the Members of
AGI INFRA LIMITED
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of AGI INFRALIMITED ('the Company') which comprise the balance sheet as at March 31 2021 thestatement of profit and loss ( including other Comphrensive Income) statement of cashflow and the statement of Change in Equity for the year then ended and notes to thefinancial statemetns including a summary of significant accounting policies and otherexplanatory information( hereinafter referred to as Ind AS financial statements).
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information requires bythe Companies Act 2013 in the manner so required and give a true and fair view inconformity 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 March31 2021.
(b) In the case of the Statement of Profit and Loss (including Other ComprehensiveIncome) of the Profit for the year ended on that date;
(c) In the case of the Statement of changes in Equity of the changes in equity for theyear ended on that date: and
(d) In the case of the Cash Flow Statement of the cash flows for the year ended onthat date.
Basis for Opinion
We conducted our audit in accordance with the Standards of Auditing (SAs) specified U/s143(10) of the Companies Act 2013 ('the Act'). Our responsibilities under those Standardsare further described in the Auditor's Responsibilities for the Audit of the StandaloneIns AS Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the institute of Chartered Accoutants ofIndia together with the ethical requirements that are relevant to our audit of thestandalone Ind AS financial statements under the provisions of the Companies Act 2013 andthe rules thereunder and we have fulfilled our other ethical responsibilties inaccordance with these requirements and the Code of Ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion on the Standalone Ind AS Financial Statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone Ind AS financial statements for the financialyear ended March 31 2021. These matters were addressed in the context of our audit of thestandalone Ind AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. We have determined the mattersdescribed below to be the key audit matter to be communicated in our report
|Key Audit Matters Description ||Auditor's Reponse to Key Audit Matter |
|A. Revenue Recognition :- ||We have planned & performed the following procedures:- |
|The company's revenue is principally derived from the sale of flats plots and the revenue is recognized when the control of the goods has passed to the buyers. We idenitified revenue recognition as a key performance indicator. ||i) Evaluated the process followed by the management for revenue recognition including understanding and testing of key controls related to recognition of revenue in correct period. |
| ||ii) Revenue on Sale of Flats are recognised when the Control of the goods are passed to the buyers while the other incomes are recognised as and when due. |
|B. Inventory record and existence:- ||i) Assessed whether the management's internal controls relating to inventory's valuation are appropriately designed and implemented. |
|There are complexities and manual process involved in determining inventory quantities in hand and valuation of the same due to the Company's presence across different locations within the country diverse & numerous inventory products and work in progress at different stages of the processes at various manufacturing units. Accordingly invenory quantities and valuation is identified as a key audit matter. ||ii) Disuss with the management on the management's process in identifying the stages of completion and valuing work in progress stock at the time of book closure process. |
| ||iii) Verification of the correctness of valuation made by the management on a sample basis with regard to the cost and net realiable value of inventory. |
| ||We have been able to conclude that revenue has been recognised in accordance with the revenue recognition policy and accounting standards. |
|Property Plant and Equipment (PPE) || |
|The Company has commissioned its new manufacturing facility with 600 TPD grinding capacity in Punjab. The project has been capitalized and depreciation has been claimed on addition Property Plant and Equipment (PPE). Any inappropriate timing of capitalization of the project and /or classification of categories of items of PPE may result in material misstatement of capital work in progress /PPE with a consequent impact on depreciation charge and results for the year. ||Our Audit procedures included implementation and operating effectiveness of controls in respect of review of capital WIP particularly in respect of timing of the capitalization and recording of additions to items of various categories of PPE with source documentation to determine. We test checked the source documentation to determine whether the expenditure is of capital nature and has been appropriately approved and segregated into appropriate categories of PPE with the necessary appointment of the pre -operative expenses etc. for capitalization |
|Impact of COVID-19 || |
|As there are significant judgments involved in the assessment of whether the assumptions made regarding the duration and the impact of the Covid -19 Pandemic on the company on various fronts the uncertainties related to COVID -19 are considered a key audit matter . ||We critically evaluated the management assessment on the impact of Covid -19 on the Company on: |
| ||The Operationalization of its new manufacturing facilities. General operations of the company. |
| ||In meeting its financial commitments. |
| ||-During our evaluation it was found that the operationalization of the new construction facility of the company got delayed by around 6 Months due to the Nationwide Lockdown / Curfew amid COVID and various other factors beyond Company's control. The business operation of the Company also got disrupted during the first two quarters of FY21.However the company had a fair come back in the second half of FY21. It is really appreciable that the company has remained prompt in meeting all its financial commitments including the timely repayments of terms loans/ serving of periodic interest etc. |
| ||- We also evaluate management's assessment of COVID -19 related risks for the company's business and financial resources compared with our own understanding of these risks. We considered management's plans to mitigate these risks. |
| ||- We also evaluated the assumptions in respect of available projected future forecasts made by management for reasonableness based on the current market conditions and developments within the company. |
Management's Responsibility for the Standalone Ind AS Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 with respect to the preparation of these standalone IndAS financial statements that give a true and fair view of the financial positionfinancial performance changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonbale and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accouting recordsrelevant to the preparation and presentation of the financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.
