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Avanti Feeds Ltd.

BSE: 512573 Sector: Agri and agri inputs
NSE: AVANTIFEED ISIN Code: INE871C01038
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VOLUME 5409
52-Week high 675.00
52-Week low 384.90
P/E 29.71
Mkt Cap.(Rs cr) 5,917
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 431.00
CLOSE 430.65
VOLUME 5409
52-Week high 675.00
52-Week low 384.90
P/E 29.71
Mkt Cap.(Rs cr) 5,917
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 Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements ofAvanti Feeds Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2021 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 "thestandalone financial statements").

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 31stMarch 2021 the profit and total comprehensive income changes in equity and its cashflows for the year ended on that date.

Basis for Opinion

We conducted our audit of the Standalone Financial Statements inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theCompanies Act 2013. Our responsibilities under those Standards are further described inthe Auditor's Responsibilities for the Audit of the Standalone Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theethical requirements that are relevant to our audit of the Standalone Financial Statementsunder the 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 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.

S. No Key Audit Matters
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) 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:
We assessed the appropriateness of the revenue recognition accounting policies by comparing with applicable accounting standards.
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.
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 relevant 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.
Refer Notes 2.4c and 22 to the Standalone Financial Statements 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.
2. The Company enters into various financial instruments such as investments in quoted and unquoted equity instruments quoted mutual funds and quoted non-convertible debentures. 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;
As at 31st March 2021 financial instruments carried at fair value through profit and loss totaled `101344.70 lakhs (current investments of `93344.26 lakhs and non-current investments of `8000.44 lakhs) as disclosed in Note 6 to the Standalone Financial Statements.
We also tested on a sample basis the existence and valuation of such financial instruments as at 31 st March 2021. 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
These financial instruments are recorded at fair value as required by the relevant accounting standard.
Obtaining an understanding of key financial instrument contract terms to assess the appropriateness of accounting reflected in the financial report.
We have focused on this area due to the complexities associated with the valuation and accounting for these financial instruments.
We have also assessed the appropriateness of the disclosures included in Note 30 to the Standalone Financial Statements.
3. Inventory valuation and existence To address the risk for material error on inventories our audit procedures included amongst other:
At the balance sheet date the value of inventory amounted to `31 333.73 lakhs representing 17.71% of total assets. Inventories were considered as key audit matter due to the size of the balance and because inventory valuation involves management judgment.
Assessing the compliance of company's accounting policies over inventory with applicable accounting standards.
Observed the stock take process at Factory locations during the year and at the end of the year and undertook our test counts where ever necessary. Compared the Quantities we counted with Quantities recorded.
As described in note 2.4.j of the financial statements inventories are carried at the lower of cost and net realizable value on a weighted average basis.
Analyzing the Inventory Ageing reports and Net realizable value of inventories
The company has segment specific procedures for identifying risk for obsolescence and measuring inventories at the lower of cost or net realizable value. Tested that inventory on hand at the end of the period was recorded at the lower of cost and net realizable value by testing a sample of inventory items to the most recent selling price.

Information Other than the Standalone Financial Statements andAuditor's Report Thereon

The Company's Management and 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 toBoard's Report Business Responsibility Report and Shareholder's Information but does notinclude the Standalone Financial Statements and our auditor's report thereon.

Our opinion on the Standalone Financial Statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statementsour responsibility 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.

If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Management's Responsibility for the Standalone FinancialStatements

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these Standalone Financial Statements that give a true and fair view of thefinancial position financial performance including other comprehensive income changes inequity and 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 accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and 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 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 responsible for overseeing the company'sfinancial reporting process.

Auditor's Responsibility for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether theseStandalone 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 professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of theStandalone Financial Statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal financial controls relevantto 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.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the goingconcern basis 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 conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of theStandalone Financial Statements including the disclosures and whether the StandaloneFinancial Statements represent the underlying transactions and events in a manner thatachieves fair presentation.

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 wehave 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 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 precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would 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 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the 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 explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

c) The balance Sheet the statement of profit and loss including othercomprehensive income the statement of changes in equity and the statement of cash flowsdealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid Standalone Financial Statements complywith the Accounting Standards specified under Section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2014.

e) On the basis of the written representations received from thedirectors as on March 31 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2021 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 overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate 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'sReport in accordance 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 theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act.

h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its Standalone Financial Statements- Refer Note 34 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 to betransferred to the Investor Education and Protection Fund by the Company.

