The Members of
Dhanuka Agritech Limited
Report on the Audit of the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of DHANUKAAGRITECH LIMITED ("the Company") which comprise the standalone Balancesheet as at 31 March 2019 the standalone statement of Profit and Loss (including OtherComprehensive Income) standalone statement of cash flows and standalone statement ofchanges in equity for the year then ended and notes to the standalone financialstatements including a summary of significant accounting policies and other explanatoryinformation.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 ("Act") in the manner so required and give atrue and fair view in conformity with the accounting principles generally accepted inIndia of the state of affairs of the Company as at March 31 2019 its profit (includingother 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 Ind AS financial statements in accordance withthe Standards on Auditing (SAs) 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 Ind AS financial statements section ofour report. We are independent of the Company in accordance with the Code of Ethics issuedby the Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of the Actand the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Ind AS financial statements for the financialyear ended March 312019. These matters were addressed in the context of our audit of theStandalone Ind AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. We have determined the mattersdescribed below to be the key audit matters to be communicated in our report:
|Key Audit Matter ||Auditor's Response |
|Estimation of provision for sales returns discounts rebates schemes and incentives on sales impacting revenue from sale of products ||Our audit procedures included the following: |
|Revenue from sale of products is presented net of returns discounts rebates schemes and incentives in the standalone Ind AS financial statements. || Understanding the policies and procedures applied to estimate the sales returns discounts rebates schemes and incentives including evaluation and testing of the design and operating effectiveness of controls related to these estimates. |
|The Company's management determines provision for sales return discounts rebates schemes and incentives on the basis of various factors such as the current and expected operating environment sales return variability and expected achievement of targets against various ongoing schemes floated. || Obtained management's calculations for the respective estimates and assessed the reasonableness of assumptions used by the management in determining the amount of provisions based on understanding of the market conditions. |
|We determined the estimates associated with sales returns discounts rebates schemes and incentives on sale of products as a key audit matter in view of it having significant impact on the recognised revenue and the involvement of management judgement in estimating the amounts at which these are expected to be settled. || Assessed the reasonableness of estimates made by the management in the past by comparing the provisions recognised in the earlier financial year with their subsequent settlement ratio analysis of sales returns discounts rebates schemes and incentives as a percentage of sale of last few years. |
| || Verified if any credit notes were issued and/or adjustments made after the balance sheet date and their impact if any on the reported amounts. |
Information Other than the Standalone Ind AS Financial statements and Auditor's Reportthereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Annual report2018-19 but does not include the Standalone Ind AS financial statements and our auditor'sreport thereon.
Our opinion on the standalone Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone Ind AS financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.
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.
Responsibility of Management for Standalone Ind AS 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 Ind AS financialstatements that give a true and fair view of the financial position financial performance(including other comprehensive income) changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe 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 Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the standalone Ind AS 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.
Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Ind ASFinancial 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 Ind AS financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the Standalone IndAS 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 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 onwhether the company has adequate internal financial controls system in place and theoperating effectiveness 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 Ind AS financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.
Evaluate the overall presentation structure and content of the Standalone IndAS financial statements including the disclosures and whether the Standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Ind AS financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the standalone Ind AS financial statementsmay be influenced. We consider quantitative materiality and qualitative factors in (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 Ind AS financialstatements.
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 Ind AS financialstatements for the financial year ended March 312019 and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.
The standalone Ind AS financial statements of the Company for the year ended March 312018 were audited by another firm of chartered accountants under the Companies Act 2013who vide their report dated May 22 2018 expressed an unmodified opinion on thoseStandalone Ind AS financial statements. Our opinion is not modified in respect of thismatter.
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 ofthe Order.
