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Agro Tech Foods Ltd.

BSE: 500215 Sector: Industrials
NSE: ATFL ISIN Code: INE209A01019
BSE 00:00 | 27 May 841.90 23.35
(2.85%)
OPEN

821.15

HIGH

854.00

LOW

821.15

NSE 00:00 | 27 May 842.60 23.50
(2.87%)
OPEN

820.05

HIGH

850.00

LOW

820.05

OPEN 821.15
PREVIOUS CLOSE 818.55
VOLUME 382
52-Week high 1149.75
52-Week low 793.50
P/E 83.44
Mkt Cap.(Rs cr) 2,052
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 821.15
CLOSE 818.55
VOLUME 382
52-Week high 1149.75
52-Week low 793.50
P/E 83.44
Mkt Cap.(Rs cr) 2,052
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Agro Tech Foods Ltd. (ATFL) - Auditors Report

Company auditors report

TO THE MEMBERS OF AGRO TECH FOODS LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of AgroTech Foods Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2021 and the Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2021and its profit total comprehensive income its cash flows and the changes in equity forthe year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing specified under Section 143(10) of the Act(SAs). Our responsibilities under those Standards are further described in theAuditor's Responsibility for the Audit of the Standalone Financial Statements sectionof our report. We are independent of the Company in accordance with the Code of Ethicsissued by the Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Srl. Key Audit Matter Auditor's Response
1 Revenue recognition – Sale of goods Refer Note 3 (h) "Revenue Recognition" of the Standalone Financial Statements under Significant Accounting Policies. We have performed the following principal audit procedures in relation to revenue recognised which include a combination of testing internal controls and substantive testing as under:
• Assessing the appropriateness of the Company's revenue recognition accounting policies in line with Ind AS 115 ("Revenue from Contracts with Customers") and testing thereof.
Revenue from sale of goods is recognised when control of the products being sold is transferred to the customer which is mainly upon delivery and when there are no longer any unfulfilled obligations.
• Evaluating the integrity of the general information and technology ("IT") control environment and testing the operating effectiveness of key IT application controls.
The timing of revenue recognition is relevant to the reported performance of the Company. The Management considers revenue as a key measure for evaluation of performance. There is a risk of revenue being recorded before control is transferred.
• Understanding the revenue recognition process evaluating the design and implementation of Company's controls in respect of revenue recognition.
• Testing the effectiveness of such controls over revenue cut-off at year end.
• Testing the supporting documentation for sales transactions recorded during the period closer to the year end and subsequent to the year end including examination of credit notes issued subsequent to the year end to determine whether revenue was recognised in correct period.
• Performing analytical procedures on current year revenue based on monthly trends and where appropriate conducting further enquiries and testing
2 Assessment of impairment in the investment in a subsidiary We have performed the following principal audit procedures including involving our valuation specialists in relation to assessment of impairment of investment in Agro Tech Foods (Bangladesh) Pvt. Ltd:
The Company has investments in subsidiaries and the Management assessed that there are impairment indicators in respect of its investment in Agro Tech Foods (Bangladesh) Pvt. Ltd.
• Assessed whether the methodology established by Management to identify indicators of impairment identifying the Cash Generating Unit (CGU) to which such investment belongs and the quantification thereof was appropriate.
Accordingly the Management estimated the recoverable value of investment in Agro Tech Foods (Bangladesh) Pvt. Ltd. the carrying value of which as at March 31 2021 is `158.59 million.
• Evaluated the design and implementation of control relating to Management's estimation of recoverable amount of the CGU.
The evaluation of the recoverable amount involves determination of the most appropriate valuation method and the inputs used in the valuation model (also refer Note 7 of the standalone financial statements).
• Evaluated the Management's valuation method used and the accuracy of the inputs used in the model to determine the recoverable value.
• Evaluated the inputs used to assess their reasonableness tested the sensitivity of the recoverable value to the change in the inputs used and tested the arithmetical accuracy of the model.

