Ajanta Soya Ltd Directors Report.

To The Members of Ajanta Soya Limited

REPORT ON THE FINANCIAL STATEMENTS [IND AS]

FOR THE YEAR ENDED 31st MARCH 2019

1. We have audited the accompanying Ind AS financial statements of Ajanta Soya Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2019, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the Ind AS and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2019, and its loss (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Sr. No. Key Audit Matter Auditors Response
1. Revenue Recognition Principal Audit Procedure
Revenue is recognised when the significant risk and rewards of the ownership have been transferred to the buyer recovery of consideration is probable, the associated cost and possible return of goods can be measured reliably, there is no continuing effective control/managerial involvement in respect of the goods, and the amount of revenue can be measured reliably. The timing of the transfer of control varies depending on the individual terms of the sale. We assessed the appropriateness of the revenue recognition accounting policies by comparing with applicable accounting standards.
Revenue from sale of goods in the course of ordinary activities is measured at the Fair Value of the consideration received or receivables net of returns, trade discount, and taxes and duties on behalf of government. Revenue is only recognised to the extent that it is highly probable a significant reversal will not occur. We tested the design, implementation and operating effectiveness of the managements system of IT Controls and key application controls and interfaces between the system control and key manual internal controls over the revenue recognition to assess the completeness of the revenue entries being recorded in the general accounting system.
There is a risk of revenue being overstated due to fraud, including through manipulation of rebates and discounts, resulting from pressure the management may feel to achieve performance targets at the reporting period end. We performed substantive testing by selecting the samples, Key parties were taken care of while selecting the sample, by verifying the underlying documents, which included purchase order/ bargain, managements control over dispatch of goods, delivery challan and the recovery of consideration within the credit limit as per the terms of the contract.
We performed substantive testing by selecting samples of rebate and discount transactions recorded during the year and comparing with the terms and conditions defined in the customer contract.
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 to assess whether the revenue is recognized as per policy.
2. Recoverability of Indirect tax receivables / adjustable Principal Audit Procedure
a. As at 31.03.2019, Other non-current assets in respect of Input VAT recoverable amounting Rs. 38.76 lacs. We examined the assumptions, reasons and judgements applied by the management while considering and accounting for the indirect taxes.
Refer Note No. 7 and 32(I) to the financial statement. We examined the appropriateness and reasonableness of the recoverability of the indirect taxes.
b. During the year, the company has purchased certain materials on which GST Cess was levied. a. The amount is recoverable from VAT authorities on transition to Goods and Services tax.
The sustainability and the likelihood of recoverability will depend upon final resolution by tax authorities.
The same was accounted as recoverable/ adjustable against output liability by the management. b. While examining the recoverability of indirect taxes, we observed GST Cess credit of Rs. 32.12 lacs.
Under the GST Law, the input GST Cess can only be adjusted against GST output cess liability. GST cess is not chargeable on any of the output finished products sold by the company and therefore, input cess is an expense and accordingly has now been charged to P&L account.
3. Provision for taxation, litigation and other significant provisions & contingencies Principal Audit Procedure
Accrual for tax and other contingencies requires the management to make judgements and estimates in relation to the issues and exposures arising from a range of matters relating to direct / indirect tax, claims, general legal proceedings and other eventualities arising in the regular course of business. We tested the effectiveness of controls around recording and re-assessment/ review of the contingent liabilities.
The key judgement lies in the estimation of provisions where they may differ from the future obligations. By nature, provision is difficult to estimate and includes many variables. Additionally, depending on timing, there is a risk that costs could be provided inappropriately that are not yet committed. Refer Note No. 32(I) to the financial statement. We used our professional judgement and experience to assess the value of material contingent liabilities in light of the nature of exposures, applicable regulations and related correspondence with the authorities.
We discussed the status and potential exposures in respect of significant litigation and claims with the companys management including their views on the likely outcome of each litigation and claim and the magnitude of potential exposure and sighted any relevant opinions given by the advisors.
We assessed the adequacy of disclosures made. We performed retrospective review of management judgements relating to accounting estimate included in the financial statement of prior year and compared with the outcome.
4 Loss due to misappropriation by employee(s) Principal Audit Procedure
One single case of misappropriation/ shortage of finished goods involving the connivance of some employees at a particular depot of finished goods was identified and reported to Police for criminal investigation & action. We examined the nature, circumstances and reasons for such occurrence and action taken by the management.
Had a lengthy discussion with the management as to measures take to prevent such happening again in future.
Refer Note No. 30 to the financial statement. Extended the test check for the stock and inventory valuations & quantitative details to vouch for any unidentified similar event of any significance.
Comprehensive physical verification of inventory was carried out at the close of the financial year at all storages/ depots. Revisited the internal control system of appropriateness and reasonableness of the receipt & dispatches of finished goods.
5 Loss due to fire in the preceding year but insurance claim realised during the year. Principal Audit Procedure
Refer Note No. 30 to the financial statement. We revisited the nature, circumstances and reasons for such occurrence and claim filed with the insurance company.
We examined the appropriateness of the re-estimation of loss/ surplus and verifying with the claims settled by insurance company for any financial adjustments.
Broadly verified and examined the adequacy of continuing insurance coverage over fixed assets and inventory.
The identification of remaining claims, still pending with insurance company which are not yet settled and following the prudence principles of accounting, ensured to omit any such recognition merely on anticipation.

