THE MEMBERS OF
ARIES AGRO LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Aries Agro Limited("the Company") which comprise the Balance Sheet as at March 31202l theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year ended on that date and asummary of the significant accounting policies and other explanatory information(hereinafter referred to as "the standalone financial statements").
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 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 312021 and its profit totalcomprehensive income its cash flows and the changes in equity for the year ended on thatdate.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing ("SA's) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe 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 judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matter described below to be the key audit matter to be communicatedin our report.
|Key Audit Matter ||Auditor's Response |
|Evaluation of uncertain tax positions ||Principal Audit Procedures |
|The Company has material uncertain direct and indirect tax positions including matters under dispute which involves significant judgement to determine the possible outcome of these disputes. ||Obtained details of completed tax assessment and demands for the year ended March 31 2021 from management. We involved company's legal and tax consultants to challenge the management's underlying assumptions in estimating the tax provision liabilities and the possible outcome of the disputes. Company's legal and tax consultants also considered legal precedence and other ruling evaluating management's position on these uncertain tax positions. Additionally we considered the effect of new information in respect of uncertain tax position as at April 1 2020 to evaluate whether any change is required to management's position on these uncertainties. |
|The Company has disclosed in contingent liabilities (to the extent not provided for) towards direct and indirect tax position. ||We did not identify any material exception as a result of above procedure relating to management's assessment of provisions. |
|Refer Notes 4 (M) and 37 to the Standalone Financial Statement || |
|The Company undergo assessment proceedings from time to time with direct and indirect tax authorities. There is a high level of judgment required in estimating the level of provisioning and/or disclosure required. || |
|The management's assessment is supported by the advice from independent tax consultants and legal consultants where considered necessary by the management. Accordingly unexpected adverse outcome if any could impact significantly the company's reported profit and balance sheet position. || |
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the 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 and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon. The otherinformation is expected to be made available to us after the date of Auditor's Report.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a 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 Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income changes in equity and cash flows of the Company in accordancewith the 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 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 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.
In preparing the standalone financial statements management 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 unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
The Board of Directors is responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
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.
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 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 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 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.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.
We communicate with those charged with governance regarding among other matters theplanned 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 charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
2. As required by Section 143(3) of the Act based on our audit 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 (and proper returnsadequate for the purpose of our audit have been received from branches not visited by us).
c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of accounts.
d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.
e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312021 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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial 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 opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid 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) Rules 2014 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 has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.
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 AUDITOR'S REPORT
The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the standalone financial statements for the year ended 31st March2021 we report that:
i. (a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) These fixed assets were physically verified by the management at reasonableintervals. We have been informed that no material discrepancies were noticed on suchphysical verification.
(c) According to the information and explanation 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. In respect of immovable properties taken on lease anddisclosed as property plant and equipment in the Ind AS Financial Statement the leaseagreements are in the name of the Company.
ii. According to the information and explanations provided to us the stock ofinventory has been physically verified during the period by the management at reasonableintervals. No material discrepancies were noticed on physical verification of stocks ascompared to book records.
iii. The Company has granted loans to parties covered in the Register maintained underSection 189 of the Act 2013
(a) As per information and explanation provided to us the rate of interest and otherterms and conditions on which the loans granted by the Company to the bodies corporatelisted in the register maintained under section 189 of the Act were not prima facieprejudicial to the interest of the company.
(b) As per information and explanation provided to us in the case of loans granted bythe company to the bodies corporate listed in the register maintained under section 189 ofthe Act the borrowers have been regular in the payment of principal and interest asstipulated wherever applicable.
(c) As per the information given by the management there are no overdue amounts inrespect of the loans granted to the bodies corporate listed in the register maintainedunder section 189 of the Act.
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 investments made.
v. According to the information and explanations provided by the company The Companyhas not accepted deposits from the public.
vi. The Company has appointed a cost accountant firm to carry out the Cost Audit. Wehave reviewed the cost records maintained by the Company pursuant to the Companies (CostAccounting Records) Rules 2014 prescribed by the Central Government under section 148 (1)of the Companies Act 2013 and are of the opinion that prima facie the prescribed costrecords have been maintained. We have however not made a detailed examination of thecost records with a view to determine whether they are accurate or complete.
vii. (a) According to the information and explanations given to us and the records ofthe company examined by us in our opinion the company is generally regular in depositingstatutory dues including Provident Fund Employee State Insurance Income Tax Goods andService Tax Custom Duty Cess and any other material statutory dues except occasional/minor delays. As per the information given by the management and apparent from the recordsthe undisputed liabilities as on 31st March 2021 is for a period exceeding sixmonths from the date of it becoming payable is NIL.