Information Other than the Financial Statements and Auditor'sReport Thereon

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Report of theDirectors and Management Discussion & Analysis but does not include the consolidatedfinancial statements standalone financial statements and our auditor's reportthereon.

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

ii. 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.

iii. If based on the work we have performed. we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Standalone FinancialStatements

The Company's Board of Directors is responsible for the mattersstated in section134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance including other comprehensive income cash flows and changes in equity of theCompany in accordance with the Ind AS and other accounting principles generally acceptedin India. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management isresponsible 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.

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

Auditor's Responsibility for the Audit of the Standalone FinancialStatements

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

• Obtain an understanding of internal financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Undersection143(3)(i) of the Act we are also responsible for expressing our opinion on whetherthe Company 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 made by the management.

• Conclude on the appropriateness of management's use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone 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 conditionsmay cause the Company to cease to continue 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.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin (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 financialstatements.

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

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

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit wereport 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 Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as 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.

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 A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controlsover financial reporting.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of Section 197(16) of the Act as amended in our opinionand to the best of our information and according to the explanations given to us theremuneration paid/provided by the Company to its directors during the year is inaccordance with the provisions of Section 197 of the Act.

h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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

2. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government in terms of Section 143(11) of the Act wegive in "Annexure B" a statement on the matters specified in paragraphs 3 and 4of the Order.

For Deloitte Haskins & Sells LLP
Chartered Accountants
(F.R.N. 117366W/W-100018)
Sumit Trivedi
Partner
Membership No. 209354
UDIN: 21209354AAAAFU3787
Place : Secunderabad
Date : April 29 2021

ANNEXURE - A TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financialreporting of Agro Tech Foods Limited ("the Company") as of March 31 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

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 safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting of the Company based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") issued by the Instituteof Chartered Accountants of India and the Standards on Auditing prescribed under Section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system 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 judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally 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 financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2021 based on thecriteria for internal financial control over financial reporting established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

For Deloitte Haskins & Sells LLP
Chartered Accountants
(F.R.N. 117366W/W-100018)
Sumit Trivedi
Partner
Membership No. 209354
UDIN: 21209354AAAAFU3787
Place : Secunderabad
Date : April 29 2021

ANNEXURE-B TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date)

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

(b) The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanation given to us no material discrepancies were noticed on suchverification.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed provided to us we reportthat the title deeds comprising all the immovable properties of land and buildings whichare freehold are held in the name of the Company as at the balance sheet date.

In respect of immovable properties of land and buildings that have been taken on leaseand disclosed as right of use assets in the financial statements the lease agreements arein the name of the Company where the Company is the lessee in the agreement except forimmovable property of land at Jhagadia admeasuring 100000 sq. mtrs. having a carryingvalue of ` 58.88 million as at March 31 2021 in respect of which the lease deed ispending execution.

(ii) As explained to us the inventories were physically verified during the year bythe Management at reasonable intervals and no material discrepancies were noticed onphysical verification.

(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Companies Act 2013.

(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 Companies Act 2013in respect of grant of loans making investments and providing guarantees and securitiesas applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposit falling within the purview of the provisions of Section 73 to 76 ofthe Companies Act 2013.

There are no unclaimed deposits.

(vi) The maintenance of cost records has been specified by the Central Government underSection 148(1) of the Companies Act 2013 for manufacture of edible oils. We have broadlyreviewed the cost records maintained by the Company pursuant to the Companies (CostRecords and Audit) Rules 2014 as amended prescribed by the Central Government undersub- section (1) of Section 148 of the Companies Act 2013 and are of the opinion that primafacie the prescribed cost records have been made and maintained. We have howevernot made a detailed examination of the cost records with a view to determine whether theyare accurate or complete.