In preparing the financial statements the Board of Directors is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so.
The Board of Directos are also responsible for over seeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectivies are to obtain reasonable assurance about whether the Ind AS financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these stand alone Ind AS financial statements.
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 standalone Ind ASfinancial 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 invlovecollusion forgery intentional omissions misrespresntations or the over ride of internalcontrol.
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 the adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accouting policies used and the resonableness ofaccouting estimates and related disclosures made 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 uncertainityexists we are required to draw attention in our auditor's report to the relateddisclosures in the standalone Ind AS financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the standalone IndAS financial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
We communicate with those who charge 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.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charges with governance we determine thosematters that were of most signficance in the audit of the standalone Ind AS financialstatements of the current period and are thereofore the key audit matters. We describethese matters in our auditor's report unless law or regulations precludes pulic disclosureabout the matter or when in extermely 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
1. As required by the Companies (Auditor's Report) Order 2016 ('the Order') issued bythe Central Government of India in terms of sub-section (11) of Section 143 of theCompanies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the said 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 thebest 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 theCompany so far as it appears from our examination of those books.
(c) . The Balance Sheet the Statement of Profit and Loss the Statement of change inEquity and the cash flow statement dealt with by this Report are in agreement with therelevant books of account.
(d) . In our opinion the aforesaid standalone Ind AS financial statements comply withthe Ind As 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 on March31 2021 taken on record by the Board of Directors none of the Directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164(2) of theAct.
(e) . With repect to the adquacy of internal financial controls over financialreporting of the Company and operating effectiveness of such controls refer to ourseparate Report in "Annexure B".
(f) . In our opinion the managerial remuneration for the year ended March 31 2021has been paid/ provided by the Company to its directors in accordance with the provisionsof section 197 read with Schedule V to the Act; and
(g) . With respect to the other matters to be included in the Auditor's Report inaccordance with the Rule 11 of the Companies (Audit and Auditor's) Rules 2014 in ouropinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the imact of pending litigations on its financial positionin its financial statements as referred to note to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable lossess.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
Annexure A to the Independent Auditors' Report
The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the standalone Ind AS financial statements for the year ended March 31 2021.
we report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) .The Management of the company has physically verified the fixed assets inaccordance with its policy of physical verification at reasonable intervals. Thediscrepancies if any noticed during such verification have been suitably adjusted in thebooks of account. In our opinion this periodicity of physical verification is reasonablehaving regard to the size of the Company and then a true of its assets.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the company the title deeds of immovable properties areheld in the name of the company.
(ii) (a).According to the information and explanations given to us the management hasconducted physical verification of the inventories at reasonable intervals.
(b) .In our opinion and according to the information and explanations given to us theprocedures followed by the management for physical verification of inventory arereasonable and adequate in relation to the size of the Company and then a true of thebusiness.
(c) . No material discrepancies have been noticed on physical verification of thestocks as compared to book records in so far as it appears from our examination of thebooks.
(iii) .In our opinion and according to the information and explanations given to usthe company has not granted/taken any loans secured or unsecured to/from companiesfirms Limited Liability Partnerships or other parties covered in the register maintainedunder section 189 of the Companies Act 2013.
iv) In our opinion and according to the information and explanations given to us thereis no loan to any director including entities in which the directors are interested. So the provisions of Section 185 and 186 of the Act with respect to the loans and advancesgiven investments made and guantees and securities given are not applicable to theCompany.
v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public.
vi) The Central Government has prescribed the maintenance of accounts and cost recordsunder section 148(1) of the Companies Act 2013 which has been duly complied by theCompany.
