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RKB Agro Industries Ltd.

BSE: 530891 Sector: Others
NSE: N.A. ISIN Code: INE740A01013
BSE 05:30 | 01 Jan RKB Agro Industries Ltd
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RKB Agro Industries Ltd. (RKBAGROINDUST) - Auditors Report

Company auditors report

To

The Members of

R K B AGRO INDUSTRIES LIMITED Raichur.

Report on the Audit of Financial Statements Qualified Opinion

We have audited the accompanying IND AS financial statements of RKB AGRO INDUSTRIESLIMITED("the Company") which comprise the Balance Sheet as at March 31 2020and the Statement of Profit and Loss(including other comprehensive income) Statement ofChanges in Equity and Statement of Cash Flows for the period then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information (hereinafter referred to as "the financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matters described in the Basisfor Qualified Opinion section of our report the aforesaid IND AS financialstatements give the information required by the Act in the manner so required and give atrue and fair view in conformity with the accounting principles generally accepted inIndia including the IND AS of the state of affairs (financial position) of the Companyas at 31st March 2020 and its financial performance including other comprehensive incomeand cash flows for the year ended on that date.

Basis for Qualified Opinion

(i) The company has not ascertained from the creditors as to whether they areregistered as Micro or Small Enterprise under Micro Small & Medium EnterprisesDevelopment Act 2006 and as such the particulars of dues if any to such enterprises asrequired under the said Act are not disclosed. Moreover interest if any accrued to suchenterprises is not determined and provided for. (Refer clause II (4) of Note 2 to theFinancial Statements). Consequential impact on profit for the year and Trade payables asat the year end is not ascertainable.

(ii) The company has accounted the Retirement Gratuity on cash basis as againstactuarial valuation basis as envisaged in IND AS 19 notified under Rule 7 of the Companies(Accounts) Rules 2014 and disclosures required under this standard is not disclosed.Consequential impact on the accounts is not ascertainable. (Refer clause 2.3.5(b) of Note2 and Note 36(a) to the Financial Statements)

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 theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and we have fulfilledour other ethical responsibilities in accordance with these requirements and the ICAI'sCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our qualified opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report:

Sr. Key Audit Matter No. Auditor's Response
1. Information Technology Systems and Audit procedures Performed
Controls on Accounting Software
We have performed procedures to ensure the financial data entered in the Accounting software captures all accounting data.
Our audit approach consisted testing of design and operating effectiveness of internal controls and substantive testing around the Accounting software system.
We performed sufficient test of details as a part of our audit.
We have performed the test of details for areas where the
Management has implemented manual controls as at the year end.
The combination of these tests of controls and procedures performed gave us a sufficient evidence to enable us to rely on the operations of accounting software system for the purpose of the audit of the financial statements

Information Other than the Financial Statements and Auditors 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 Report BusinessResponsibility Report Corporate Governance Report and Shareholder's information but doesnot include the standalone financial statement and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of the our audit or otherwise appears to be materially misstated.

If based on the work we have performed on the other information obtained prior to thedate of this auditors report we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

Management's Responsibilities for the Financial Statements

The Company's Board of Directors is responsible for the preparation and presentation ofthese IND AS financial statements that give a true and fair view of the financialposition financial performance changes in equity and the cash flows of the Company inaccordance with the accounting principles generally accepted in India specified underSection 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance 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 accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements the management of the Company is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

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

Auditor's Responsibilities 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 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 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.

" Obtain an understanding of internal controls relevant to the audit in order todesign audit procedures that are appropriate in the circumstances but not for the purposeof expressing an opinion on effectiveness of the Company's internal financial 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

" Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatement in the financial statements thatindividually or in aggregate make it probable that the economic decisions of a reasonablyknowledgeable user of the financials statements may be influenced. We considerquantitative materiality and qualitative factors in (i) Planning the scope of our work andin evaluating the results of our work; and (ii) to evaluate the effect of any identifiedmisstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings that we identifyduring 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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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 sub-section (11) of section 143 ofthe Act and in terms of the information and explanations sought by us and given by thecompany we give a statement on the matters specified in paragraphs 3 and 4 of the Order.

(i) As per the books and records examined by us in the normal course of audit based onsuch audit check that we considered necessary and appropriate and to the best of ourknowledge and belief we state that :

a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) The fixed assets have been physically verified by the management during the year andno material discrepancies were noticed on such verification.

c) The title deeds of immovable properties are held in the name of the company.

(ii) The Inventory has been physically verified during the year by the management. Inour opinion the frequency of verification is reasonable. The discrepancies noticed onverification between the physical stocks and the book records were not material havingregard to the nature of business and volume of operations and the same have been properlydealt with in the books of accounts.

(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnership Firms or other parties covered in the register maintainedunder section 189 of the Companies Act 2013 ("the Act') hence the question of grantof such loans being prejudicial to company's interest schedule of repayment of interestand principal receipt of principal and interest on regular basis and steps for recoveryof overdue amount for more than 90 days as per clause (iii) of the Order does not arise.

(iv) The company has not granted any loans investments nor given guarantees/securityto any party attracting the provisions of section Sec 185 and 186 of the Companies Act2013 hence the question of compliance with the said provisions as per clause (iv) of theOrder does not arise.