Information Other than the Financial Statements and Auditors Report Thereon

5. The Companys Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Boards Report including Annexures to Boards Report, Business Responsibility Report, Corporate Governance and Shareholders Information, but does not include the financial statements and our auditors report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance or conclusion thereon unless separately reported.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

As of date, no such other information has yet been provided to us and thus, we have nothing to report in this regard.

Managements Responsibility for the Ind AS Financial Statements

6. The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these Ind AS financial statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows statement and statement of changes in equity of the Company in accordance with the accounting principles generally accepted in India, including Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Ind AS financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibility

7. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

8. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

a. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

b. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.

c. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

d. Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the 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 auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

e. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

9. Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

10. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

11. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

12. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

13. As required by Section 143 (3) of the Act, based on our audit, we report that:

a) We have sought and obtained all the information and explanations which to the best of 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 the Company so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in equity dealt with by this Report are in agreement with the relevant books of account.

d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards prescribed under

Section 133 of the Act.

e) On the basis of the written representations received from the directors of the Company as on 31st March, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2019 from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure "A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companys internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditors Report in accordance 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 explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

h) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements Refer Note No. 32;

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

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

14. As required by the Companies (Auditors Report) Order, 2016, issued by the Central Government of India in terms of subsection (11) of section 143 of the Act ("the Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure "B", a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For PAWAN SHUBHAM & CO
Chartered Accountants
Firm Registration Number: 011573C
CA Pawan Kumar Agarwal
Partner
Membership Number:092345
Place of signature : New Delhi
Date : 30th May, 2019

ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION 143 OF THE ACT

[Referred to in paragraph 13(f) of the Independent Auditors Report of even date to the members of Ajanta Soya Limited on the Ind

AS financial statements for the year ended 31st March. 2019]

1. We have audited the internal financial controls over financial reporting of Ajanta Soya Limited ("the Company") as of 31st March, 2019 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

2. The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility

3. Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

6. A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that:

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

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

8. Considering the incident reported in clause (x) of Annexure B, with respect to the nature, timing, and extent of audit tests applied in our audit of the financial statements of the Company for the year ended March 31,2019, in our opinion, the Company has in all material respects, maintained adequate internal financial controls over financial reporting and such internal control over financial reporting were operating effectively as of 31st March 2019; based on control criteria established by the company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by "the Institute of Chartered Accountants of India".

For PAWAN SHUBHAM & CO
Chartered Accountants
Firm Registration Number: 011573C
CA Pawan Kumar Agarwal
Partner
Membership Number:092345
Place of signature : New Delhi
Date : 30th May, 2019

ANNEXURE "B" TO THE INDEPENDENT AUDITORS REPORT

REPORT UNDER THE COMPANIES (AUDITORS REPORT) ORDER 2016 (CARO)

[Referred to in paragraph 14 of the Independent Auditors Report of even date to the members of Ajanta Soya Limited on the Ind AS financial statements for the year ended 31st March. 2019]

i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with that plan, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the company and nature of its fixed assets.

(c) The title deeds of immovable properties, as disclosed in Note 2 property plant & equipments to the financial statements, are held in the name of the Company.

ii. The physical verification of inventory (excluding stocks in transit) has been conducted at year end by the Management. In respect of stock in transit, these have substantially been confirmed and reconciled by the company. The material discrepancies noticed on physical verification of inventory as compared to book records have been properly dealt with in books of accounts.

iii. The Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act.

iv. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 in respect of the loans and investments made, and guarantees and security provided by it.

v. The Company has not accepted any deposits from public.

vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. (a) According to the records of the Company and information and explanations given to us, the Company has been regular in depositing the undisputed statutory dues including provident fund, employees state insurance, income tax, Investor education and protection fund, goods and service tax, sales tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it with the appropriate authorities except a demand of Rs.36,369/- raised under VAT in AY 2017-18 which was outstanding for more than six months as at end of the year. The above demand has been deposited on 25.04.2019 by the company.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of Income Tax, goods and service tax, service tax, value added tax/ sales tax, entry tax, customs duty and excise duty as at 31st March, 2019 which have not been deposited on account of a dispute are as follows:

Name of the Statute Nature of the Dues Amount ( In lacs) Amount deposited under protest ( In lacs) Period to which the amount relates Forum where dispute is pending
Central/State Sales Tax Entry Tax 28.95 20.90 AY 2014-15 Rajasthan Tax Board, Ajmer
Income Tax Act Income Tax Demand 0.29 - AY 2012-13 CIT (Appeals)
FSSAI Penalty 4.00 2.00 FY 2018-19 Food Safety appellate tribunal

viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the balance sheet date.

ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments). Term loans have been applied for the purposes for which they were obtained.

x. According to the information and explanations given to us, we came across one single instance of misappropriation of finished goods valuing at Rs.50.78 lacs by some identified employee(s), which was discovered on physical count of stock by the company at one of the sales depot.

During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither came across any other instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

xi. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

xiv. During the period under review the company has not made any preferential allotment or private placement of shares or fully or partly paid convertible debentures and hence reporting under clause 3 (xiv) is not applicable to the company.

xv. The Company has not entered into any non-cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.

For PAWAN SHUBHAM & CO
Chartered Accountants
Firm Registration Number: 011573C
CA Pawan Kumar Agarwal
Partner
Membership Number:092345
Place of signature : New Delhi
Date : 30th May, 2019