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 Standalone Balance Sheet the Standalone Statement of Profit and Loss(including Other Comprehensive Income) Standalone Statement of Cash Flows and StandaloneStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account;
(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act;
(e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st 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 Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act; and
(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 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 as at March 31 2019 onits financial position in its Standalone Ind AS financial statements - Refer Note 37 tothe Standalone Ind AS financial statements.
ii. The Company did not have any material foreseeable losses on its long-termcontracts the Company did not have any long-term derivative contracts; and
iii. Following are the instances of delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company:
|Period to which amount relates ||Nature of Dues ||Amount (Rs. In lacs) ||Due Date ||Date of Payment |
|FY 2010-11 ||Unclaimed/ Unpaid Dividend ||6.47 ||03.09.2018 ||12.09.2018 |
For S.S. KOTHARI MEHTA & COMPANY
Firm Reg. No. 000756N
Yogesh K. Gupta
st May 2019
ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our report to the Members of Dhanuka Agritech Limited of even date)
i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a program of physical verification to cover all the items of fixedassets in a phased manner which in our opinion is reasonable having regard to the sizeof the Company and the nature of its assets. Pursuant to the program certain fixed assetswere physically verified by the management during the year. According to the informationand explanations given to us no material discrepancies were noticed on such verification.
(c) According to the information and explanation given to us and on the basis ofexamination of title deeds / sale deed / transfer deed / conveyance deed / possessionletter / allotment letter and other relevant records evidencing title/ possessionprovided we report that the title deeds of the immovable properties are held in the nameof the Company.
ii. The inventories of the Company (except stock in transit) have been physicallyverified by the management at reasonable intervals. In our opinion the procedures ofphysical verification of inventory followed by the Management are reasonable in relationto the size of the Company and nature of its business. The discrepancies noticed on suchphysical verification of inventory as compared to book records were not material.
iii. The Company has granted unsecured loan to one body corporate covered in theregister maintained under section 189 of the Companies Act 2013 ('the Act').
(a) According to the information and explanations given to us and based on the auditprocedures conducted by us we are of the opinion that the terms and conditions of loansgranted by the Company are not prejudicial to interest of the Company.
(b) In respect of aforesaid loan repayment of principal and payment of interest hasbeen stipulated. Repayment of principal & interest is not due at the close of theyear.
(c) There is no amount overdue for more than 90 days as on the date of Balance Sheet.
iv. According to the information explanations and representations provided by theManagement and based upon audit procedures performed we are of the opinion that inrespect of loans and investments the Company has complied with the provisions of theSection 185 and 186 of the Companies Act 2013.The Company has not provided any guaranteesor security as specified under Section 185 and 186 of the Companies Act 2013.
v. According to the information and explanations given to us the Company has notaccepted any deposits from the public within the meaning of sections 73 to 76 of theCompanies Act 2013 and the rules framed there under. Accordingly the provisions ofclause 3 (v) of the Order are not applicable to the Company.
vi. We have broadly reviewed the books of account maintained by the Company pursuant tothe rules prescribed by the Central Government of India for the maintenance of costrecords under sub-section 1 of Section 148 of the Companies Act 2013 and are of theopinion that prima facie the prescribed records and accounts have been made andmaintained. However we have not carried out a detailed examination of such records with aview to determining whether they are accurate or complete.
vii. (a) According to the information and explanations given to us and on the basis ofexamination of the records of the Company the Company is generally regular in depositingundisputed statutory dues including Provident Fund Employees' State Insurance Incometax Goods and Service Tax Duty of Customs Cess and any other material statutory dues toappropriate authorities.
(b) According to the information and explanations given to us and on the basis ofexamination of the records of the Company there are no undisputed statutory dues payablefor a period of more than six months from the date they become payable as at March 31st2019.