(vii)According to the information and explanations given to us in respect of statutorydues:

(a) The Company has been regular in depositing undisputed statutory dues includingProvident Fund Employees' State Insurance Income- tax Sales Tax Service TaxCustoms Duty Excise Duty Value Added Tax cess and other material statutory duesapplicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident FundEmployees' State Insurance Income-tax Sales Tax Service TaxCustoms Duty ExciseDuty Value Added Tax cess and other material statutory dues in arrears as at March 312021 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax Sales Tax Service Tax CustomsDuty Excise Duty and Value Added Tax which have not been deposited as on March 31 2021on account of disputes are given below:

Name of Statute Nature of Dues Forum where Dispute is Pending Period to which the Amount Relates Amount Involved (Rs. in Million) Amount Unpaid (Rs. in Million)
Income Tax Act 1961 Income-tax Commissioner of Income-tax Appeals 2016-17 8.63 8.63
2017-18 15.77 15.77
Central Excise Act 1944 Excise Duty Central Excise and Service Tax 2009-12 28.10 27.10
Appellate Tribunal 2015-16 2.22 2.00
Gujarat Sales Tax Act 1970 Sales Tax Deputy Commissioner of Sales Tax (Appeals) Ahmedabad 1998-99 0.22 0.12
Gujarat Sales Tax Act 1970 Sales Tax Sales Tax Appellate Tribunal Ahmedabad 1999-2000 0.12 0.12
Bihar Sales Tax Act 1981 Sales Tax Joint Commissioner of Commercial Taxes (Appeals) Patna 2001-02 0.82 0.62
Tamil Nadu Sales Tax Act 1959 Sales Tax Assistant Commissioner (Appeals) Commercial Taxes Chennai 2002-03 0.26 0.26
Delhi Sales Tax Act 1975 Sales Tax Additional Commissioner Commercial Taxes Delhi 2003-04 0.95 0.95
Central Sales Tax Act 1956 Central Sales Tax Additional Commissioner Commercial Taxes Delhi 2004-05 2.03 1.63
Central Sales Tax Act 1956 Central Sales Tax Superintendent of Taxes Guwahati 2009-10 0.36 0.36
Deputy Commissioner of Taxes (Appeal) Guwahati 2015-16 0.12 0.09
Additional Commissioner of Sales Tax West Bengal 2016-17 & 2017-18 1.00 0.91
Andhra Pradesh General Sales Tax Act 1956 Sales Tax Sales Tax Appellate Tribunal Hyderabad 1997-98 2.16 0.10
West Bengal Sales Tax Act 1994 Sales Tax Sales Tax Appellate Tribunal Kolkata 2001-02 0.72 0.72
Uttar Pradesh Value Added Tax Act 2008 Value Added Tax Deputy Commissioner Appeals Ghaziabad 2014-15 0.12 0.10
Uttarakhand Value Added Tax 2005 Value Added Tax Joint Commissioner (Appeals) Dehradun 2012-13 0.57 0.46

There are no dues of Service Tax as on March 31 2021 on account ofdisputes.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loan to bank. The Company has not takenany loans or borrowings from financial institutions and Government and has not issued anydebentures.

(ix) In our opinion and according to the information and explanations given to us theterm loan has been applied by the Company during the year for the purposes for which itwas taken. The Company has not raised moneys by way of initial public offer or furtherpublic offer (including debt instruments) or further term loans.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no fraud on the Company by its officers oremployees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid managerial remuneration in accordance with the requisite approvalsmandated by the provisions of Section 197 read with Schedule V to the Companies Act 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theOrder is not applicable.

(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements as required by the applicableAccounting Standards.

(xiv)During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with them and hence provisions of Section 192 of theCompanies Act 2013 are not applicable.

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

For Deloitte Haskins & Sells LLP
Chartered Accountants
(F.R.N. 117366W/W-100018)
Sumit Trivedi
Partner
Membership No. 209354
UDIN: 21209354AAAAFU3787
Place : Secunderabad
Date : April 29 2021

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