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Avanti Feeds Ltd.

BSE: 512573 Sector: Agri and agri inputs
NSE: AVANTIFEED ISIN Code: INE871C01038
BSE 00:00 | 16 Apr 479.55 17.75
(3.84%)
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460.05

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484.20

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460.05

NSE 00:00 | 16 Apr 479.25 17.15
(3.71%)
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465.10

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484.50

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OPEN 460.05
PREVIOUS CLOSE 461.80
VOLUME 25135
52-Week high 587.35
52-Week low 370.00
P/E 21.36
Mkt Cap.(Rs cr) 6,531
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 460.05
CLOSE 461.80
VOLUME 25135
52-Week high 587.35
52-Week low 370.00
P/E 21.36
Mkt Cap.(Rs cr) 6,531
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Avanti Feeds Ltd. (AVANTIFEED) - Auditors Report

Company auditors report

To the Members of Avanti Feeds Limited

Report on the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of Avanti FeedsLimited ('the Company') which comprise the Balance Sheet as at 31st March2020 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year ended on thatdate and notes to the financial statements including a summary of significant accountingpolicies and other explanatory information (herein after referred to as "financialstatements").

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 31st March 2020 the profit andtotal comprehensive income changes in equity and its cash flows for the year ended onthat date.

Basis for Opinion

We conducted our audit of the Standalone Financial Statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Companies Act 2013.Our responsibilities 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 Companies Act 2013 and the Rules made thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Standalone FinancialStatements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Financial Statements of the current period.These matters were addressed in the context of our audit of the Standalone FinancialStatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

S No Key Audit Matters Auditor's Response
1. Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of Ind AS 115 "Revenue from Contracts with Customers" (revenue accounting standard) Principal Audit Procedures
The application of the accounting standard involves certain key judgements relating to identification of the contract with a customer identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognized when a performance obligation is satisfied. Additionally revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. We assessed the Company's process to identify the impact of the revenue accounting standard. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
Refer Notes 2.4c and 22 to the Standalone Financial Statements • Evaluated the design of internal controls relating to implementation of the new revenue accounting standard.
2. The Company enters into various financial instruments such as investments in quoted and unquoted equity instruments quoted mutual funds and quoted nonconvertible debentures. As at 31st March 2020 financial instruments carried at fair value through profit and loss totalled Rs.54965.13 lakhs (current investments of Rs.54538.73 lakhs and non-current investments of Rs.426.40 lakhs) as disclosed in Note 6 to the Standalone Financial Statements. These financial instruments are recorded at fair value as required by the relevant accounting standard. We have focused on this area due to the complexities associated with the valuation and accounting for these financial instruments. • Selected a sample of continuing and new contracts and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving enquiry and observation reperformance and inspection of evidence in respect of operation of these controls.
• Tested the relevant information technology systems' access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the new revenue accounting standard.
• Selected a sample of continuing and new contracts and performed the following procedures:
• Read analyzed and identified the distinct performance obligations in these contracts.
• Compared these performance obligations with that identified and recorded by the Company.
• Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration.
• Samples in respect of revenue recorded upon transfer of control of promised products or services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those products or services were tested using a combination of DCs Sales orders weighment slips and non-returnable gate passes including customer acceptances subsequent invoicing and historical trend of collections and disputes.
• Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings.
• We reviewed the collation of information and the logic of the report generated from the IT system used to prepare the disclosure relating to the periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date.
Our procedures included but were not limited to:
• Obtaining an understanding of the internal risk management procedures and the systems and controls associated with the origination and maintenance of complete and accurate information relating to financial instruments;
• Utilizing our treasury experts we also tested on a sample basis the existence and valuation of such financial instruments as at 31st March 2020. Our audit procedures focused on the integrity of the valuation models and the incorporation of the contract terms and the key assumptions including future price assumptions and discount rates; and
• Obtaining an understanding of key financial instrument contract terms to assess the appropriateness of accounting reflected in the financial report.
We have also assessed the appropriateness of the disclosures included in Note 31 to the Standalone Financial Statements.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's Management and Board of Directors is responsible for the preparation ofthe other information. The other information comprises the information included in theManagement Discussion and Analysis Board's Report including Annexures to Board's ReportBusiness Responsibility report and Shareholder's Information but does not include theStandalone Financial Statements and our auditor's report thereon.

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 Companies Act 2013 ("the Act") with respect to the preparation ofthese Standalone Financial Statements that give a true and fair view of the financialposition financial performance including other comprehensive income changes in equityand cash flows of the Company in accordance with the Ind AS and other accountingprinciples generally accepted in India.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Standalone Financial Statements that give a true and fair view and are free frommaterial misstatement whether due 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.

Those Board of Directors are responsible for overseeing the company's financialreporting process.

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

Our objectives are to obtain reasonable assurance about whether these 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.

Other Matters

on account of the COVID-19 related lock-down restrictions we were not able tophysically observe the verification of inventory that was carried out by the Management.Consequently we have performed alternate procedures to audit the existence of Inventoryas per the guidance provided by in SA 501 "Audit Evidence - Specific Considerationsfor Selected Items" and have obtained sufficient audit evidence to issue ourunmodified opinion on these Standalone Financial Statements.

