates Forum where dispute is pending
The Karnataka Tax on Entry of Goods Act 1979 Tax on Entry of Goods Demand 15.49 April 2012 to March 2016 CESAT Appellate Tribunal
The Income Tax Act 1961 Income Tax Demand 20.25 A.Y. 2003-04 Rectification pending before Assessing Officer
The Income Tax Act 1961 Income Tax Demand 17.50 A.Y. 2004-05 Rectification pending before Assessing Officer
The Income Tax Act 1961 Assessment Dues 4.97 A.Y. 2008-09 On Appeal the matter have been set aside to the file of assessing officer by the Income Tax Appellate Tribunal with guidelines for disallowances
The Income Tax Act 1961 Assessment Dues 23.61 A.Y. 2009-10 ~do~
The Income Tax Act 1961 Assessment Dues 24.89 A.Y. 2010-11 -do-
The Income Tax Act 1961 Assessment Dues 37.56 A.Y. 2011-12 ~do~
The Income Tax Act 1961 Assessment Dues 35.43 A.Y. 2013-14 Commissioner of Income Tax (Appeal)
The Income Tax Act 1961 Assessment Dues 22.39 A.Y. 2014-15 ~do~
The Income Tax Act 1961 Income Tax Demand 15.34 A.Y. 2015-16 Rectification pending before Assessing Officer
The Income Tax Act 1961 Income Tax Demand 147.19 A.Y. 2016-17 ~do~
The Income Tax Act 1961 Income Tax Demand 75.21 A.Y. 2017-18 Rectification pending before the AO to give credit of remaining taxes & Appeal before Commissioner of Income Tax (Appeal) against disallowances ofRs. 1067459/- made by AO.
Local Body Tax LBT Demand 11.29 Jan to March 2017 In response to Writ Petition filed the Hon. High Court have stayed the Demand.

(viii) In our opinion and according to the information and explanation given to us thecompany has not defaulted in the repayment of loans or borrowings to Banks or FinancialInstitutions. The Company does not have any borrowings from government and has not issuedany debentures.

(ix) The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year; On the basis of ourexamination we are of the opinion that the term loans were utilized for the purpose forwhich the term loans were obtained.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

(xi) According to the information and explanation give to us and based on ourexamination of the records of the Company the Company has paid or provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with the Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company; hence clause 3(xii) of the Companies (Auditors' Report)Order 2016 is not applicable to the Company.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with the sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Standalone Financial Statements as required byIndian Accounting Standard (Ind AS) 24 "Related Party Disclosure" specifiedunder section 133 of the Act.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year hence; clause 3(xiv) ofthe Companies (Auditors' Report) Order 2016 are not applicable to the Company.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with the directors or the persons connected to its directors; hence clause3(xv) of the Companies (Auditors' Report) Order 2016 is not applicable to the Company.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

Referred to as ‘Annexure B' in paragraph 18(f) of the Independent Auditors' Reportof even date to the members of Agarwal

Industrial Corporation Limited on the standalone financial statements for the yearended on 31st March 2021.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013

("the Act")

1. We have audited the internal financial controls over financial reporting of AgarwalIndustrial Corporation Limited ("the Company") as on 31st March 2021in conjunction with our audit of the standalone financial statements of the Company forthe year ended on that date.

Management's Responsibility for Internal Financial Controls

2. The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ("the Guidance Note").These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note and the Standards on Auditing issued by ICAI and prescribed undersection 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls over financial reporting. Those Standards and the GuidanceNote require that we comply with the ethical requirements and plan and perform the auditto obtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standalonefinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the standalonefinancial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7. Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion to the best of our information and according to the explanationsgiven to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31st March 2021 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For Ladha Singhal & Associates
Chartered Accountants
Firm Registration No.: 120241W
(Ajay Singhal)
Partner
M. No.: 104451
UDIN : 21104451AAAAEE2078
Place: Mumbai
Dated: 15lh June 2021

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