TO THE MEMBERS OF NAGREEKA EXPORTS LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements ofNagreeka Exports Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2021 the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Changes in Equity and the Statement of Cash Flows for the year ended onthat date and a summary of the significant accounting policies and other explanatoryinformation.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2021the loss and total comprehensive income changes in equity and its cash flows for the yearended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that in our professionaljudgement were of most significance in our audit of the standalone financial statementsof the current period. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. We have determined the matters describedbelow to be the key audit matters to be communicated in our report.
|Sr. No. Key Audit Matter (KAM) ||Auditor's Response |
|1. The Company is subject to a number of legal and tax related claims which have been disclosed / provided for in the financial statements based on the facts and circumstances of each case ||Our audit procedures included the following:- |
| || Gained an understanding of the process of identification of claims litigations and contingent liabilities and identified key controls in the process. For selected controls we have performed tests of controls. |
| Taxation and litigation exposures have been identified as a key audit matter due to the complexities involved in these matters timescales involved for resolution and the potential financial impact of these on the financial statements. Further significant management judgement is involved in assessing the exposure of each case and thus a risk that such cases may not be adequately provided for or disclosed. ||Obtained the summary of Company's legal and tax cases and critically assessed management's position through discussions with the Head of Tax and operational management on both the probability of success in significant cases and the magnitude of any potential loss. |
| ||Engaged tax specialists to technically appraise the tax positions taken by management with respect to local tax issues. |
| ||Assessed whether management assessment of similar cases is consistent across the divisions or that differences in positions are adequately justified. |
| ||Assessed the relevant disclosures made within the financial statements to address whether they appropriately reflect the facts and circumstances of the respective tax and legal exposures and the requirements of relevant accounting standards |
|2. Recoverability of unutilized Minimum ||Our audit procedures included the following:- |
|Alternate Tax (MAT) creditsAs of March 31 2021 the Company has recognized MAT credits of Rs.381.06 Lakhs included under deferred tax assets that can be utilized against future tax liabilities. ||Obtained and analysed the future projections estimated by management assessing the key assumptions used including the analysis of the consistency of the actual results obtained by the various segments with those projected in the previous year. We further obtained evidence of the approval of the budgeted results included in the current year's projections and the reasonableness of the future cash flow projections and the consistency of those projections with those used in other areas of estimation such as those used for assessing the recoverability of assets. |
|The analysis of the recoverability o1 such deferred tax assets has been identified as a key audit matter because the assessment process involves judgement regarding the future profitability and the likelihood of the realization of these assets in particular whether there will be taxable profits in future periods that support the recognition of these assets. This requires assumptions regarding future profitability which is inherently uncertain. Accordingly the same is considered as a key audit matter ||Tested the completeness and accuracy of the MAT credits |
Information Other than the Standalone Financial Statements andAuditor's Report Thereon
The Company's Board of Directors is responsible for the preparation ofthe other information. The other information comprises the information included in theManagement Discussion and Analysis Board's Report including Annexures to Board's ReportBusiness Responsibility Report Corporate Governance and Shareholder's Information butdoes not include the standalone financial statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.
If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.
Responsibilities of Management and Those Charged With Governance forthe Standalone Financial Statement
The Company's Board of Directors is 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 financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgements and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the standalone financial statements Board of Directors isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the Company'sfinancial reporting process.
Auditor's Responsibilities for the Audit of the Standalone FinancialStatements
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgement and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
Obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act based on our audit wereport that:
a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income Statement of Changes in Equity and the Statement of Cash Flow dealtwith by this Report are in agreement with the relevant books of account.
d) In our opinion the aforesaid standalone financial statements complywith the Ind AS specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
e) On the basis of the written representations received from thedirectors as on March 31 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2021 from being appointed as a director in termsof Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure A". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.
g) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as amended Inour opinion and to the best of our information and according to the explanations given tous the remuneration paid by the Company to its directors during the year is in accordancewith the provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us:
i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements as stated in Note No 30 to the Ind ASfinancial statements.
ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred tothe Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government in terms of Section 143(11) ofthe Act we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order.