For TUKARAM & CO LLP
Chartered Accountants
ICAI Firm Regn. 004436S/S200135
(RAJENDER REDDY K)
PARTNER
Membership No: 231834
UDIN: 21231834AAAABU6081
Place: Hyderabad
Date : 22/06/2021

"Annexure - A" to the Auditors' Report

The Annexure referred to in Independent Auditors' Report to the membersof the Company on the Standalone Financial Statements for the year ended March 31 2021we report 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 particularsincluding quantitative details and situation of fixed assets.

(b) As explained to us the management has physically verified asubstantial portion of the fixed assets during the year and in our opinion frequency ofverification is reasonable having regard to the size of the Company and the nature of itsassets. The discrepancies noticed on physical verification of fixed assets as compared tothe books of account were not material and have been properly dealt with in the books ofaccounts.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties included in property plant and equipment are held in the name of the Company.In respect of immovable properties taken on lease and disclosed as right-of-use-assets inthe Standalone Financial Statements the lease agreements are in the name of the Company.

ii. According to the information and explanations given to us theinventories have been physically verified by the management during the year. In ouropinion the frequency of verification is reasonable. The company has maintained properrecords of Inventory. The discrepancies noticed on physical verification of inventory ascompared to the books of account were not material and have been properly dealt with inthe books of accounts.

iii. According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms or otherparties covered in the register maintained under section 189 of the Act.

iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of section 185 and 186 of theAct with respect to the loans Investments made and guarantees given.

v. According to the information and explanations given to us theCompany has not accepted deposits from the public within the meaning of Section 73 and 76or any other relevant provisions of the Act and the rules framed there under.

vi. We have broadly reviewed the books of account and recordsmaintained by the Company pursuant to the Rules made by the Central Government of Indiafor the maintenance of cost records prescribed under sub-section (1) of section 148 of theAct related to generation of electricity 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 with appropriate authoritiesundisputed statutory dues including provident fund employees state insurance income-taxgoods and service tax duty of customs cess and other material statutory dues applicableto it. According to the information and explanations given to us no undisputed amountspayable in respect of such statutory dues were outstanding at the year end for a periodof more than six months from the date they became payable.

(b) According to the information and explanations given to us thedetails of dues of value added tax and duty of customs on account of any dispute are givenbelow:

Name of the Statute Nature of the Dues Amount T in Lakhs Period to which the amount relates Forum where dispute is pending
Madhya Pradesh VAT Act 2002 Sales tax (MP VAT 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 andexplanations given by the management we are of the opinion that the Company has notdefaulted in the repayment of dues to banks governments and financial institutions. TheCompany did not have any debentures outstanding as at the year end.

ix. Based on the information and explanations given to us by themanagement the Company has not raised any moneys by way of initial public offer orfurther public offer of equity shares convertible securities and debt securities. No termloans were taken during the year by the Company.

x. Based upon the audit procedures performed for the purpose ofreporting the true and fair view of the Standalone Financial Statements and as per theinformation and explanations given by the management we report that no material fraud bythe Company or on the Company by its officers or employees has been noticed or reportedduring the course of our audit.

xi. According to the information and explanations give to us and basedon our examination of the records of the Company the Company has paid / provided formanagerial 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 the information and explanationsgiven to us the Company is not a Nidhi Company. Accordingly paragraph 3(xii) of theOrder is not applicable.

xiii. According to the information and explanations given to us andbased 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 Standalone Financial Statements asrequired by the applicable accounting standards.

xiv. According to the information and explanations given to us andbased 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.

xv. According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with him. Accordingly paragraph3(xv) of the Order is not applicable.

xvi. The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.

For TUKARAM & CO LLP
Chartered Accountants
ICAI Firm Regn. 004436S/S200135
(RAJENDER REDDY. K)
PARTNER
Membership No. 231834
UDIN: 21231834AAAABU6081
Place : Hyderabad
Date : 22nd June 2021

Annexure - B to the Independent Auditors' Report

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 Avanti Feeds Limited ("the Company") as of 31st March2021 in conjunction with our audit of the Standalone Financial Statements of the Companyfor the 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 ('ICAI').These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to 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.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. 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 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 judgment including the assessment of therisks of material misstatement of the Standalone Financial Statements whether due tofraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols 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 Standalone 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 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 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 31st March 2021based on 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.

For TUKARAM & CO LLP
Chartered Accountants
ICAI Firm Regn. 004436S/S200135
(RAJENDER REDDY. K)
PARTNER
Membership No: 231834
UDIN: 21231834AAAABU6081
Place : Hyderabad
Date : 22nd June 2021

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