The Members of NHC Foods Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of NHC Foods Limited("the Company") which comprise the Balance Sheet as at March 31 2017 theStatement of Profit and Loss and the Cash Flow Statement for the year then ended and asummary of 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 standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Companies Act 2013 read with Rule 7 of theCompanies(Accounts) Rules 2014. 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 control that were operating effectively for ensuring theaccuracy and completenessoftheaccountingrecords relevanttothepreparation and presentationof the financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovision of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including 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 accounting policies used and the reasonableness of the accountingestimates made by the Company Directors as well as evaluating the overall presentation ofthe financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:
(a) in the case of the Balance Sheet of the state of affairs of the Company as atMarch 31 2017;
(b) in the case of the Statement of Profit and Loss of the profit for the year endedon that date; and
(c) in the case of the Cash Flow Statement of the cash flows for the year ended onthat date.
Report on Other Legal and Regulatory Requirements.
1. As required by the Companies ( Auditor's Report ) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure "A" statement on the mattersspecified in the paragraph 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 bestof our knowledge and belief were necessary for the purpose of our audit;
b. In our opinion proper books of account as required by law have been kept by theCompany so far as 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 standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;
e. On the basis of written representations received from the Directors as on March 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of Section 164 (2) ofthe Act.
f. With respect to theadequacyoftheinternalfinancialcontroloverfinancialreporting ofthe Company and the operating effectiveness of such controls refer to our separate reportin "Annexure B"; and
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 in our opinionand to the best of our information and according to the explanation given to us:
i. The company has disclosed the impact of pending litigations on its financialposition in its financial statements -Refer Note 27 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There is no amount required to be transferred to the Investor Education andProtection Fund by the Company.
iv. The Company has provided requisite disclosures in its standalone financialstatements as to holding as well as dealing in Specified Bank Notes during the period fromNovember 8 2016 to December 30 2016 and these are in accordance with the books ofaccounts maintained by the Company.
Annexure A to the Independent Auditor's Report
(Referred to in Paragraph 1 under the heading of Report on Other Legal andRegulatory Requirements 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. According to the information and explanations given to us the Fixed Assets havebeen physically verified by the management during the year no material discrepancies werenoticed on such verification with book records. In our opinion this periodicity ofphysical verification is reasonable having regard to the size of the Company and nature ofits assets.
c. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
ii. The management has conducted physical verification of inventory at regularintervals during the year. In our opinion and according to the information andexplanations given to us the Company is maintaining proper records of inventory. Nomaterial discrepancies were noticed on physical verification.
iii. The Company has not granted any loan secured or unsecured to companies firmsLimited Liability Partnership or other parties covered in the register maintained undersection 189 of the Companies Act 2013. Therefore paragraph 3 (iii) of the Order is notapplicable.
iv. In our opinion and accordingtotheinformationandexplanationsgiventousand based onour examination of the records the Company has not given any loan guarantees securitynor made any investment hence the provisions of section 185 and 186 of the Act are notattracted in this respect. Therefore paragraph 3(iv) of the Order is not applicable.
v. The Company has not accepted any deposits from the public.
vi. In our opinion and according to the information and explanation given to us theCentral Government has not prescribed maintenance of cost records under sub-section (1) ofsection 148 of the Companies Act. Therefore the paragraph 3 (vi) of the Order is notapplicable.
vii. a. According to the information and explanations given to us and on the basis ofour examination of the records of the Company is generally regular in depositing withappropriate authority the amounts deducted/ accrued in the books of accounting respect ofundisputed statutory dues including Profession Tax Provident Fund Employees StateInsurance Income-tax Service-tax cess custom duty excise duty and other statutorydues as applicable. There are no undisputed amounts payable in respect of income taxduty of customs value added tax cess and other statutory dues were outstanding as atMarch 31 2017 for a period of more than six months from the date they became payable.
b. According to the information and explanations given to us there are no dues ofprofessional tax Provident fund Employee State Insurance Sales tax service tax valueadded tax duty of customs and cess which have not been deposited with appropriateauthorities on account of any dispute except the following:
|Sr. No. ||Name of the Statute ||Nature of the dues ||Amount ( In 7) ||Period to which the amount relates ||Forum Where dispute |
|1. ||Income Tax Act 1961 ||Tax Liability on Regular Assessment ||547469 ||FY: 1995-1996 ||ITAT has referred back the case to Assessing Officer for further hearings |
|2. ||Central Excise Act 1962 ||Excise Duty ||226871 ||FY: 1992-1995 ||Customs Excise and Service Tax Appellate Tribunal |
viii. According to the information and explanations given to us the company has notdefaulted in repayment of dues to a financial institution bank or debenture holders.
ix. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instrument) and term loans during the year. Thereforeparagraph 3 (ix) of the Order is not applicable.
x. According to the information and explanations given to us no material fraud by thecompany or on the Company by its officer or employees has been noticed or reported duringthe course of our audit.
xi. According to the information and explanation give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V of the Act.
xii. In our opinion and according to the information given to us the Company is not aNidhi Company. Therefore paragraph 3(xii) of the Order is not applicable.
xiii. According to the information and explanation give to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 & 188 of the Act where applicable and details have beendisclosed in the Financial statements as required by the applicable accounting standard.
xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year. Therefore paragraph 3(xiv) ofthe Order is not applicable.
xv. The company has not entered into any non-cash transactions with the directors orpersons connected with him. Therefore paragraph 3(xv) of the Order is not applicable.
xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
Annexure B to the Independent Auditor's Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of NHC FoodsLimited ("the Company") as of March 31 2017 in conjunction with our audit ofthe 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 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 ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated 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 judgments 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 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 NGS & Co. LLP
Firm Registration No. 119850W
Membership No. 042472
Date: 30th May 2017