The Members of
Agro Phos India Limited
Report on the Financial Statements
We have audited the financial statements of Agro Phos IndiaLimited ("the Company") which comprise the Balance sheet as at 31st March 2021and the statement of Profit and Loss (including other comprehensive income) statement ofchanges in equity and statement of cash flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information.
In our opinion and to the best of our information and accordingto the explanations given to us the aforesaid financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith accounting principles generally accepted in India of the state of affairs of thecompany as at 31 st March 2021 and its profit (including other comprehensiveincome) the changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Companies Act 2013. Ourresponsibilities under those Standards are further described in theAuditor'sResponsibilities for the Audit of the Ind AS Financial Statements section of ourreport. We are independent of the Company in accordance with the Code ofEthics issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of theCompanies Act 2013 and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.
Key Audit Matters
Key audit matters are those matters that in our professionaljudgment were of most significance in our audit of the financial statements of thecurrent period. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
|Key Audit Matters ||Auditor's Response |
| || |
|Evaluation of uncertain tax positions ||Our audit procedures include the following substantive procedures: |
|The Company operates in multiple jurisdictions and is subject to periodic challenges by local tax authorities on a range of tax matters during the normal course of business including direct and indirect tax matters. These involve significant management judgment to determine the possible outcome of the uncertain tax positions consequently having an impact on related accounting and disclosures in the financial statements. ||Obtained understanding of key uncertain tax positions; and |
| ||We along with our internal tax experts - |
| ||Read and analysed select key correspondences external legal opinions / consultations by management for key uncertain tax positions; |
| ||Discussed with appropriate senior management and evaluated management's underlying key assumptions in estimating the tax provisions; and |
| ||Assessed management's estimate of the possible outcome of the disputed cases |
Information Other than the Financial Statements and Auditor'sReport Thereon
The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Management Discussion and Analysis Board's Report including Annexures to
Board's Report Business Responsibility Report CorporateGovernance and Shareholder's Information but does not include the financial statementsand our auditor's report thereon.
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated.
If based on the work we have performed we conclude that thereis 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 Financial Statements
The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these financial statements that give a true and fair view of thefinancial position financial performance changes in equity and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate implementationand maintenance of accounting policies; making judgments and estimates that are reasonableand prudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the financial statements management is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the FinancialStatements
Our objectives are to obtain reasonable assurance about whetherthe financial statements as a whole are free from material misstatement whether due tofraud or error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
As part of an audit in accordance with SAs we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:
a. Identify and assess the risks of material misstatement of thefinancial 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 internalcontrol.
b. Obtain an understanding of internal financial controlsrelevant to the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.
c. Evaluate the appropriateness of accounting policies used andthe reasonableness of accounting estimates and related disclosures made by management.
d. Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in th financial statements or if such disclosures are inadequateto modify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.
e. Evaluate the overall presentation structure and content ofthe financial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regardingamong other matters the planned scope and timing of the audit and significant auditfindings including any significant deficiencies in internal control that we identifyduring our audit.
We also provide those charged with governance with a statementthat we have complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governancewe determine those matters that were of most significance in the audit of the 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
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 Companies Act 2013 we give in the Annexure A a statement onthe 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 andexplanations which to the best of our knowledge and belief were necessary for the purposesof our audit.
b. In our opinion proper books of account as required by lawhave 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 (includingOther Comprehensive Income) Statement of Changes in Equity and the Statement of Cash Flowdealt with by this Report are in agreement with the books of account.
d. In our opinion the aforesaid Financial Statements comply withthe Accounting Standards specified under Section 133 of the Act read with Companies(Indian Accounting Standard) Rules 2015 as amended.
e. On the basis of the written representations received from thedirectors as on 31st March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2021 from being appointed as a director interms of Section 164 (2) of the Act.
f. With respect to the adequacy of the internal financialcontrols over financial reporting of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".
g. With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014 in our opinion and to the best of our information and according to the explanationsgiven to us:
i. The Company has disclosed the impact of pending litigations onits financial position in its Financial Statements - Refer Note 35 to the financialstatements;
ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required tobe transferred to the Investor Education and Protection Fund by the Company.
h. With respect to the matter to be included in the Auditors'Report under Section 197(16) of the Act In our opinion and according to the informationand explanations given to us the remuneration paid by the Company to its directors duringthe current year is in accordance with the provisions of Section 197 read with schedule Vto the Act. For Ashok Khasgiwala & Co. LLP
Annexure A to Independent Auditor's Report
Referred to in paragraph (1) under the heading of "Report onOther Legal and Regulatory Requirements" of our report of even date to the members ofAgro Phos India Limited on the Financial Statements for the year ended 31st March 2021.
i. In respect of its Fixed Assets :
a. The Company is maintaining proper records showing fullparticulars including quantitative details and situation of fixed assets.