| ||For B Nath & Co |
| ||Chartered Accountants |
| ||(Firm's Registration No. 307057E) |
| ||Gaurav More |
| ||Partner |
| ||(Membership No.306466) |
|Place: Kolkata ||UDIN- 21306466AAAACC6018 |
|Date: June 30 2021 || |
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financialreporting of Nagreeka Exports Limited ("the Company") as of March 31 2021 inconjunction with our audit of the Ind AS financial statements of the Company for the yearended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India ('ICAI').These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the Ind AS financial statements whether due to fraud orerror.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of 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 financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2021 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
|For B Nath & Co |
|Chartered Accountants |
|(Firm's Registration No.307057E) |
|Gaurav More |
|(Partner) (Membership No. 306466) |
|UDIN- 21306466AAAACC6018 |
|Place: Kolkata Date: June 30 2021 |
The Annexure referred to in Independent Auditors' Report to the membersof the Company on the Ind AS financial statements for the period ended March 31 2021 wereport that:
(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of the fixed assets;
(b) As explained to us fixed assets have been physically verified bythe management at reasonable intervals; no material discrepancies were noticed on suchverification;
(c) As per information and explanation given to us by the managementall the title deeds of the immovable properties are held in the name of the Company;
(ii) As explained to us inventories were physically verified during theperiod by the management at reasonable intervals;
(iii) According to the information and explanations given to us and onthe basis of our examination of the books of account the Company has not granted anyloans secured or unsecured to companies firms and limited liability partnerships orother parties covered in the register maintained under section 189 of the Companies Act2013. Consequently the provisions of paragraph iii(a) iii(b) and iii(c) of the Order arenot applicable to the Company and hence not commented upon;
(iv) In our opinion and according to information and explanations givento us the Company has complied with the provision of section 185 of the Act with respectto the Loans and Investment made. In regards to section 186 of the Act Company has notgiven loans guarantees or provided any securities to other in excess of hundred percentof free reserves and thus provision of section has been complied with;
(v) The Company has not accepted any deposit from the public coveredunder Section 73 to 76 of the Companies Act 2013. Therefore the provisions of paragraph3(v) of the Order is not applicable to the Company;
(vi) According to the information and explanations given to us in ouropinion the Company have prima facie made and maintained the prescribed cost recordspursuant to the Companies (Cost Records and Audit) Rules 2014 as amended prescribed bythe Central Government under subsection (1) of Section 148 of the Companies Act 2013. Wehave however not made a detailed examination of the cost records with a view todetermining whether they are accurate or complete;
(vii) According to the information and explanation given to us inrespect of statutory dues:
a) The Company has generally been regular in depositing undisputedstatutory dues including Provident Fund Employees' State Insurance Income Tax Goodsand Service Tax Value Added Tax Customs Duty Excise Duty Cess and other materialstatutory dues applicable to it with the appropriate authorities.
b) There were no undisputed amounts payable in respect of ProvidentFund Employees' State Insurance Income Tax Sales Tax Value Added Tax Goods andService Tax Customs Duty Excise Duty Cess and other material statutory dues in arrearsas at March 31 2021 for a period of more than six months from the date they becomepayable.
c) Details of dues of Income Tax Service Tax Sales Tax and CustomDuty which have not been deposited as at March 31 2021 on account of dispute are givenbelow:
|Name of Statute ||Nature of Dues ||Amount (Rs in lacs) ||Period to which amount relates ||Forum where dispute is Pending |
|Income Tax Act 1961 ||Income Tax ||4.92 ||AY 2017-18 ||ITAT Kolkata |
|MVAT Rules 2005 ||Sales Tax ||80.13 ||2009-2010 20112012 ||JC Sales Tax |
|Goods and Service Tax Act 2017 ||GST ||3.71 ||2018-2019 ||GST Appellate Authority |
(viii) The Company has not defaulted in repayment of dues to financialinstitutions banks during the period.
(ix) According to information and explanation given to us the Companyhas not raised moneys by way of initial public offer or further public offer (includingdebt instruments) and term loans during the year ended March 31 2021. Accordinglyparagraph 3(ix) of the Order is not applicable.
(x) Based on the audit procedures performed and the information andexplanations given to us we report that no material fraud on or by the Company has beennoticed or reported during the period nor have we been informed of such case by themanagement;
(xi) According to information and explanation given to us the Companyhas paid managerial remuneration within the limit specified under section 197 of theCompanies Act 2013;
(xii) In our opinion and according to the information and explanationgiven to us the Company is not a Nidhi Company and hence the paragraph 3(xii) is notapplicable;
(xiii) According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with section 177 and 188 of the Act where applicable and detailsof such transactions have been disclosed in the financial statements as required by theapplicable Indian accounting standards;
(xiv) According to information and explanation given to us the Companyhas not made any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the period under review;
(xv) According to information and explanation given to us the Companyhas not entered into any non-cash transactions with directors or persons connected withhim. Accordingly the paragraph 3(xv) is not applicable the Company;
(xvi) In our opinion and on the basis of information and explanationgiven to us by the management the Company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934.
|For B Nath & Co |
|Chartered Accountants |
|(Firm's Registration No.307057E) |
|Gaurav More |
|(Partner) (Membership No. 306466) |
|UDIN- 21306466AAAACC6018 |
|Place: Kolkata Date: June 30 2021 |