The Members of
CHORDIA FOOD PRODUCTS LIMITED
Report on the Financial Statements
I have audited the accompanying financial statements of M/s. CHORDIA FOOD PRODUCTSLIMITED ("the Company") which comprises the Balance Sheet asat March 31 2019 the Statement of Profit and Loss statement of Cashflow statement ofChange in Equity and notes to the financial statements including a summary of significantIn my opinion and to the best of my information and according to the explanations given tous the aforesaid financial the information required by the Act in the manner so requiredand give a true and fair view in conformity with the accounting principles generallyaccepted in India of the state of affairs of the Company as at March 31 2019 and profitfor the year ended on that date.
Basis for Opinion
I have conducted the audit in accordance with the Standards on Auditing (SAs) specifiedunder section 2013. My responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the Financial Statements section of my report.I am independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India together with the ethical requirements thatare relevant to my audit of the financial statements under the provisions of the CompaniesAct 2013 and the Rules thereunder and I have fulfilled my other in accordance with theserequirements and the Code of Ethics. I believe that the audit evidence I have obtained issufficient and appropriate to provide a basis for my opinion.
Key Audit Matters
Key Audit matters are those matters that in my professional judgment were of mostsignificance in my audit of the financial of the current period. These matters wereaddressed in the context of my audit of the financial statements as a whole and informing my opinion thereon and I do not provide a separate opinion on these matters.
I have determined the matters described below to be the key audit matters to becommunicated in our report.
|Key Audit Matter ||Auditor's Response |
|1 Merger and Demerger: During the current yearthe Honourable National Company Law Tribunal (NCLT') vide its Order dated August 30 2018 approved the Scheme of Arrangement for Amalgamation of Pravin Foods Private Limited (Transferor Company') into Chordia Food Products Limited (Transferee Company/Resulting Company') and Demerger of Demerged Undertaking of Chordia Food Park and Properties Limited (Demerged Company'). Upon completion of necessary procedures the amalgamation has been given effect from April 1 2016 being the appointed date of the amalgamation. Consequent upon the Scheme of Arrangement becoming effective the Board of Directors of Chordia Food Products Ltd the Transferee/Resulting Company in its meeting held on 15th October 2018 has allotted 1048152 Equity shares of Rs. 10/- each amounting to Rs 10481520 to the erstwhile shareholders of Pravin Foods Private Ltd (Transferor Company) and Chordia Food Park & Properties Ltd (Demerged Company). : [Refer to Note 10 ||I have performed the following procedures with regard to the accounting for the Amalgamation and Demerger: |
| ||Understanding the management's processes accounting policies and controls with regard to the accounting for the effect of the Amalgamation and Demerger. |
| ||I have tested the design implementation and operating effectiveness of controls relating to the accounting treatment of the Amalgamation and Demerger with effect from the effective date. |
| ||I have carried out an assessment of compliance with the applicable Accounting Standards provisions of the Companies Act and the Order of the NCLT in that regard. |
| ||I have considered the adequacy and appropriateness of the disclosures in the financial statements. |
|(iii) to the Financial Statements "Share Capital"]. || |
The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and auditors' report thereon.My opinion on the financial statements does not cover the other information and I do notexpress any form of assurance conclusion thereon. In connection with my audit of thefinancial statements my responsibility is to read the other information and in doing soconsider whether the other information is materially inconsistent with the financialstatements or my knowledge obtained in the audit or otherwise appears to be materiallymisstated. If based on the work I have performed I conclude that if there is a materialmisstatement of this other information I am required to report that fact. I have nothingto report in this regard.
Responsibility of Management 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 changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate implementation and maintenance ofaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibility for the Audit of the Financial Statements
My objectives are to obtain reasonable assurance about whether the financial statementsas a whole are free from material misstatement whether due to fraud or error and toissue an auditor's report that includes my opinion. Reasonable assurance is a high levelof assurance but is not a guarantee that an audit conducted in accordance with SAs willalways detect a material misstatement when it exists. Misstatements can arise from fraudor error and are considered material if individually or in the aggregate they couldreasonably be expected to influence the economic decisions of users taken on the basis ofthese financial
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")as amended issued by the Central Government in terms of sub Section (11) of Section 143of the Act we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act I report that:
a. I have sought and obtained all the information and explanations which to the best ofmy knowledge and belief are necessary for the purpose of my audit;
b. In my opinion proper books of account as required by law have been kept by theCompany so far as appears from my examination of those books;
c. The Balance Sheet and Statement of Profit and Loss including statement of changesin Equity and statement of Cashflow dealt with by this Report are in agreement with thebooks of account;
d. In my opinion the aforesaid financial Statements comply with the AccountingStandards 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 31stMarch 2019 taken on record by the Board of Directors none of the directors aredisqualified as on 31 st March 2019 from being appointed as a director in terms ofSection 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 B" g. with respect to the other matters tobe included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 in my opinion and to the best of my information and according tothe explanations given to us:
i. The Company has disclosed the impact of pending litigations if any on its financialposition in its financial statements
ii. The Company did not have any long term contracts including derivative contracts forwhich there are any material foreseeable losses.
iii. There are no amounts required to be transferred to the Investor Education andProtection Fund by the Company for the financial year 2018-19.
| ||M/s. Bharat H Shah & Associates |
| ||Chartered Accountants |
| ||CA Bharat Shah |
|Place : Pune ||Proprietor |
|Date : 28th May 2019 ||M No.110878 |
| ||FRN: 122100W |
"ANNEXURE A" TO THE INDEPENDENT AUDITOR'S REPORT
Referred to in Paragraph 1 under the heading Report on Other Legal and RegulatoryRequirement' of our report of even date to the financial statements of the company for theyear ended 31st March 2019.
