To,
The Members of
Baba Agro Food Limited
(Formerly known as Sri Krishna Metcom Limited)
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of Baba Agro Food
Limited("the Company"), which comprise the Balance Sheet as at 31st March,
2020, the Statement of Profit and Loss, Statement of Changes in Equity and Statement of
Cash Flow for the year then ended, and notes to the standalone financial statements,
including a summary of significant accounting policies and other explanatory information
(hereinafter referred to as "standalone financial statements").
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid standalone financial statements give the information required
by the Companies
Act, 2013 ("the Act") in the manner so required and give a true and fair view
in conformity with the accounting principles generally accepted in India, of the state of
affairs of the Company as at 31st March, 2020, and its profit including other
comprehensive income, changes in equity and its cash flow for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing specified under
section 143(10) of the Act. Our responsibilities under those Standards are further
described in the
Auditor s Responsibilities for the Audit of the standalone 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 ( ICAI ) together with the
ethical requirements that are relevant to our audit of the standalone financial statements
under the provisions of the Act 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 on the Standalone Financial Statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the Standalone Financial Statements for the financial year
ended March 31, 2020. These matters were addressed in the context of our audit of the
Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. For each matter below, our description of
how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be
communicated in our report. We have fulfilled the responsibilities described in the
Auditors responsibilities for the audit of the Standalone Financial Statements section of
our report, including in relation to these matters. Accordingly, our audit included the
performance of procedures designed to respond to our assessment of the risks of material
misstatement of the Standalone Financial Statements. The results of our audit procedures,
including the procedures performed to address the matters below, provide the basis for our
audit opinion on the accompanying Standalone Financial Statements.
| The key audit matters |
How our audit addressed the key audit matter |
| 1. Uncertainty about Covid 19 pandemic impact on financial position of the company |
|
| Inventory: |
Principal audit procedures performed: |
| Determination of net realizable value of inventory at the year ended March 31, 2020,
the Company has inventory with the carrying value Rs. 9,937 Lakhs. The inventory is valued
at the lower of cost and net realizable value. |
• We understood and tested the design and operating effectiveness of controls as
established by the management in determination of net realizable value of inventory. |
| We considered the value of the inventory of as a key audit matter given the relative
size of the balance in the financial statements and significant judgement involved in the
consideration of factors in determination of selling prices such as fluctuation of raw
materials prices in the international market and substantial fall into selling prices due
to shortage in demands due to Covid 19 pandemic. |
|
|
• Assessing the appropriateness of Company s accounting policy for valuation of
stock-in- trade and compliance of the policy with the requirements of the prevailing
accounting standards. We considered various factors including the actual selling price
prevailing around and subsequent to the year-end and fixed price contracts with customers
whose sales orders are on hand. Compared the cost of the finished goods with the estimated
net realizable value and checked if the finished goods were recorded at net realizable
value where the cost was higher than the net realizable value. |
|
• For the purpose of determination of cost, the Company has considered the
prevailing market situation. Based on the above procedures performed, the management s
determination of the net realizable value of the inventory as at the year end and
comparison with cost for valuation of inventory is considered to be reasonable. |
Information other than the financial statements and Auditor s report thereon
The Company s Board of Directors is responsible for the other information. The other
information comprises the information included in the Company s annual report, but does
not include the standalone financial statements and our auditor s report thereon. Our
opinion on the standalone financial statements does not cover the other information and we
do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other information
is materially inconsistent with the standalone financial statements or our knowledge
obtained in the 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. We have nothing to reporting this
regard.
Responsibilities of Management and Those Charged with Governance for the Standalone
Financial Statements
The Company s Management and Board of Directors are responsible for the matters stated
in section 134(5) of the Act with respect to the preparation of these standalone financial
statements that give a true and fair view of the state of affairs, profit / loss, changes
in equity and cash flow of the Company in accordance with the Accounting Standards and
other accounting principles generally accepted in India, including the Accounting
Standards specified under section 133 of the Act. 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 standalone financial statements that give a true and
fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, Management and Board of Directors are
responsible for assessing the Company s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the Board of Directors either intends to liquidate the Company
or to cease operations, or has no realistic alternative but to do so. The Company s
Management and Board of Directors is also responsible for overseeing the Company s
financial reporting process.
