To the Members of Orbit Exports Limited
Report on the audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Orbit ExportsLimited ("the Company") which comprise the Standalone Balance Sheet as atMarch 31 2020 the Standalone Statement of Profit and Loss (including Other ComprehensiveIncome) the Standalone Statement of Cash Flows and the Standalone Statement of Changes inEquity for the year then ended and notes to standalone financials statements including asummary of significant accounting policies and other explanatory information (hereinafterreferred to as "the standalone financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Accounting Standards prescribed under section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2020 and its profit (including othercomprehensive income) changes in equity and its cash flows for the year ended on thatdate.
Basis for Opinion
We conducted our audit of the standalone financial statement in accordance with theStandards 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 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 theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules framed thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the ICAI's Codeof Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone financialstatement.
Key audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters:
|Sr.No Key audit Matters (KAMs) ||How the KAMs were addressed in our audit |
|1 implementation of new accounting standard on revenue recognition Refer note 1.5 (a) of the Statement of Significant Accounting Policies. || Our audit approach consisted testing of the effectiveness of the internal controls relating to such process including substantive testing which included review of terms and conditions of selected sample of existing contracts and new contracts. |
|The accuracy of recognition measurement presentation and disclosure of revenues and other related balances in terms of Ind AS 115 "Revenue from Contracts with Customers" involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue. || We inter alia tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations determination of transaction price criteria relating to transfer of control over the promised goods and measurement and recording of revenue. |
| || We performed cut-off testing for samples of revenue transactions recorded before and after the financial year-end date by comparing with relevant underlying documentation which included goods dispatch notes and shipping documents to assess whether the revenue was recognized in the correct period. |
information Other than the Standalone Financial Statements and Our report thereon
The Company's Management and Board of Directors are responsible for the preparation ofthe other information. The other information comprises the information included in AnnualReport but does not include the standalone financial statements and our report thereon.The entire Annual Report is expected to be made available to us after the date of thisreport.
Our opinion on the standalone financial statements does not cover the other informationand we will 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 in doing so consider whether the other information ismaterially inconsistent with the standalone financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
When we read the Annual Report if we conclude that there is a material misstatementtherein we are required to communicate the matter to Those Charged With Governance andtake appropriate actions in accordance with Standards on Auditing.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
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 financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including Ind ASand relevant provisions of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate 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 standalone financial statements that give a true andfair 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 management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
The Board of Directors are 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 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 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 system in place and the operating effectiveness ofsuch 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 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.
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.
Materiality is the magnitude of the misstatement in the standalone financial statementthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statement may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and evaluating the results of our work; and (ii) to evaluate the effects of anyidentified misstatements in the standalone financial statement.
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 auditor's 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 (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Act we givein the "Annexure A" a statement on the matters specified in the paragraph 3 and4 of the 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 (IncludingOther Comprehensive Income) the Standalone Statement of Cash Flows and the StandaloneStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account;
d) In our opinion the aforesaid the standalone financial statements comply with theAccounting Standards specified under section 133 of the Act read with relevant rulesissued thereunder and relevant provisions of the Act;
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 with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols with reference to standalone financial statements;
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 opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the 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 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. The Company has disclosed details of pending litigations however it does not haveadverse impact on its financial position. Refer note 4.03 to standalone financialstatements;
ii. The Company did not have any material foreseeable losses on long term contractsincluding derivative contracts; and
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
Annexure A - referred to in paragraph 1 under "Report on Other Legal andRegulatory Requirements" of our report on even date to the members of the Company onthe standalone financial statements for the year ended March 31 2020
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its property plant and equipment;
(b) The Company has a regular programme of physical verification of property plant andequipment by which all property plant and equipment of the Company are being verified ina phased manner over a period of three year which in our opinion is reasonable havingregard to the size of the Company and nature of its business. Pursuant to the program aportion of property plant and equipment has been physically verified by the managementduring the year and no material discrepanicies were noticed on verification conductedduring the year as compared with the book records; and
(c) According to the information and explanation given to us and on the basis of ourexamination of records of the Company the title deeds of immovable properties are held inthe name of the Company.
(ii) (a) The inventory (excluding stocks with third parties) has been physicallyverified by the Management during the year. In respect of inventory lying with thirdparties these have substantially been confirmed by them. In our opinion the frequency ofverification is reasonable; and
(b) The discrepancies noticed on physical verification of inventory as compared to bookrecords were not material and have been appropriately dealt with in the books of accounts.
(iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained undersection 189 of the Act. Accordingly paragraph 3(iii)(a) to (c) of the Order regardingterms and conditions of such loans and repayment of such loans etc. are not applicable tothe Company.
