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IFB Agro Industries Ltd.

BSE: 507438 Sector: Consumer
NSE: IFBAGRO ISIN Code: INE076C01018
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NSE 00:00 | 30 Nov 597.35 0.35
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OPEN 619.30
PREVIOUS CLOSE 599.15
VOLUME 3099
52-Week high 759.00
52-Week low 365.40
P/E 8.10
Mkt Cap.(Rs cr) 561
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 619.30
CLOSE 599.15
VOLUME 3099
52-Week high 759.00
52-Week low 365.40
P/E 8.10
Mkt Cap.(Rs cr) 561
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

IFB Agro Industries Ltd. (IFBAGRO) - Auditors Report

Company auditors report

to the Members of

IFB Agro Industries Limited.

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of IFB Agro Industries Limited("the Company") which comprise the standalone balance sheet as at 31 March2021 and the standalone statement of profit and loss (including other comprehensiveincome) standalone statement of changes in equity and standalone statement of cash flowsfor the year then ended and notes to the standalone financial statements including asummary of the significant accounting policies and ot  her explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2021 and profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance withthe Code of Ethics issued by the Institute of Chartered Accountants of India together withthe ethical requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion on the Standalone financial statements.

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 a separateopinion on these matters.

Description of Key Audit Matter

Impairment of trade receivables

See note 9 and 35 to the standalone financial statements

The key audit matter How the matter was addressed in our audit
As at 31 March 2021 loss allowance for trade receivables of marine segment is Rs.1388 lakhs as against the total loss allowance of the Company of Rs.1400 lakhs. In view of the significance of the matter we applied the following audit procedures in this area among others to obtain audit evidence:
The Company provides for lifetime expected credit losses using simplified approach. The allowance rates are determined based on the Company's historical default rates determined through a provision matrix and is adjusted for forward-looking information specific to the debtors and economic environment. This assessment involves significant judgement and hence is considered to be a Key Audit Matter. 1. Obtained an understanding of the Company's processes and controls relating to the determination of expected credit losses of trade receivables.
2. Tested the design implementation and operating effectiveness of key controls associated with determination of expected credit losses of trade receivables.
3. Verified the inputs used in the provision matrix and evaluated the estimates for forward looking adjustments to the matrix.
4. Assessed the adequacy of the Company's disclosures on the trade receivables and the related risks under credit risk in Note 9 and Note 35 to the standalone financial statements and the compliance with relevant accounting standards.

Information Other than the Standalone Financial Statements and Auditors' Report Thereon

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon.

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.

Management's and Board of Directors' Responsibility for the Standalone FinancialStatements

The Company's management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit/loss and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) 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 were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the standalone financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements management and Board of Directors areresponsible 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 the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's 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 tofraud or error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken 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 Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the standalone financial statementsmade by the Management and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Directors use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related 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 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 in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

2. (A) 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 (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2021 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 with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(B) 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 as at 31 March 2021 onits financial position in its standalone financial statements - Refer Note 30 (a) to thestandalone financial statements; ii. The Company did not have any long-term contractsincluding derivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these financial statements since they do not pertain to thefinancial year ended 31 March 2021.

(C) With respect to the matter to be included in the Auditors' Report under section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act.

The Ministry of Corporate Affairs has not prescribed other details under Section197(16) which are required to be commented upon by us.

Annexure A to the Independent Auditors' report on the standalone financial statementsof IFB Agro Industries Limited for the year ended 31 March 2021

[Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our report 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 regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. In ouropinion this periodicity of physical verification is reasonable having regard to the sizeof the Company and the nature of its assets. In accordance with this programme certainfixed assets were verified during the year and no material discrepancies were noticed onsuch verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable propertiesincluding immovable property taken on lease and disclosed as right-of-use assets in thefinancial statements are held in the name of the Company except for one leasehold land asdetailed in Note 3(a)(ii) to the standalone financial statements.

(ii) The inventory except goods in transit and stock lying with third parties havebeen physically verified by the management during the year. In our opinion the frequencyof such verification is reasonable. For goods-in-transit subsequent goods receipts havebeen verified. The discrepancies noticed on verification between the physical stocks andthe book records were not material and has been adjusted in the books of account. Forstock lying with third parties at the year-end confirmation have been obtained by themanagement.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under Section 189 of theAct. Accordingly the provisions of paragraph 3(iii) of the Order are not applicable tothe Company.