Auditor s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone
financial statements as a whole are free from material misstatement, whether due to fraud
or error, and to issue an auditor s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with Standards on Auditing 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 standalone financial statements.
As part of an audit in accordance with Standards on Auditing, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the standalone
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.
• 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.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management s 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 Company s
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor s report to the related disclosures in
the standalone 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 s report.
However, future events or conditions may cause the Company to cease to continue as a
going concern.
? Evaluate the overall presentation, structure and content of the standalone financial
statements, including the disclosures, and whether the standalone financial statements
represent the underlying transactions and events in a manner that achieves fair
presentation.
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.
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.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the standalone 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
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 of the
Companies Act, 2013, we give in the "Annexure A", a statement on the
matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
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 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 Statement of Changes in Equity and the Cash Flow Statement dealt with by this
Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2015, as amended.
(e) On the basis of the written representations received from the directors as on 31st
March, 2020 taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2020 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 with reference to these Standalone Financial Statements and the
operating effectiveness of such controls, refer to our separate Report in
" Annexure B" to this report.
(g) With respect to the other matters to be included in the Auditor s 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 impact of pending litigations under note no. 30of
standalone financial statements.
(ii) The Company has made provision as at 31st March, 2020 as required under
the applicable Law or Accounting Standards for foreseeable losses on long term contracts
including derivatives contracts.
(iii) There has been no delay in transferring amounts, required to be transferred to
the Investor Education and Protection Fund by the Company.
3. With respect to the matter to be included in the Auditors Report under section
197(16):
In our opinion and according to the information and explanations given to us, the
remuneration paid by the Company to its directors during the current year is in accordance
with the provisions of Section 197 of the Act. The remuneration paid to any director is
not in excess of the limit laid down under Section 197 of the Act. The Ministry of
Corporate Affairs has not prescribed other details under Section 197(16) which are
required to be commented upon by us.
| For AGRAWAL SHUKLA & CO. |
| Chartered Accountants |
| Firm Registration number: 0326151E |
| Pankaj Kumar Agrawal |
| Partner |
| Membership No.062658 |
| Place : Mumbai |
| UDIN: 20062658AAAAAE9925 |
| Date: 27thJuly, 2020 |
ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT ON THE STANDALONE FINANCIAL
STATEMENTS OF Baba Agro Food Limited
(Referred to in Paragraph 1, under the "Report on Other Legal and Regulatory
Requirements" section of our report of even date) (i) In respect of its fixed assets:
a) The Company has maintained proper records showing full particulars including
quantitative details and situation of fixed assets on the basis of available information.
b) As explained to us, all the fixed assets have been physically verified by the
management in a phased periodical manner, which in our opinion is reasonable having regard
to the size of the Company and nature of its assets. No material discrepancies were
noticed on such physical verification.
c) According to the information and explanation given to us and on the basis of our
examination of the records of the Company, the title deeds of immovable properties are
held in the name of the Company.
(ii) In respect of inventories:
In our opinion, during the year the inventories have been physically verified by the
management at reasonable intervals and according to explanation given to us, no material
discrepancies were noticed during the year on such verification.
(iii) According to the information and explanations given to us, the Company has not
granted any loans, secured or unsecured, to companies, firms or other parties covered in
the register maintained under Section 189 of the Companies Act, 2013 and hence clause iii
(a),iii (b) and iii(c) of the Order not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us in
respect of loans, investments, guarantees and security, the provisions of sections 185 and
186 of the Act have been complied with.
(v) According to the information and explanations given to us, the Company has not
accepted any deposit from the public. Therefore, the provisions of Clause (v) of paragraph
3 of the Order are not applicable to the Company.
(vi) The maintenance of cost records has not been specified by the Central Government
under section 148(1) of the Companies Act, 2013 for the business activities carried out by
the Company. Thus, reporting under clause 3(vi) of the order is not applicable to the
Company.
(vii) In respect of statutory dues:
a) According to the records of the Company, undisputed statutory dues including
Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Goods and
Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess, and other material
statutory dues have been generally regularly deposited with the appropriate authorities.
According to the information and explanations given to us, no undisputed amounts payable
in respect of the aforesaid dues were outstanding as at 31st March, 2020 for a period of
more than six months from the date of becoming payable.
b) There are no dues of Income Tax, Sales Tax, Wealth Tax, and Service Tax, duty of
Customs, Duty of Excise, Value Added Tax, and Cess which have not been deposited as on 31st
March, 2020 on account of any dispute.