b. The company has a program of verification to cover all theitems of fixed assets in a phased manner which in our opinion is reasonable having regardto the size of the Company and the nature of its assets. Pursuant to the program certainfixed assets were physically verified by the management during the year and no materialdiscrepancies have been noticed on such verification. In our opinion the frequency ofverification is reasonable.
c. According to the information and explanations given to us andon the basis of our examination of the records of the Company the title deeds ofimmovable properties are held in the name of the Company.
ii. In respect of its Inventories:
The inventories has been physically verified by the Managementduring the year. In our opinion the frequency of verification is reasonable and nomaterial discrepancies were noticed.
iii. According to the information and explanations given to usthe Company has not granted loans secured or unsecured to company firms LLP or otherparties covered in the register maintained under section 189 of the Companies Act 2013.In our opinion provisions of para 3 clause (iii) of the order are not applicable to thecompany.
iv. In our opinion and according to the information andexplanations given to us the Company has not granted any loan or made any investment orgiven any guarantee or provided any security in terms of section 185 and 186 of the Act.In our opinion provisions of para 3 clause (iv) of the order are not applicable to thecompany.
v. In our opinion and according to the information andexplanations given to us the Company has not accepted deposits from the public within themeaning of Section 73 to 76 or any other relevant provisions of the Companies Act 2013and the Rules framed there under. As informed to us no Order has been passed by theCompany Law Board or National Company Law Tribunal or Reserve Bank of India or any courtor any other Tribunal.
vi. We have broadly reviewed the cost records maintained by theCompany pursuant to the rules made by the Central Government under sub-section (1) ofSection 148 of the Companies Act 2013 and are of the opinion that prima facie theprescribed records have been made and maintained. We have however not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.
vii. In respect of Statutory dues :
a) According to the information and explanations given to us andthe records of the Company examined by us in our opinion the Company is generally regularin depositing undisputed statutory dues including provident fund employee's stateinsurance income tax goods and service tax duty of customs Cess and any otherstatutory dues as applicable with the appropriate authorities. There were no undisputedstatutory dues in arrears as at 31st March 2021 for a period of more than sixmonths from the date they became payable except Property tax amounting to Rs. 0.60 lacsrelated to 2013-14 to 2019-20 and Professional Tax Rs. 0.16 lacs related to 2020-21 isoutstanding for more than six months not deposited.
b) According to the information and explanations given to usthere are no dues of income tax or service tax or goods and service tax or duties ofcustoms or duties of excise or value added tax which have not been deposited withappropriate authorities on account of any dispute except sales tax demand as under.
|Name of the Statute ||Nature N)f Liability ||# (Amount in Lacs) ||Related Period ||Forum where dispute is pending |
|Central Sales Tax Act 1956 ||Central Sales Tax ||19.20 ||2016-17 ||The Dy. Commissioner Appeal Indore |
# Note : Net off Rs. 2.22 lacs deposited.
viii. According to the records of the company examined by us andas per the information and explanations given to us the Company has not defaulted inrepayment of loans and borrowings to a financial institution bank or government as on thebalance sheet date. The Company has not issued any debenture.
ix. In our opinion and according to the information andexplanations given to us the company has not raised money by way of initial public offeror further public offer (including debt instruments) and in our opinion and according tothe information and explanations given to us the term loan has been applied for thepurpose for which they were raised.
x. According to the information and explanations given to us andto the best of our knowledge no material fraud by the Company or on the company by theofficers or employees has been noticed or reported during the year.
xi. According to the information and explanations given to us andbased on our examination of the records of the Company the Company has paid / providedfor managerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Act.
xii. In our opinion and according to information and explanationgiven to us the company is not a Nidhi Company therefore the provision of para 3 (xii)of the Order is not applicable to the company.
xiii. According to the information and explanations given to usand based on our examination of the records of the Company transactions with the relatedparties are in compliance with sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the Financial Statements as requiredby the applicable accounting standards.
xiv. According to the information and explanations given to usand based on our examination of the records of the company the company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year therefore the provision of para 3 (xiv) of the Order is notapplicable to the company.
xv. In our opinion and according to the information andexplanations given to us the company has not entered into any non-cash transactions withdirectors or persons connected with him during the year hence the provision of para 3(xv) of the Order is not applicable to the company.
xvi. The company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934 therefore the provision of para 3 (xvi) ofthe Order is not applicable to the company for the year under audit.
Annexure B to the Independent Auditor's Report of even date onthe Financial Statements of Agro Phos India Limited
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financialreporting of Agro Phos India Limited ("the Company") as of March 31 2021 inconjunction with our audit of the 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 andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India. 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 company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the Financial Statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company's internalfinancial controls over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reportingis a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financialcontrol over financial reporting includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls overFinancial Reporting
Because of the inherent limitations of internal financialcontrols over financial reporting including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols over financial reporting to future periods are subject to the risk that theinternal financial control over financial reporting may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate. Opinion
In our opinion the Company has in all material respects anadequate internal financial controls over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2021 basedon the 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.