(iv) In our opinion and according to the information and explanations given to us theCompany has not granted any loans investments guarantees and security during the yearthat would attract provisions of Section 185 of the Act. The Company has complied with theprovisions of Section 186 of the Act with respect to investments made and guaranteeprovided. The Company has not given any loan or provided any security that would attractprovisions of Section 186 of the Act.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted deposits as per the directives issued by the Reserve Bank ofIndia under the provisions of Section 73 to 76 or any other relevant provisions of the Actand the rules framed thereunder. Accordingly the provisions of paragraph 3(v) of theOrder are not applicable to the Company.

(vi) The Central Government has not prescribed the maintenance of cost records underSection 148 (1) of the Companies Act 2013 for any of the products manufactured by theCompany.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Sales-tax Goodsand Services tax Duty of customs Duty of excise Cess and other material statutory dueshave been regularly deposited during the year by the Company with the appropriateauthorities though there has been slight delay in few cases of Employees' State Insuranceand Income-tax. As explained to us by the management the Company did not have any dues inrespect of Service tax and Value added tax.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income-tax Sales-taxGoods and Service tax Duty of excise Duty of customs Cess and other material statutorydues were in arrears as at 31 March 2021 for a period of more than six months from thedate they became payable.

(b) According to the information and explanations given to us there are no dues ofIncome-tax Sales-tax Service tax Duty of customs Duty of excise Entry tax Goods andService tax Value added tax and Cess which have not been deposited with the appropriateauthorities on account of any dispute except as mentioned below:

Name of the statute Nature of dues Amount in INR lakhs Amount Paid Under Protest (in INR lakhs) Period to which the amount relates Forum where dispute is pending
The Bengal Excise Act 1909 State excise duty 1192 - 2010-11 to 2016-17 West Bengal Taxation Tribunal
West Bengal Molasses Control Act 1973 State excise duty 58 15 2003-2006 2008 and High Court of Calcutta
West Bengal Sales Tax Act 1994 Sales tax 241 - 2017-18 Senior Joint Commissioner of Commercial Taxes West Bengal
Central Sales Tax 1956 Central Sales Tax 52 - 2017-18 Senior Joint Commissioner of Commercial Taxes West Bengal

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to banks. TheCompany did not have any outstanding loan or borrowings from financial institutions orgovernment or debenture holders during the year.

(ix) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not raised any money by way ofterm loan initial public offer or further public offer (including debt instruments).Accordingly the provisions paragraph 3(ix) of the Order are not applicable to theCompany.

(x) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during theyear.

(xi) According to the information and explanations given to us and based on ourexamination of the records the Company has paid or provided for managerial remunerationin accordance with the requisite approvals mandated by the provisions of Sections 197 readwith Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly the provisions of paragraph 3(xii) of theOrder are not applicable to the Company.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act wherever applicable and the details ofsuch transactions have been disclosed in the standalone financial statements as requiredby the applicable accounting standards.

(xiv) According to the information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year. Accordingly the provisions of paragraph 3(xvi) ofthe Order are not applicable to the Company.

(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 the provisions ofparagraph 3(xv) of the Order are not applicable to the Company.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of paragraph 3(xvi) of the Order arenot applicable to the Company

Annexure B to the Independent Auditors' report on the standalone financial statementsof IFB Agro Industries Limited for the year ended 31 March 2021

Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013

[Referred to in paragraph 2(A)(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date]

Opinion

We have audited the internal financial controls with reference to financial statementsof IFB Agro Industries Limited ("the Company") as of 31 March 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 March 2021 based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to 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 Companies Act 2013 ("the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing prescribed underSection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing 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 auditors' judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

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

Meaning of Internal Financial controls with Reference to Financial Statements

A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial controls with Reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

For B S R & Co. LLP
Chartered Accountants
Firm registration No.: 101248W/W-100022
Jayanta Mukhopadhyay
Partner
Place: Kolkata Membership No.: 055757
Date: 17 June 2021 ICAI UDIN: 21055757AAAACE2183

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