(c) According to the records and information and explanations given to us there are nodues in respect of income tax sales tax service tax duty of excise goods and servicetax duty of custom or value added tax which have not been deposited on account of anydispute except as given below:
|Name of the Statute ||Nature of dues ||Period ||Amount (Rs. in lacs) ||Amount deposited (Rs. in lacs) ||Forum where pending |
|The Central Excise Act1994 ||Excise Duty ||1996 ||9.41 ||NIL ||Additional/Deputy Commissioner |
|The Central Excise Act1994 ||Excise Duty ||1999-2000 ||48.21 ||15.00 ||CESTAT Chandigarh |
|The Central Excise Act1994 ||Excise Duty ||2010-2011 ||14.60 ||NIL ||CESTAT Ahmedabad |
|The Central Excise Act1994 ||Excise Duty ||Jan 2014- Sep 2015 ||357.31 ||46.90 ||CESTAT Chandigarh |
|The Central Excise Act1994 ||Excise Duty ||April 2012-Sep 2016 ||132.70 ||23.80 ||CESTAT Ahmedabad |
|The Central Excise Act1994 ||Excise Duty ||Oct 2015- March 2016 ||103.23 ||7.74 ||Commissioner (A) Jammu |
|The Central Excise Act1994 ||Excise Duty ||June 2010-Jan 2014 ||105.85 ||7.94 ||Commissioner (A) Jammu |
|The Service Tax Act1994 ||Service Tax ||Jan 2005 to Aug 2007 ||140.25 ||65.20 ||Additional/Deputy Commissioner Delhi |
|The Service Tax Act1994 ||Service Tax ||Oct 2008 to March 2009 ||36.00 ||1.80 ||Additional/Deputy Commissioner Delhi |
|The Central Sales Tax Act 1944 and State VAT Act ||VAT ||2009-10 ||19.95 ||NIL ||West Bengal Appellate Tribunal |
|The Central Sales Tax Act 1944 and State VAT Act ||VAT ||2008-09 ||14.89 ||8.19 ||Assistant Commissioner Bihar |
|The Central Sales Tax Act 1944 and State VAT Act ||VAT ||2012-13 ||138.15 ||46.00 ||Joint Commissioner Gujarat |
viii. In our opinion on the basis of audit procedures and according to the informationand explanations given to us the Company has not defaulted in repayment of loan orborrowing to any banks or financial institutions during the year. The Company has notobtained any loans from debenture holders or government.
ix. According to the information and explanations given to us the company has notraised money by way of initial public offer or further public offer (including debtinstruments) and term loans during the year. Accordingly paragraph 3(ix) of the Order isnot applicable to the Company.
x. During the course of our examination of the books and records of the Company carriedout in accordance with the generally accepted auditing practices in India we have neithercome across any instance of fraud by the company or on the Company by its officers oremployees noticed or reported during the year nor have we been informed of such case bythe 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 requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Companies Act 2013.
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 record of the company transactions with the related parties are incompliance with Sections 177 and 188 of Companies Act 2013 where applicable and detailsof such transactions have been disclosed in the Standalone Ind AS Financial Statements asrequired under Indian Accounting Standard (Ind AS) 24 Related Party Disclosures specifiedunder Section 133 of the Act.
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. Accordingly paragraph 3(xiv) of the Order is not applicable.
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 with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly clause 3(xvi) of the Order is not applicable.
For S.S. KOTHARI MEHTA & COMPANY
Firm Reg. No. 000756N
Yogesh K. Gupta
Membership No. 093214
Place : Gurugram
Date: 21st May 2019
"Annexure B" to the Independent Auditor's Report of even date on theStandalone Ind AS Financial Statements of DHANUKA AGRITECH LIMITED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act") as referred to in paragraph 2(f) of'Report on Other Legal and Regulatory Requirements'
We have audited the internal financial controls over financial reporting of DHANUKAAGRITECH LIMITED ("the Company") as of March 31 2019 in conjunction withour audit of the standalone Ind AS financial statements of the Company for the year endedon 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
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 FinancialReporting(the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand 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 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 financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over 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 the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 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 S.S. KOTHARI MEHTA & COMPANY
Firm Registration No. 000756N
Yogesh K. Gupta
Date: 21 May 2019