(b) Details of disputed liability in respect of tax dues on account of Income TaxSales Tax Service Tax Goods and Service Tax Custom Duty Excise Duty Value Added TaxCess together with the status and the Forum before which such dispute is pending as on 31stMarch 2021 is as per Annexure I.
viii. The company has not defaulted in repayment of loans or borrowing to a financialinstitution banks or Government. The Company has not obtained any borrowings by way ofissue of debentures.
ix. According to the information and explanation provided to us the company did notraise any money by way of initial public offering or further public offer (including debtinstruments). The company has taken term loans which have been utilized for the purposefor which such loans were obtained.
x. During the course of our examination of books and records of the company carriedout in accordance with generally accepted auditing practices in India and according tothe information and explanations given to us we have neither come across any instance ofmaterial fraud by the company or on the company by its officers or employees noticed orreported during the year nor we have been informed of any such case by the management.
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 requisites 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 based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act wherever applicable and details of suchtransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.
xiv. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe 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 to Directors. Accordingly paragraph3(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 I to Clause vii (b) of Auditor's Report
Details of disputed statutory dues outstanding as on 31st March 2021
|Nature of Dues ||Period to which payment relates ||Forum where the dispute is pending ||Particulars of Dispute ||Tax Outstanding Rs. |
|Sales Tax (Lucknow) ||2013-14 ||The Additional Commissioner - Grade II (Appeals) Commercial Tax Lucknow (U.P.) ||Disallowance of legitimate claim of goods return and levied VAT on Branch transfer and incorrect enhancement of sales turnover. ||1308859 |
|Sales Tax (Haryana) ||2013-14 ||The Hon'ble High Court of Punjab and Haryana at Chandigarh ||Incorrect and perverse orders on classification of Micronutrient fertilizers. ||1400869 |
|Sales Tax (Haryana) ||2014-15 ||The Hon'ble High Court of Punjab and Haryana at Chandigarh ||Incorrect and perverse orders on classification of Micronutrient fertilizers. ||953734 |
| || || ||Total ||3663462 |
|Income Tax ||2011-12 ||High Court of Bombay ||(1) Transfer Pricing adjustment (2) Disallowance u/s 2(24)(x) r.w.s. 36(1)(va) ||21274249 |
|Income Tax ||2017-18 ||Commissioner of Income Tax (Appeal) ||Addition u/s 68 r.w.s 115BBE ||50507376 |
| || || ||Total ||71781625 |
|Central Excise & Customs ||2011-12 & 2012-13 ||Central Excise & Service Tax Appellate Tribunal (CESTAT) ||Classification of Goods Imported ||2991582 + 2991582 (Penalty) |
|Central Excise & Customs ||March 2011 to October 2012 ||Central Excise & Service Tax Appellate Tribunal (CESTAT) ||Classification of Goods Manufactured ||38104558 + 38104558 (Penalty) |
|Central Excise & Customs ||June 2005 to Jun 2017 ||Central Excise & Service Tax Appellate Tribunal (CESTAT) ||Classification of Goods Manufactured ||47990362 |
|Central Excise & Customs ||October 2012 to Jun 2017 ||Central Excise & Service Tax Appellate Tribunal (CESTAT) ||Classification of Goods Manufactured ||138420563 + 138420563 (Penalty) |
|Central Excise & Customs ||Feb 2012 to Dec 2012 ||Central Excise & Service Tax Appellate Tribunal (CESTAT) ||Classification of Imported Goods ||8184792 |
| || || ||Total ||415208560/- |
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Aries AgroLimited ("the Company") as of March 31 2021 in conjunction with our audit ofthe standalone Ind AS financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls 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. 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 respective 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 Companies Act 2013.
Our responsibility is to express an opinion on the company's internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe 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 judgement including the assessment of the risks ofmaterial 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 on the internal financial controls system overfinancial reporting of the Company.
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 financial reporting includes those policesand procedure that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflects the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Limitations of Internal Financial Controls Over Financial Reporting
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.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2021 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
| ||For Sandeep Sheth & Associates Chartered Accountants |
| ||(Firm's Registration No. 120685W) |
| ||Sandeep Sheth |
|Date: 29th June 2021 ||Proprietor (Membership No.101903) |
|Place: Mumbai ||UDIN : 21101903AAAAE48594 |