(iv) The Company has not granted any loans or provided any guarantees or security tothe parties covered under section 185 of the Act. The Company has complied with theprovisions of section 186 of the Act in respect of investments made or loans or guaranteeor security provided to the parties covered under that section.
(v) The Company has complied with the directives issued by the Reserve Bank of Indiaand the provisions of section 73 to 76 or any other relevant provisions of the Act andthe rules framed there under to the extent applicable. We are informed by the Managementthat no order has been passed by the Company Law Board or National Company Law Tribunal orReserve Bank of India or any court or any other tribunal in this regard.
(vi) The Central Government has prescribed maintenance of cost records under section148(1) of the Act for the products manufactured by the Company. We have broadly reviewedthe books of account maintained and are of the opinion prima facie that the prescribedaccounts and records have been made and maintained by the Company. We have not howevermade a detailed examination of the records with a view to determine whether they areaccurate or complete.
(vii) (a) The Company has generally been regular in depositing undisputed statutorydues including provident fund employees' state insurance income tax sales tax servicetax duty of customs duty of excise value added tax goods and services tax cess andother applicable statutory dues with the appropriate authorities. No undisputed statutorydues payable were in arrears as at March 31 2020 for a period of more than six monthsfrom the date they became payable.
(b) According to the information and explanation given to us there are no outstandingdisputed dues payable by the Company in case of income tax sales tax service tax dutyof customs duty of excise or value added tax or cess as on March 31 2020.
(viii) The Company has not defaulted in repayment of dues to any financialinstitutions banks government or debenture holders.
(ix) The Company has raised term loans during the year which have been applied for thepurpose for which they were raised.
(x) To the best of our knowledge and belief and according to the information andexplanations given to us we report that no fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year.
(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 requsite approvals mandated by the provisions of thesection 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanation given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable 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 section 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.
(xiv) Based on our audit procedures performed for the purpose of reporting the true andfair view of standalone financial statements and according to information and explanationsgiven by the management the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year.Accordingly paragraph 3(xiv) of the Order is not applicable to the Company.
(xv) Based on our audit procedures performed for the purpose of reporting the true andfair view of the standalone financial statements the Company has not entered intonon-cash transactions with directors. We have been informed that no such transaction havebeen entered into with person connected with directors. Accordingly paragraph 3(xv) ofthe Order is 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.
Annexure B - referred to in paragraph 2(f) under "Report on Other Legal andRegulatory Requirements" of our Independent Auditor's report of even date to themembers of Orbit Exports Limited on the Standalone Financial Statements for the year endedMarch 31 2020
Report on the Internal Financial Controls under section 143(3)(i) of the Act
We have audited the internal financial controls with reference to standalone financialstatements of Orbit Exports Limited ("the Company") as of March 31 2020in conjunction with our audit of the standalone financial statements of the Company forthe year ended on that date.
In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to standalone financial statements and suchinternal financial controls with reference to standalone financial statements wereoperating effectively as at March 31 2020 based on the internal controls with referenceto standlone financial statements criteria established by the Company considering theessential components of internal controls stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting ( "Guidance Note") issued by theInstitute of Chartered Accountants of India.
Management's Responsibility for Internal Financial Controls with reference toStandalone Financial Statements
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal controls with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting ("Guidance Note") issued by the Institute of Chartered Accountants ofIndia ("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
Auditor's Responsibility for Internal Financial Controls with reference to StandaloneFinancial Statements
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 issued by the ICAI anddeemed to be prescribed under section 143(10) of the Act to the extent applicable to anaudit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the ICAI. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls with reference to financialstatements was established and maintained and if such controls operated effectively in allmaterial respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statements and theiroperating effectiveness.
Our audit of internal financial controls with reference to financial statementsincluded obtaining an understanding of internal financial controls with reference tofinancial statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk both applicable to an audit of Internal Financial Controls and both issuedby the ICAI.
The procedures selected depend on the auditor's judgment including the assessment ofthe risks of material misstatement of the standalone financial statements whether due tofraud 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 systemwith reference to financial statements.
Meaning of Internal Financial Controls with reference to Standalone FinancialStatements
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 includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the Company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation ofstandalone financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorizations of management and directors of the Company; and (3) providereasonable assurance regarding prevention or timely detection of unauthorized acquisitionuse or disposition of the Company's assets that could have a material effect on thestandalone financial statements.
inherent Limitations of internal Financial Controls with reference to StandaloneFinancial Statements
Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial controls with reference to standalone financial statements maybecome inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate.
| ||For G. M. Kapadia & Co. Chartered Accountants Firm's Registration No: 104767W |
|Place : Mumbai. Dated : June 22 2020 ||Atul Shah Partner Membership No: 039569 UDIN: 20039569AAAAEU5317 |