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DFM Foods Ltd.

BSE: 519588 Sector: Agri and agri inputs
NSE: DFMFOODS ISIN Code: INE456C01012
BSE LIVE 15:40 | 15 Dec 1897.45 -2.60
(-0.14%)
OPEN

1945.00

HIGH

1954.00

LOW

1875.50

NSE 15:31 | 15 Dec 1905.45 -18.40
(-0.96%)
OPEN

1924.70

HIGH

1960.00

LOW

1900.00

OPEN 1945.00
PREVIOUS CLOSE 1900.05
VOLUME 1058
52-Week high 2141.00
52-Week low 1122.00
P/E 102.01
Mkt Cap.(Rs cr) 1,899
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1945.00
CLOSE 1900.05
VOLUME 1058
52-Week high 2141.00
52-Week low 1122.00
P/E 102.01
Mkt Cap.(Rs cr) 1,899
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

DFM Foods Ltd. (DFMFOODS) - Auditors Report

Company auditors report

TO THE MEMBERS OF DFM FOODS LTD. Report on the Financial Statements

We have audited the accompanying financial statements of DFM FOODS LTD. ("theCompany") which comprise the Balance Sheet as at 31st March 2017 theStatement of Profit and Loss and the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information.

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 preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards prescribedunder Section 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

Auditor's Responsibility

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 thereunder. We conductedour audit of the financial statements in accordance with the Standards on Auditingspecified under Section 143(10) of the Act. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement. An audit involvesperforming procedures to obtain audit evidence about the amounts and the disclosures inthe financial statements. The procedures selected depend on the auditor's judgmentincluding the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders 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 issufficient and appropriate to provide a basis for our audit opinion on the financialstatements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2017 and its profit and its cash flows for the year ended on that date

Report on Other Legal and Regulatory Requirements

1. 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 bestof 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 theCompany so far as it appears from our examination of those books.

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

d) In our opinion the aforesaid financial statements comply with the AccountingStandards prescribed under Section 133 of the Act.

) On the basis of the written representations received from the Directors as on 31stMarch 2017 taken on record by the Board of Directors none of the Directors isdisqualified as on 31st March 2017 from being appointed as a Director in termsof Section 164 (2) of the Act.

f) 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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

g) 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 as amendedinour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements- Refer Note 29 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses- Refer Note 38 to the financialstatements;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company; and

iv. The Company has provided requisite disclosures in the financial statements asregards its holding and dealings in Specified Bank Notes as defined in the NotificationS.O. 3407(E) dated the 8th November 2016 of the Ministry of Finance duringthe period from 8th November 2016 to 30th December 2016. Based onaudit procedures performed and the representations provided to us by the management wereport that the disclosures are in accordance with the books of account maintained by theCompany and as produced to us by the Management

2. As required by the Companies (Auditor's Report) Order 2016 ("the CARO2016") issued by the Central Government in terms of Section 143(11) of the Act wegive in "Annexure B" a statement on the matters specified in paragraphs 3 and 4of the Order.

For Deloitte Haskins & Sells

Chartered Accountants

(Firm's Registration No. 015125N)

Vijay Agarwal

Partner

(Membership No. 094468)

Place: New Delhi

Date: 25th May 2017

Annexure A to the Independent Auditor's Report

(Referred to in paragraph 1(f) under ‘Report on Other Legal and RegulatoryRequirements' of our report of even date) Report on the Internal Financial Controls OverFinancial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act2013 ("the Act")

We have audited the internal financial controls over financial reporting of DFM FOODSLIMITED ("the Company") as of 31st March 2017 in conjunction withour audit 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 controls 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 Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

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 judgement 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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorisations ofmanagement and Directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2017 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.

For Deloitte Haskins & Sells

Chartered Accountants

(Firm‘s Registration No. 015125N)

Vijay Agarwal

Partner

(Membership No. 094468)

Place: New Delhi

Date: 25th May 2017

Annexure B to the Independent Auditor's Report

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

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

(b) The Company has a program of verification of fixed assets to cover all the items ina phased manner over a period of three years which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. Pursuant to the programcertain fixed assets were physically verified by the Management during the year. Accordingto the information and explanations given to us no material discrepancies were noticed onsuch verification.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered transfer deed provided to us wereport that the title deed comprising the immovable property of land are held in thename of the Company as at the balance sheet date. Further title deed/ lease agreements ofall the immovable properties of land and buildings (including leasehold other than theleasehold land acquired during the year) have been mortgaged as security for term loansbased on the confirmations directly received by us from banks. In respect of immovableproperties of land that have been taken on lease and disclosed as fixed asset in thefinancial statements the lease agreements are in the name of the Company where theCompany is the lessee in the agreement.

(ii) As explained to us the inventories were physically verified during the year bythe Management at reasonable intervals and no material discrepancies were noticed onphysical verification. (iii) The Company has not granted any loans secured or unsecuredto companies firms Limited Liability Partnerships or other parties covered in theregister maintained under Section 189 of the Companies Act 2013.

(iv) The Company has not granted any loans made investments or provide guaranteesunder Section 185 and Section 186 of the Companies Act 2013 and hence reporting underclause (iv) of the CARO 2016 is not applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year under Section 73 to 76 or any other relevantprovisions of the Companies Act 2013.

(vi) The maintenance of cost records has not been specified by the Central Governmentunder Section 148(1) of the Companies Act 2013.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

(a) The Company has been regular in depositing undisputed statutory dues includingProvident Fund Employees' State Insurance Income Tax Sales Tax Service Tax CustomsDuty Excise Duty Value Added Tax and other material statutory dues applicable to it tothe appropriate authorities. We are informed that Cess is not applicable to the Company.(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income-tax Sales Tax Service Tax Customs Duty Excise Duty ValueAdded Tax and other material statutory dues in arrears as at 31st March2017 for a period of more than six months from the date they became payable.

(c) There are no dues of Income-tax Sales Tax Service Tax Customs Duty and ExciseDuty which have not been deposited as on 31st March 2017 on account ofdisputes. Detail of dues of Value Added Tax which have not been deposited as on 31st March2017 on account of dispute is given below:

Name of Statute Nature of the Dues Forum where Dispute is Pending Period to which the amount relates Amount involved (Rs. in Lakhs)
West Bengal Value Added Tax Act 2003 Entry Tax High Court (F.Y.) 2015-16 2016-17 24

The following matter has been decided in favor of the Company although the departmenthas preferred appeals at higher levels:

Name of Statute Nature of the Dues Forum where Dispute is Pending Period to which the amount relates Amount involved (Rs. in Lakhs)
Central Excise Act 1944 Excise Duty Custom Excise and Service Tax Appellate Tribunal (F.Y.) 2007-08 to 2016-17 11719#

# The amount mentioned as per demand order including interest wherever indicated in theOrder also refer Note 29(i) to the financial statements.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to banks orGovernment. The Company has not taken any loans or borrowings from financial institutionsor has not issued any debentures.

(ix) The Company has not raised moneys by way of further public offer (including debtinstruments). Further in our opinion and according to the information and explanationsgiven to us the term loans have been applied by the Company during the year for thepurposes for which they were raised.

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

(xi) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the CompaniesAct 2013.

(xii) The Company is not a Nidhi Company and hence reporting under Clause (xii) of theCARO 2016 is not applicable.

(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underClause (xiv) of CARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected with him and hence provisions of Section 192 of theCompanies Act 2013 are not applicable.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For Deloitte Haskins & Sells

Chartered Accountants

(Firm's Registration No. 015125N)

Vijay Agarwal

Partner

(Membership No. 094468)

Place: New Delhi

Date: 25th May 2017