We have audited the accompanying Standalone Financial Statements of Avanti Feeds Limited
("the Company") which comprise the Balance Sheet as at 31 March, 2025, the Statement of Profit and
Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of
Cash Flows for the year ended on that date and notes to the financial statements, including a summary of
material accounting policies and other explanatory information (herein after referred to as the "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 Indian Accounting Standards
(Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards)
Rules, 2015, as amended and other accounting principles generally accepted in India, of the state of affairs
of the Company as at 31 March, 2025, its profit including other comprehensive income, changes in equity
and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the Standalone Financial Statements 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 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 Companies Act,
2013 and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance
with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence obtained by us is
sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the Standalone Financial Statements of the current period. These matters were addressed in the
context of our audit of the Standalone 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.
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|s. No
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Key Audit Matters
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Auditor's Response
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1.
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Accuracy of recognition,
measurement, presentation and
disclosures of revenues and other
related balances in view of Ind AS
115 “Revenue from Contracts with
Customers" (revenue accounting
standard)
The application of the revenue
accounting standard involves
certain key judgements relating
to identification of the contract
with a customer, identification of
distinct performance obligations,
determination of transaction price
of the identified performance
obligations, the appropriateness of
the basis used to measure revenue
recognized when a performance
obligation is satisfied. Additionally,
revenue accounting standard
contains disclosures which involves
collation of information in respect
of disaggregated revenue and
periods over which the remaining
performance obligations will be
satisfied subsequent to the balance
sheet date.
Refer Note 2.4c and 21 to the
Financial Statements
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Principal Audit Procedures
We assessed the Company's process to identify the impact
of revenue accounting standard. Our audit approach con¬
sisted testing of the design and operating effectiveness of
the internal controls and substantive testing as follows:
• We assessed the appropriateness of the revenue
recognition accounting policies by comparing with
applicable accounting standards.
• Selected a sample of continuing and new contracts, and
tested the operating effectiveness of the internal control,
relating to identification of the distinct performance
obligations and determination of transaction price. We
carried out a combination of procedures involving enquiry
and observation, performance and inspection of evidence
in respect of operation of these controls.
• Tested the relevant information technology systems' access
and change management controls relating to contracts
and related information used in recording and disclosing
revenue in accordance with the revenue accounting
standard.
• Selected a sample of continuing and new contracts and
performed the following procedures:
- Read, analysed and identified the distinct performance
obligations in these contracts.
- Compared these performance obligations with that
identified and recorded by the Company.
- Considered the terms of the contracts to determine the
transaction price including any variable consideration
to verify the transaction price used to compute revenue
and to test the basis of estimation of the variable
consideration.
- Samples in respect of revenue recorded upon transfer of
control of promised products or services to customers
in an amount that reflects the consideration which
the Company expects to receive in exchange for those
products or services, were tested using a combination of
sales orders, gate-in and gate-out passes, shipping bills
including packing lists, subsequent customs invoicing,
bills of lading, customer acceptances and historical trend
of collections and disputes.
Performed analytical procedures for reasonableness of
revenues disclosed by type and service offerings.
We reviewed the collation of information and the logic of
the report generated from the IT system used to prepare
the disclosure relating to the periods over which the
remaining performance obligations will be satisfied
subsequent to the balance sheet date.
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|s. No
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Key Audit Matters
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Auditor's Response
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2.
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The Company enters into various
financial instruments such as
investments in quoted and unquoted
equity instruments, quoted mutual
funds and quoted non-convertible
debentures. As at 31 March, 2025,
financial instruments carried at
amortised cost/fair value through
profit and loss totalled '77,699.86
Lakhs (current investments of
'77,177.35 Lakhs and non-current
investments of '1522.51 Lakhs)
as disclosed in Note 6 to the
Standalone Financial Statements.
These financial instruments are
recorded at fair value as required by
the relevant accounting standard.
We have focused on this area due
to the complexities associated with
the valuation and accounting for
these financial instruments.
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Our procedures included but were not limited to:
• Obtaining an understanding of the internal risk management
procedures and the systems and controls associated with
the origination and maintenance of complete and accurate
information relating to financial instruments;
• Utilizing our treasury experts, we also tested on a sample
basis the existence and valuation of derivative contracts
as at 31 March, 2025. Our audit procedures focused on the
integrity of the valuation models and the incorporation of
the contract terms and the key assumptions, including
future price assumptions and discount rates; and
• Obtaining an understanding of key financial instrument
contract terms to assess the appropriateness of accounting
reflected in the financial report.
• We have also assessed the appropriateness of the
disclosures included in Note 37 to the Standalone Financial
Statements
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3.
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Inventory valuation and
existence:
At the balance sheet date, the value
of inventory amounted to '48,683.05
Lakhs representing 17.48% of total
assets. Inventories were considered
as key audit matter due to the size of
the balance and because inventory
valuation involves management
judgment.
As described in Note 2.4i to the
Standalone Financial Statements,
inventories are carried at the lower
of cost and net realizable value on a
weighted average basis
The Company has segment specific
procedures for identifying risk
for obsolescence and measuring
inventories at the lower of cost and
net realizable value
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To address the risk for material error on inventories, our audit
procedures included amongst other:
• Assessing the compliance of Company's accounting policies
over inventory with applicable accounting standards.
• Observed the stock take process at Factory locations
during the year and at the end of the year and undertook our
test counts where ever necessary.
• Compared the Quantities we counted with Quantities
recorded.
• Analysing the Inventory Ageing reports and Net realizable
value of inventories
• Tested that inventory on hand at the end of the period
was recorded at the lower of cost and net realizable value
by testing a sample of inventory items to the most recent
retail price.
