To the members of AVT Natural Products Limited Chennai
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of AVT Natural Products Limited("the Company") which comprise the balance sheet as at 31 March 2019 and thestatement of Profit and Loss statement of changes in equity and statement of cash flowsfor the year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information (herein after referredto as "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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31 March 2019 the profit changes in equity and its cash flows for the year endedon that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theStandalone Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India (ICAI) together with the ethical requirements that are relevant toour audit of the standalone financial statements under the provisions of the CompaniesAct 2013 and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.
Key Audit Matters
Key audit matters are those matters that in our 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 matter described below to be the key audit matter to becommunicated in our report.
|Sl. No. ||Key audit matters ||How our audit addressed the key audit matter |
|1. ||Revenue recognition: ||Principal audit procedures: |
| ||The Company manufactures and sells a number of products and services to its customers. Sales contracts contain various performance obligations and other terms and the determination of when significant performance obligations have been met varies albeit a specific point in time can often be established. The new accounting standard Ind AS 115 has been implemented starting ||Our audit included but was not limited to the following activities: Control testing: Mapped and evaluated selected systems and processes for revenue recognition and tested a sample of key controls. |
| ||from 1 April 2018. As a consequence the Company has analysed its various sales contracts and concluded on the principles for determining the point of time for recognition of revenue from the Company's sales transactions. In view of the comprehensive change of the accounting ||Test of details: Evaluated the Company's work to implement Ind AS 115 and assessed whether Company's accounting principles comply with the new accounting standard. |
| ||standard applicable for the revenue and the re-evaluation of all contracts in this light this aspect has been identified || Tested a sample of sales transactions for compliance with the Company's accounting principles. |
| ||for enhanced attention in the audit. Disclosure note 20 and the accounting policies provide additional information on how the Company accounts for its revenue and how the implementation of the standard Ind AS 115 has affected the Company's financial reporting. || Performed data analytical procedures to identify and evaluate a sample of manual journal entries. Traced disclosure information to accounting records and other supporting documentation. |
Information Other than the Standalone Financial Statements and Auditors' Report Thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in Director's report and ManagementDiscussion and Analysis Report but does not include the standalone financial statementsand our auditors' 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 in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Responsibilities of the Management and Those Charged with Governance for StandaloneFinancial 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 changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards specified under section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditors' 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 auditors' 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe Company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by 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 auditors' 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 ourauditors' 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.
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 auditors' 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 (Auditors' Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
2. 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 the Statement of Changes inEquity and the Cash Flow Statement dealt with by this Report are in agreement with thebooks of account.
(d) In our opinion the aforesaid standalone financial statements comply with theIndian 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 the directors as on 31March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2019 from being appointed as a director in terms of Section164 (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".
(g) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer 33 to the standalone financialstatements;
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 - Refer Note 40 to the standalone financial statements;
iii. There was a delay in transfer to the Investor Education and Protection Fund by theCompany of a sum of Rs.8.73 lakhs relating to unpaid dividend pertaining to the financialyear 2010-11 which has been remitted after a delay of six days on 20th October2018.
3. As required by Section 197(16) of the Act we report that the remuneration paid bythe Company to its directors is in accordance with the prescribed provisions and theremuneration paid to every director is within the limit specified under Section 197.
| ||For PKF Sridhar & Santhanam LLP |
| ||Chartered Accountants |
| ||Firm's Registration No.003990S/S200018 |
| ||T.V. Balasubramanian |
|Place : Chennai ||Partner |
|Date28th May 2019 ||Membership No : 027251 |
ANNEXURE A TO INDEPENDENT AUDITORS' REPORT
Referred to in paragraph 1 on Report on Other Legal and Regulatory Requirements'of our report of even date to the members of AVT Natural Products Limited ("theCompany") on the standalone financial statements as of and for the year ended 31March 2019.
(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) The Company has a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets. Pursuant to the programme certain fixedassets were physically verified by the management during the year. In our opinion andaccording to the information and explanations given to us no material discrepancies werenoticed on such verification
(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds provided to us we report thatthe title deeds comprising all the immovable properties of the land and buildings whichare freehold are held in the name of the Company as at Balance Sheet date.
(ii) The inventory except goods in transit and stocks lying with third parties hasbeen physically verified by the management at reasonable intervals during the year. In ouropinion the frequency of such verification is reasonable. For stocks lying with thirdparties at the year-end written confirmations have been obtained and in respect ofgoods-in-transit subsequent goods receipts have been verified. The discrepancies noticedon verification between the physical stocks and the book records were not material andhave been dealt with in the books of account.
(iii) Based on our audit procedures & according to the information and explanationgiven to us the Company has not granted any loans secured or unsecured to partiescovered in the register maintained under section 189 of the Act and hence 3(iii) of theOrder is not applicable to the Company.
(iv) In our opinion and according to the information and explanation given to us theCompany has complied with provisions of Section 185 and 186 of the Act in respect of grantof loans making investments and providing guarantees and securities as applicable.
(v) Based on our audit procedures & according to the information and explanationgiven to us the Company has not accepted any deposits from the public within the meaningof the Act and the rules made there under and hence clause 3(v) of the Order is notapplicable.
(vi) We have broadly reviewed the books of account relating to materials labour andother items of costs