Our opinion on the Standalone Financial Statements above and our report on Other Legaland Regulatory Requirements below is not modified in respect of the above matter.

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 ofthe Act we give in the "Annexure-A" a statement on the mattersspecified 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 and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The balance Sheet the statement of profit and loss including other comprehensiveincome the statement of changes in equity and the statement of cash flows dealt with bythis Report are in agreement with the books of account.

d) In our opinion the aforesaid Standalone Financial Statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

e) on the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director interms of Section 164(2) of the Act.

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 unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over 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 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- Refer Note 34 to the 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.For TUKARAM & CO LLP.

For TUKARAM & CO LLP.
Chartered Accountants
ICAI Firm Regn. 004436S
(B. LOKANATH)
PARTNER
Membership No.024927
UDIN: 20024927AAAAAE2700
Place: Hyderabad
Date :27th June 2020

'Annexure-A' to the Auditors' Report

The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone financial statements for the year ended 31st March 2020 wereport that:

Re: Avanti Feeds Limited ('the Company')

i. In respect of the Company's fixed assets:

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

(b) As explained to us the management has physically verified a substantial portion ofthe fixed assets during the year and in our opinion frequency of verification isreasonable having regard to the size of the Company and the nature of its assets. Thediscrepancies noticed on physical verification of fixed assets as compared to the books ofaccount were not material and have been properly dealt with in the books of accounts.

(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 propertiesincluded in property plant and equipment are held in the name of the Company. In respectof immovable properties taken on lease and disclosed as right-of-use-assets in thestandalone financial statements the lease agreements are in the name of the Company.

ii. According to the information and explanations given to us the inventories havebeen physically verified by the management during the year. In our opinion the frequencyof verification is reasonable. The company has maintained proper records of Inventory. Thediscrepancies noticed on physical verification of inventory as compared to the books ofaccount were not material and have been properly dealt with in the books of accounts.

iii. According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms or other parties covered inthe register maintained under 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 and guarantees given.

v. According to the information and explanations given to us the Company has notaccepted deposits from the public within the meaning of Section 73 and 76 or any otherrelevant provisions of the Act and the rules framed there under.

vi. We have broadly reviewed the books of account and records maintained by the Companypursuant to the rules made by the Central Government of India for the maintenance of costrecords prescribed under sub-section (1) of section 148 of the Act in respect ofproduction activities of the Company and are of the opinion that prima facie theprescribed accounts and records have been maintained. We have however not made a detailedexamination of the records with a view to determine whether they are accurate or complete.

vii. In respect of Statutory dues: (a) The Company is regular in depositing withappropriate authorities undisputed statutory dues including provident fund employeesstate insurance income-tax goods and service tax duty of customs cess and othermaterial statutory dues applicable to it. According to the information and explanationsgiven to us no undisputed amounts payable in respect of such statutory dues wereoutstanding at the year end for a period of more than six months from the date theybecame payable.

(b) According to the information and explanations given to us the details of dues ofvalue added tax and duty of customs on account of any dispute are given below:

Name of the Statute Nature of the Dues Amount 'Rs.' in Lakhs Period to which the Amount Relates Forum where Dispute is Pending
Sales tax (Mp VAT
Madhya pradesh VAT Act 2002 demand for soya transactions in 2005-06) 29.22 2005-2006 High Court of Madhya pradesh
Customs Act 1962 Customs duty 60.82 2009 -2010 to 2011-2012 CESTAT Chennai

viii. Based on our audit procedures and as per the information and explanations givenby the management we are of the opinion that the Company has not defaulted in therepayment of dues to banks governments and financial institutions. The Company did nothave any debentures outstanding as at the year end.

ix. Based on the information and explanations given to us by the management theCompany has not raised any moneys by way of initial public offer or further public offerof equity shares convertible securities and debt securities. No term loans were takenduring the year by the Company.

x. Based upon the audit procedures performed for the purpose of reporting the true andfair view of the standalone financial statements and as per the information andexplanations given by the management we report that no material fraud by the Company oron the Company by its officers or employees has been noticed or reported during thecourse of our audit.

xi. According to the information and explanations give 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 based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where 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 given 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.

For TuKARAM & CO LLP.
Chartered Accountants
ICAI Firm Regn. 004436S
(B. LOKANATH)
partner
Membership No.024927
uDIN: 20024927AAAAAE2700
place: Hyderabad
Date : 27th June 2020

'Annexure-B' to the Independent Auditors' Report

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSubsection 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of AvantiFeeds Limited ("the Company") as of 31st March 2020 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on 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'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors' Responsibility

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 the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate 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 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 judgment including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

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

Meaning of Internal Financial Controls over Financial Reporting

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

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

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 31st March 2020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India.

For TUKARAM & CO LLP.
Chartered Accountants
ICAI Firm Regn. 004436S
(B. LOKANATH)
partner
Membership No.024927
UDIN: 20024927AAAAAE2700
Place: Hyderabad
Date : 27th June 2020

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