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|S. No
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Key Audit Matters
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Auditor's Response
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4
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Purchase of Raw Material:
Purchase of Raw material is being
considered as a key audit matter as
the Company procures its principle
raw materials from the suppliers
and the price of the same is highly
volatile to the market conditions.
Based upon the production
requirements and after
considering the tentative prices,
the management decides the raw
materials which have to be procured.
The total cost of raw material
purchased by the entity for
the financial year 2024-25 is
'3,31,559.06 Lakhs.
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Following are some of the substantive tests that were part
of our auditing procedures in addition to testing the internal
controls' design and effectiveness:
Internal controls relating to the purchase of raw materials and
payments made to the suppliers of the raw materials on the
basis of source documentation have been assessed in terms
of their design and tested in terms of their implementation.
We have performed test of controls over procurement
procedures to assess the operating effectiveness of the
controls placed in recognition of the cost of material
consumption.
We have conducted test of details through correlating the raw
materials procured and the raw material consumed as per the
production and stock reports.
Understood the credit terms for payments to suppliers and
assessed whether the same have been complied with.
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Information Other than the Standalone Financial Statements and Auditor's Report
Thereon
The Company's 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, Board's Report
including Annexures to Board's Report, Business Responsibility Report and Shareholder's Information, 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 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. We have nothing to report in this regard.
Management's Responsibility and Those charged with Governance for the Standalone
Financial Statements
The Company's Board of Directors is 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
financial position, financial performance including other comprehensive income, changes in equity and
cash flows of the Company in accordance with the accounting principles generally accepted in India,
including the Indian Accounting Standards (Ind AS) specified 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 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, the Board of Directors is 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 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 Company's financial reporting process.
Auditor's Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether these 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 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 Standalone Financial Statements.
As part of an audit in accordance with SAs, 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 financial controls relevant to the audit in order to design audit
procedures that are appropriate in the circumstances. Under section 143 (3) (i) of the Act, we are
also responsible for expressing our opinion on whether the Company 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.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or
in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the
Standalone 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 Standalone Financial Statements.
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 auditor's 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, 2020 ("the Order"), issued by the Central
Government of India in terms of sub-section (11) of section 143 of the Act, 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, except for the matters stated in paragraph
2h(vi) below on reporting under Rule 11 (g) of the Companies (Audit and Auditors) Rules, 2014.
c) The balance sheet, the statement of profit and loss including other comprehensive income, the
statement of changes in equity and the statement of cash flows 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 Indian Accounting
Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts)
Rules, 2014.
e) On the basis of the written representations received from the directors as on 31 March, 2025,
taken on record by the Board of Directors, none of the directors is disqualified as on 31 March,
2025, 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-B". Our report expresses an unmodified opinion on the adequacy and operating
effectiveness of the Company's internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor's 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 Auditor's Report in accordance with Rule
11 of the Companies (Audit and Auditors) Rules, 2014, as amended, 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
Standalone Financial Statements- Refer Note 30 to the Standalone Financial Statements.
ii) The Company did not have any long-term contracts including derivative contracts for which
there were any material foreseeable losses.
iii) There has been no delay in transferring amounts, required to be transferred, to the Investor
Education and Protection Fund by the Company.
iv)
a) The management has represented that, to the best of its knowledge and belief, no
funds have been advanced or loaned or invested (either from borrowed funds or share
premium or any other sources or kind of funds) by the Company to or in any other
person or entity, including foreign entities ("Intermediaries"), with the understanding,
whether recorded in writing or otherwise, that the Intermediaries shall, whether,
directly or indirectly lend or invest in other person or entity identified in any manner
whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b) The management has represented that, to the best of its knowledge and belief, no
funds have been received by the Company from any person or entity, including foreign
entities ("Funding Parties"), with the understanding, whether recorded in writing or
otherwise, that the Company shall, whether, directly or indirectly, lend or invest in
other person or entity identified in any manner whatsoever by or on behalf of the
Funding Parties ("Ultimate Beneficiaries") or provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries; and
c) Based on the audit procedures that were considered reasonable and appropriate in
the circumstances, nothing has come to our notice that has caused us to believe that
the representations under sub-clause (a) and (b) contain any material misstatement.
v)
a) The final dividend paid by the Company during the year in respect of the same declared
for the previous year is in accordance with section 123 of the Act to the extent it
applies to payment of dividend.
b) The Board of Directors of the Company have proposed final dividend for the year which
is subject to the approval of the members at the ensuing Annual General Meeting. The
dividend declared is in accordance with section 123 of the Act to the extent it applies
to declaration of dividend.
vi) The reporting under Rule 11 (g) of the Companies (Audit and Auditors) Rules, 2014 is
applicable from 1 April, 2023.
Based on our examination which included test checks, the Company has used accounting
software for maintaining its books of account for the financial year ended 31 March, 2025
which has a feature of recording audit trail (edit log) facility and the same has operated
throughout the year for all relevant transactions recorded in the software except in the
case of records of property, plant and equipment, payroll and inventory of finished goods
which are being maintained manually.
Further, the feature of recording audit trail (edit log) facility was not available at the database
level to log any direct data changes for the accounting software used for maintaining the
books of account of the Company.
During the course of our audit we did not come across any instance of the audit trail feature
being tampered with and the audit trail has been preserved by the Company as per the
statutory requirements for record retention.
ForTUKARAM& CO LLP
Chartered Accountants
ICAI Firm Registration No: 004436S / S200135
(PACHARI MURALI)
Partner
Membership No: 221625
UDIN: 25221625BMIZW29431
Place : Hyderabad
Date : 28-05-2025
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