To the Members of Galaxy Agrico Exports Limited
Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements
Disclaimer of Opinion
We have audited the accompanying standalone Ind AS financial statements of GalaxyAgrico Exports Limited ("the Company") which comprises the Balance Sheet as atMarch 31 2020 the Statement of Profit and Loss and Statement of Cash Flows for the yearthen ended and notes to the Ind AS financial statements including a summary ofsignificant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for Disclaimer ofOpinionsection of our report the aforesaid standalone Ind AS financial statements givethe information required by the Act in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2020 and loss and its cash flows for theyear ended on that date.
Basis for Disclaimer of Opinion
The Company has not carried out an inspection of its fixed assets and/or has notmaintained a register of fixed assets during the year under review. Consequently we wereunable to carry out auditing procedures necessary to obtain adequate assurance regardingthe quantities and condition of fixed assets appearing in the balance sheet at Rs. 259.70Lakhs. There were no other satisfactory audit procedures that we could adopt to obtainsufficient evidence regarding the existence of such fixed assets. Accordingly we have notbeen able to obtain sufficient appropriate audit evidence to provide a basis for an auditopinion. Any adjustment to the figure may have a consequential significant effect on theloss for the year and net assets as at March 31 2020. This was also a subject matter ofqualification in our previous year's audit report on the audited financial statements forthe year ended March 31 2019.
The Company has not carried out an inspection of its inventories during the year underreview. Consequently we were unable to carry out auditing procedures necessary to obtainadequate assurance regarding the quantities and condition of such inventories appearing inthe balance sheet at Rs. 30.54 Lakhs. There were no other satisfactory audit proceduresthat we could adopt to obtain sufficient evidence regarding the existence of suchinventories. Accordingly we have not been able to obtain sufficient appropriate auditevidence to provide a basis for an audit opinion. Any adjustment to the figure may have aconsequential significant effect on the loss for the year and net assets as at March 312020. This was also a subject matter of qualification in our previous year's audit reporton the audited financial statements for the year ended March 31 2019.
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 the IndAS Financial Statements section of our report. We are independent of the Company inaccordance with
the Code of Ethics issued by the Institute of Chartered Accountants of India togetherwith the ethical requirements that are relevant to our audit of the Ind AS financialstatements under the provisions of the Companies Act 2013 and the Rules thereunder andwe have fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements of the current period. Thesematters were addressed in the context of our audit of the Ind AS financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.
Emphasis of Matter
The Company's management is responsible for carrying out the balance confirmation andreconciliations with various debtors creditors and advances. These have not beenindependently verified by us during the year under review. Any adjustment to the value ofsuch balances as appearing in the balance sheet of the Company may have an effect on theloss and net assets of the Company for the period and year ended March 31 2020.
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report CorporateGovernance and Shareholder's Information but does not include the standalone Ind ASfinancial statements and our auditor's report 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 during the course of our audit or otherwise appearsto 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.
Responsibility of Management 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 Ind AS financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the accounting Standardsspecified under Section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in
accordance 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 implementation and maintenance of accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Ind AS financial statement that give a true and fairview and are free from material misstatement whether due to fraud or error.
In preparing the Ind AS financial statements management is responsible for assessingthe Company's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
Those Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibility for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the Ind AS financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these Ind AS financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
1. Identify and assess the risks of material misstatement of the Ind AS financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
2. Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of theCompanies Act 2013 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.
3. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
4. Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 Ind AS 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.
5. Evaluate the overall presentation structure and content of the Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent 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 Ind AS financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror 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
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 Companies Act 2013 we give in "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 and the Cash Flow Statementwith by this Report are in agreement with the books of account.
d. In our opinion except for the matters described in Basis for Disclaimer of Opinionparagraph above the aforesaid standalone Ind AS 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 March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164(2) of theAct.
f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".
g. The Company has paid managerial remuneration in accordance with the provisions ofSec. 197 of the Companies Act 2013 as amended from time to time during the reportingperiod.
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 does not have any pending litigations which would impact its financialposition.