I report that
1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The major portion of fixed assets have been physically verified by the managementin a phased manner designed to cover all the items over a period of three years which inmy opinion is reasonable having regard to the size of the Company and nature of itsbusiness. Pursuant to the programme a portion of the fixed assets has been physicallyverified by the management during the year and no material discrepancies between thebooks records and the physical fixed assets have been noticed.
(c) The title deeds of the immovable properties are held in the name of the Company.
2. (a) The management has conducted the physical verification of inventory atreasonable intervals.
(b) The discrepancies noticed on physical verification of inventory as compared tobooks records which has been properly dealt with in the books of account were notmaterial.
3. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the Register maintained undersection 189 of the Act. Accordingly the provisions of clause 3(iii) (a) to (c) of theorder are not applicable to the company and hence not commented upon.
4. In my opinion and according to the information and explanation given to us theCompany has complied with the provisions of Section 185 and 186 of the companies Act 2013in respect of loans investments guarantees and security.
5. The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Section 73 to 76 or any otherrelevant provisions of the Act and the Companies( Acceptance of Deposit) Rules 2014 withregard to the deposits accepted from public are not applicable.
6. As informed to me the maintenance of Cost Records has not been specified of Section148 of the Act in respect of the activities carried on by the Company.
7. (a) According to information and explanation given to me and on the basis of myexamination of the books of account and records the Company has been generally regular indepositing undisputed statutory dues including Provident Fund
Employees State Insurance Income-Tax Sales tax Service Tax Duty of Customs Duty ofExcise Value added Tax
Cess and any other statutory dues with the appropriate authorities. According to theinformation and explanations given to me no undisputed amounts payable in respect of theabove were in arrears as at March 31 2019 for a period of more than six months from thedate on when they become payable.
(b) According to the information and explanation given to me there are no dues ofincome tax sales tax service tax duty of customs duty of excise value added taxoutstanding on account of any dispute.
8. In my opinion and according to the information and explanations given to me theCompany has not defaulted in the repayment of dues to banks. The Company has not taken anyloan either from financial institutions or from the government and has not issued anydebentures.
9. Based upon the audit procedures performed and the information and explanations givenby the management the Company has not raised moneys by way of initial public offer orfurther public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented upon.
10. Based upon the audit procedures performed and the information and explanationsgiven by the management I report that no fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year.
11. Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Companies Act; 12. In my opinion the Company is not a Nidhicompany. Therefore the provisions of Clause 3 (xii) of the Order are not applicable tothe Company.
13. In my opinion all transactions with the related parties are in compliance withSection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required under Indian Accounting Standard (Ind AS) 24 RelatedParty Disclosures specified under Section 133 of the Act.
14. Based upon the audit procedures performed and the information and explanationsgiven by the management the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company and hence not commented upon.
15. Based upon the audit procedures performed and the information and explanationsgiven by the management the Company has not entered into any non-cash transactions withdirectors or persons connected with them. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.
16. In my opinion the Company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) ofthe Order are not applicable to the Company and hence not commented upon.
M/s. Bharat H Shah & Associates
CA Bharat Shah
Place : Pune
Date : 28th May 2019
ANNEXURE - B TO THE INDEPENDENT AUDITORS' REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
I have audited the internal financial controls over financial reporting of Chordia FoodProducts Limited ("the Company") as of 31st March 2019 in conjunction with myaudit 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 (ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
My responsibility is to express an opinion on the Company's internal financial controlsover financial reporting based on my audit.
I have conducted the audit in accordance with the Guidance Note on Audit of InternalFinancial Controls over Financial Reporting (the "Guidance Note") and theStandards on Auditing issued by ICAI and deemed to be prescribed under Section 143(10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols both issued by the Institute of Chartered Accountants of India. Those Standardsand the Guidance Note require that I 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.
My audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial financial reporting and their operating effectiveness. My audit ofinternal financial controls over financial reporting included obtaining an understandingof internal financial controls over financial reporting assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.
I believe that the audit evidence I have obtained is sufficientand appropriate toprovide a basis for my 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 that transactions are recorded as necessary to permitpreparation of financialstatements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorizations of management and Directors of the Company; and (3) Providereasonable assurance regarding prevention or timely detection of unauthorized acquisitionuse or disposition of the Company's assets that could have a material effect on thefinancial 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 my 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 31 st March 2019 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.
| ||M/s. Bharat H Shah & Associates |
| ||Chartered Accountants |
| ||CA Bharat Shah |
|Place : Pune ||Proprietor |
|Date : 28th May 2019 ||M No.110878 |
| ||FRN: 122100W |