(v) The company has not accepted any deposits from the public hence the question ofcompliance with the directives issued by the Reserve Bank of India and the provisions ofsection 73 to 76 and other relevant provisions of the Companies Act 2013 and the rulesframed there under as per clause (v) of the Order does not arise.

(vi) We are informed that maintenance of cost records has not been prescribed by theCentral Government under section 148(1) of the Companies Act 2013 in respect of theCompany's Products.

(vii) a) According to the records of the Company the company is regular in depositingwith the appropriate authorities undisputed statutory dues including Provident FundEmployees' State Insurance Income Tax Sales Tax Service Tax Goods & Services TaxDuty of Customs Duty of Excise Value Added Tax Cess and other material statutory duesto the extent applicable to it.

b) According to the information and explanation given to us and based on the recordsverified by us we state that no undisputed amount payable in respect of Provident fundEmployees State Insurance Income Tax Sales Tax Service Tax Goods & Services TaxValue Added Tax Duty of Customs Duty of Excise or Cess which have remained outstandingas at 31st March 2020 for a period of more than six months from the date they becamepayable.

c) According to the information and explanations given to us there are no dues ofIncome Tax Sales Tax Value Added Tax Service Tax Goods & Services Tax Duty ofCustoms Duty of Excise or Cess which have not been deposited on account of dispute.

(viii) In our opinion the Company has not defaulted in repayment of dues to banks. Thecompany has neither borrowed any loans from Financial Institutions other than banksGovernment nor issued any debentures and consequently the question of default in repaymentdoes not arise.

(ix) The company has not raised any money by way of initial public offer or furtherpublic offer and the company has not taken any term loans from banks or financialinstitutions during the year.

Hence the question of application of moneys raised by way of initial public offerfurther public offer and term loans for the purpose for which they were raised does notarise.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no material fraud by the company or on the company by its officers oremployees has been noticed or reported during the year.

(xi) According to the information and explanations given to us and on the basis of ourexamination of the records of the company managerial remuneration has not been paidduring the year hence compliance with the provisions of Section 197 read with Schedule Vof the Act is not applicable

(xii) The Company is not a Nidhi Company. Therefore the provisions of clause (xii) ofthe Order are not applicable to the Company.

(xiii) In our opinion the company has complied with the provisions of Sections 177 and188 of the Act and the disclosure of such transactions in the Financial Statements etc.as required by applicable Accounting Standards in respect of transactions entered intowith related parties.(Refer Note No.35)

(xiv) The company has not made any preferential allotment/ private placement of shares/fully or partly convertible debentures during the year hence the requirement ofcompliance with provisions of Section 42 of the Act and utilization of amounts so raisedfor the purpose for which the funds were raised as per clause (xiv) of the Order does notarise.

(xv) In our opinion the Company has not entered into any non-cash transactions withdirectors or persons connected with him; hence the requirement of compliance to provisionsof Section 192 of the Act as per clause (xv) of the Order does not arise.

(xvi) The company is not required to be registered under Sec 45-IA of the Reserve Bankof India Act 1934 hence the requirements of clause (xvi) of the Order does not arise

2. As required by section 143(3) of the Act we report that:

a) We have sought all the information and explanations which to the best of ourknowledge 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 company has not appointed separate branch auditor under section 143(8) of theAct.

d) the Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;

e) In our opinion the aforesaid financial statements comply with the Indian AccountingStandards specified under Section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015.

f) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of Section164(2) of the Act.

g) 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 A".

h) With respect to the other matter 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 explanationgiven to us the no remuneration is paid by the Company to its directors during the yearhence the provisions of section 197 of the Act is not applicable.

i) 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 litigation which would impact its financialposition in its financial statements

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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

For GANAPATH RAJ & CO

CHARTERED ACCOUNTANTS

FIRM REG NO:-000846S

(C. GANAPATH RAJ)

PARTNER

MEMBERSHIP NO.022955

PLACE:-BANGALORE

DATE: - 31 July 2020

UDIN:-20022955AAAABF2878

ANNEXURE A- TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIALSTATEMENTS OF RKB AGRO INDUSTRIES LIMITED

Report on the Internal Financial Controls under Clause

(i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of RKB AgroIndustries Limited ("the Company") as of March 312020 in conjunction with ouraudit of the financial statements of the company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial control based on the internal control over financial reporting criteriaestablished by the company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting('Guidance Note") 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.

Auditor's Responsibility

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 and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act2013 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 over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

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

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that

(1) Pertain to the maintenance 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 authorizations of management and directors of the company; and

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

Inherent Limitations of Internal Financial Controls Over Financial reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion :

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 312020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note.

Other Matter :

The Company did not have a written/ documented framework for internal financialcontrols over financial reporting. However based on the fact the transactions beinglimited/less complex and there being very few levels of management we have relied upontesting of controls through direct inquiry combined with other procedures such asobservation of activities inspection of less formal documentation etc. to obtainsufficient audit evidence about the internal financial controls over financial reportingand its operating effectiveness as at the year end.

Our opinion is not qualified in respect of the aforesaid matter.

For GANAPATH RAJ & CO. CHARTEREDACCOUNTANTS

FIRM REG NO:-000846S

^C. GANAPATH RAJ

PARTNER MEMBERSHIP

NO.022955

PLACE: - BANGALORE

DATE: - July 31 2020

UDIN:-20022955AAAABF2878