(viii) Based on our audit procedures and the information and explanations provided by
the management, we are of the opinion that the company has not defaulted in repayment of
loans or borrowing to financial institutions, banks and Government. The Company does not
have any debenture holders.
(ix) In our opinion and according to the information and explanations given to us, the
term loans raised during the year have been applied for the purpose for which those loans
were raised. The company has not raised money by way of initial public offer or further
public offer, including debt instruments.
(x) In our opinion and according to the information and explanations given to us, no
fraud by the Company or on the Company by the officers and employees of the Company has
been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us, the
managerial remuneration has been paid or provided in accordance with the requisite
approvals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of
paragraph 3 of the Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us the
Company s transactions with its related parties are in compliance with Sections 177 and
188 of the Act, where applicable, and details of related party transactions have been
disclosed in the standalone financial statements etc. as required by the applicable
accounting standards.
(xiv) The Company has not made any preferential allotment or private placement of
shares or fully or partly convertible debentures during the year. Therefore, provisions of
clause (xiv) of paragraph 3 of the Order are not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us,
during the year, the Company has not entered into any non-cash transactions with its
directors or persons connected with him and hence reporting under clause (xv) of paragraph
3 of the Order is not applicable to the Company.
(xvi) In our opinion and according to the information and explanations given to us, the
Company is not required to register under section 45-1A of the Reserve Bank of India Act,
1934.
| For AGRAWAL SHUKLA & CO. |
| Chartered Accountants |
| Firm Registration number: 0326151E |
| Pankaj Kumar Agrawal |
| Partner |
| Membership No.062658 |
| Place : Mumbai |
| UDIN:20062658AAAAAE9925 |
| Date: 27thJuly, 2020 |
ANNEXURE "B" TO THE INDEPENDENT AUDITOR S REPORT ON THE STANDALONE FINANCIAL
STATEMENTS OF Baba Agro Food Limited
(Referred to in paragraph 2 (f) under Report on Other Legal and Regulatory Requirements
of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting 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 Baba
Agro Food Limited("the Company") as of 31st March, 2020 in conjunction with
our audit of the standalone 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 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 (the
"Guidance Note") issued by the Institute of Chartered Accountants of India.
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
Company s 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 Companies Act, 2013.
Auditor s Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting with reference to these Standalone Financial Statements
based on our audit. We conducted our audit in accordance with the Guidance Note and the
Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, 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 with reference to these Standalone Financial Statements was
established and maintained and if such controls operated effectively in all material
respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting with reference to these
Standalone Financial Statements and their operating effectiveness. Our audit of internal
financial controls over financial reporting included obtaining an understanding of
internal financial controls over financial reporting with reference to these Standalone
Financial Statements, 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 auditor s judgement, including the
assessment of the risks of material misstatement of the standalone financial statements,
whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Company s internal financial controls system
over financial reporting with reference to these Standalone Financial Statements.
Meaning of Internal Financial Controls over Financial Reporting
A Companys internal financial control over financial reporting with reference to these
Standalone Financial Statements is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of standalone
financial statements for external purposes in accordance with generally accepted
accounting principles.
A Companys internal financial control over financial reporting with reference to these
Standalone Financial Statements 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 standalone
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 standalone
financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting with
reference to these Standalone Financial Statements.
Because of the inherent limitations of internal financial controls over financial
reporting with reference to these Standalone Financial Statements, 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 with reference
to these Standalone Financial Statements to future periods are subject to the risk that
the internal financial control over financial reporting with reference to these Standalone
Financial Statements may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given
to us, the Company has, in all material respects, an adequate internal financial controls
system over financial reporting with reference to these Standalone Financial Statements
and such internal financial controls over financial reporting were operating effectively
as at 31st March, 2020, 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.
| For AGRAWAL SHUKLA & CO. |
| Chartered Accountants |
| Firm Registration number: 0326151E |
| Pankaj Kumar Agrawal |
| Partner |
| Membership No.062658 |
| Place : Mumbai |
| UDIN: 20062658AAAAAE9925 |
| Date: 27th July, 2020 |
+91-9892691696