(a) According to the records of the Company undisputed statutory dues includingprovident fund employees 'state insurance income-tax sales-tax goods and service taxservice tax duty of customs duty of excise value added tax cess and any otherstatutory dues have been regularly deposited with the appropriate authorities. Asexplained to us the Company did not have any outstanding dues on account of employees 'state insurance. According to the information given to us no undisputed amount is payablein respect of Provident Fund Income Tax Goods and Service Tax Duties of Customs Cessand other material specially dues were in arrear as at 31.03.2021 for a period of morethan six months from the date they become payable.
(b) According to the records of the Company and information and explanations given tous and the records of the Company examined by us the company has disputed liabilitiesnot provided as expense in the accounts comprise of Rs. 106356953/-there are nodisputed dues to be deposited in respect of goods service tax or duty of customs or dutyof excise or value added tax on account of any disputes.
Following are disputed dues regarding Service tax:
|Name of the Statute ||Nature of the Dues ||Amount (') ||Period to which the amount relates ||Forum where dispute is pending |
|Service Tax Act ||Under Rule 6(3) of Income Tax ||96907955/- ||2012-13 to 2016-17 ||Custom Excise and Service Tax Tribunal Chd. |
|PVAT ||Assessment Order ||9448998/- ||2011-12 ||Hon'ble High Court of Punjab & Haryana |
(vii) On the basis of our examination of the books and according to the information andexplanations given to us during the year there are no defaults in repayment of dues tofinancial institutions banks Government or debenture holders.
(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to financialinstitutions banks and government. The debenture interest is also paid regularly. Duringthe year the company has got redeemed the Debentures to the tune of Rs. 1 Crores.
(ix) The term loans have been applied for the purpose for which they were obtained.During the year the company has not raised moneys by way of initial public offer orfurther public offer (including debt instruments).
(x) According to the information and explanations given to us no material fraud by thecompany or on the Company by its officers or employees has been noticed or reported duringthe year.
(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with 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. Accordingly paragraph 3(xii) of the Order is notapplicable.
(xiii) According to the information and explanations given to us and on the based onour examination of the records of the company all transactions with the related partiesare in compliance with sections 177 and 188 of the Companies Act 2013 where applicableand details of such transactions have been disclosed in the Financial Statements asrequired by the applicable accounting standards.
(xiv) According to the information and explanations given to us and based on ourexamination of the records of the company the company has made any preferential allotmentshares at a price Rs. 53/- per share including the share premium of Rs. 43/- per shareamounting to Rs. 10.60 Crores. No debt instrument other than the preferential allotmentwas issued during the year.
(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 directors or persons connected with them. Accordingly paragraphs 3(xv)of the order is not applicable.
(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 Auditors' Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of AGI InfraLimited ("the Company") as on 31st March 2021 in conjunction withour audit of the standalone Ind AS financial statements of the Company for the year endedon that date.
Management's Responsibility for Internal Financial Controls
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 (ICAI)". Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the company's policies the safeguardingof its assets prevention and detection of frauds and errors the accuracy and thecompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
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 on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofinternal 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 of thematerial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion to the Company's internal financial controlsfinancial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) .provide the reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directions of the company; and
(3) .provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting the possibility of collusion or improper management override of controlsmaterial misstatements due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of internal financial controls over financial reporting tofuture periods are subject to the risk that the internal financial control over financialreporting may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.
In our opinion having regard to the size of the Company and its operation the Companyhas in all material respects an adequate internal financial controls system overfinancial reporting and such financial controls over financial reporting were operatingeffectively as at March 31 2021 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India.
| ||FOR H.S MAKKAR & CO CHARTERED ACCOUNTANTS |
| ||FIRM REGISTRATION NO. 016971N |
| ||Sd- |
| ||H.S MAKKAR(F.C.A) |
|Place : Jalandhar ||PROPRIETOR Membership number:098167 |
|Date :28.06.2021 ||UDIN: 21098167AAAADJ8046 |