The Members of
R K B AGRO INDUSTRIES LIMITED Raichur.
Report on the IND AS Financial Statements
We have audited the accompanying IND AS financial statements of R K B AGRO INDUSTRIESLIMITED ("the Company") which comprise the Balance Sheet as at 31st March 2018and the Statement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information (herein afterreferred to as financial statements).
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these financial statements that give a true and fair view of the stateof affairs (financial position) Profit or Loss (financial performance including OtherComprehensive Income) the Cash Flows and Changes in Equity of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (IND AS) prescribed under Section 133 of the Act read with Companies(Indian Accounting Standards) Rules 2015 as amended.
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 IND AS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made there under and the Orderissued under section 143(11) of the Act.
We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under Section 143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the IND AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the IND AS financial statements.
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 37(a) to 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 basis forqualified opinion paragraph the aforesaid IND AS financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India including the INDAS of the State of Affairs (financial position) of the Company as at 31st March 2018 andits Profit or Loss (financial performance including Other Comprehensive Income) the CashFlows and Changes in Equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
I. 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 recordsshowing full particulars including quantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management during the yearand no 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 noticedon verification 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 securedor unsecured to companies firms limited liability partnership firms or other partiescovered in the register maintained under section 189 of the Companies Act 2013 ("theAct') hence the question of grant of such loans being prejudicial to company's interestschedule of repayment of interest and principal receipt of principal and interest onregular basis and steps for recovery of 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 isregular in depositing with the appropriate authorities undisputed statutory dues includingProvident Fund Employees' State Insurance Income Tax Sales Tax Service Tax Goods& Services Tax Duty of Customs Duty of Excise Value Added Tax Cess and othermaterial statutory dues to 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 2018 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 the dues which have not been deposited on account ofdispute.
(vi) 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 paid by the company andprovided is in compliance with the provisions of Section 197 read with Schedule V of theAct.
(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.36)
(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.
II. As required by section 143(3) of the Act we report that:
(i) 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;
(ii) 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;
(iii) The Balance Sheet Statement of Profit and Loss Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account;
(iv) In our opinion the aforesaid financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015.
(v) On the basis of the written representations received from the directors as on31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31stMarch 2018 from being appointed as a director in terms of Section164(2) of the Act.
(vi) 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"
(vii) 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:
(a) The Company does not have any pending litigation which would impact its financialposition in its IND AS financial statements.
(b) As explained to us the Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.
(c) There were no amounts which were required to be transferred to the InvestorEducation and Protection fund.
(d) The disclosure requirement as envisaged in Notification G.S.R 308 (E) dated30thMarch 2017 is not applicable to the Company for the year.
|For GANAPATH RAJ & CO. |
|CHARTERED ACCOUNTANTS |
|FIRM REG NO:-000846S |
|(C. GANAPATH RAJ) |
|MEMBERSHIP NO.022955 |
|PLACE : BANGALORE |
|DATE : 30 July 2018 |
ANNEXURE A- TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE
ON THE FINANCIAL STATEMENTS OF R K B AGRO INDUSTRIES LIMITED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of R K B AgroIndustries Limited ("the Company") as of March 312018 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.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our auditing 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) Providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) Provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.
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.
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 312018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofinternal financial controls over financial reporting issued by the Institute of CharteredAccountants of India.
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. |
|CHARTERED ACCOUNTANTS |
|FIRM REG NO:-000846S |
|(C. GANAPATH RAJ) |
|MEMBERSHIP NO.022955 |
|PLACE : BANGALORE |
|DATE : 30 July 2018 |