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
Referred to in the section Report on Other Legal and Regulatory Requirements on of theIndependent Auditors' Report of even date to the members of Galaxy Agrico Exports Limitedon the standalone Ind AS financial statements as of and for the year ended March 31 2020
a) The Company is not maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
b) The fixed assets are physically verified informally by the Management from time totime. However the Company has not maintained a regular phased program for the physicalverification of the fixed assets of the Company. The management has however not noticedany material discrepancies during the year.
c) The title deeds of immovable properties as disclosed in the notes on fixed assetsto the Ind AS financial statements are held in the name of the Company.
ii. We have not been provided with the records of inventory verification done by themanagement of the company during the year. Hence we are unable to comment on whetherthere were any material discrepancies noticed by the management and whether the same havebeen dealt with in the books of accounts of the Company during the year.
iii. The Company has not granted any loans to any parties covered in the registermaintained under section 189 of the Companies Act 2013 ("the Act").
iv. The Company has not granted any loans or made any investments or provided anyguarantee or security to the parties covered under Sections 185 and 186. Therefore theprovisions of Clause 3(iv) of the said Order are not applicable to the Company.
v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.
vi. Pursuant to the Rules made by the Central Government of India the Company is notrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products.
a) According to the information and explanations given to us and the records of theCompany examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues in respect of income-tax profession tax sales tax VAT andservice tax and including provident fund employees' state insurance duty of customsduty of excise cess and any other material statutory dues as applicable with theappropriate authorities except as stated below:
|Name of Statute ||Nature of dues ||Amount (in Rs.) ||Period to which the amount relates ||Due date of payment ||Date of payment ||Remarks if any |
| || ||Not Applicable || || || || |
b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of income-tax sales tax wealth tax VAT andany other material dues which have been disputed.
vii. According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any financial institution or bank or Government or dues to debenture holders as at thebalance sheet date.
viii. The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) and term loans. Accordingly the provisions ofClause 3(ix) of the Order are not applicable to the Company.
ix. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstances of material fraud on or by the Company noticed or reported during the year norhave we been informed of such case by the Management.
x. The Company has paid managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V of the Act.
xi. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xii. The details of related party transactions if any have been disclosed in the IndAS financial statements as required under Accounting Standard (AS) 18 Related PartyDisclosures specified under Section 133 of the Act read with Rule 7 of the Companies(Account) Rules 2014.
xiii. The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.Accordingly the provisions of Clause 3(xiv) of the Order are not applicable to theCompany.
xiv. The Company has not entered into any non-cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.
xv. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.
Referred to in point f. of the section Report on Other Legal and RegulatoryRequirements of the Independent Auditors' Report of even date to the members of GalaxyAgrico Exports Limited on the standalone Ind AS financial statements for the year endedMarch 31 2020
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Act
1. In conjunction with our audit of the standalone Ind AS financial statements of theCompany as of and for the year ended March 31 2020 we have audited the internalfinancial controls over the financial reporting of Galaxy Agrico Exports Limited("the Company") as of that date.
Management's Responsibility for Internal Financial Controls
2. The Company's management is responsible for establishing and maintaining internalfinancial controls based on internal control over financial reporting criteria establishedby the Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe 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 the respective company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.
3. 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") issued by the ICAI and the Standards on Auditing deemed tobe prescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of internal financial controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith the ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on assessed risk. The procedures selected dependon the auditors' judgement including the assessment of the risks of material misstatementof the Ind AS financial statements whether due to fraud or error.
5. 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
6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of Ind AS financial statements for external purposes in accordancewith generally 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 Ind ASfinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect of Ind AS financialstatements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
7. 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 control 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.
Disclaimer of Opinion
8. According to the information and explanations given to us and based on our auditthe following material weaknesses have been identified as at March 31 2020:
a. The Company has not carried out an inspection of its fixed assets and has notmaintained a register of fixed assets during the year under review.
b. The Company has not carried out an inspection of its inventories during the yearunder review.
c. The Company does not have an internal process to report deficiencies in internalcontrol to management on a timely basis.
9. A 'material weakness' is a deficiency or a combination of deficiencies in internalfinancial control over financial reporting such that there is a reasonable possibilitythat a material misstatement of the company's annual or interim Ind AS financialstatements will not be prevented or detected on a timely basis.
10. We have considered the material weaknesses identified and reported as above indetermining the nature timing and extent of audit tests applied in our audit of theMarch 31 2020 standalone Ind AS financial statements of the Company and these materialweaknesses do not affect our opinion on the Ind AS financial statements of the Company.
|Place: Rajkot ||For H. B. Kalaria and Associates |
|Date:25/06/2020 ||Firm Reg. No. 104571W |
| ||Chartered Accountants |
| ||Sd/- |
| ||(Hasmukh Kalaria) |
| ||Partner |
| ||Mem. No. 042002 |
| ||UDIN: 20042002AAAAHP7178 |