To The Members of DFM Foods Limited
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of DFM FoodsLimited ("the Company") which comprise the Balance Sheet as at March 31 2022and the Statement of Profit and Loss (including Other Comprehensive Income) the Statementof Cash Flows and the Statement of Changes in Equity for the year then ended and asummary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2022 and its loss totalcomprehensive loss its cash flows and the changes in equity for the year ended on thatdate.
BASIS FOR OPINION
We conducted our audit of the financial statements in accordance withthe Standards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibility for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of the financial statements under the provisions of the Act and theRules made thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ICAI's Code of Ethics. We believe that theaudit evidence obtained by us is sufficient and appropriate to provide a basis for ouraudit opinion on the financial statements.
KEY AUDIT MATTERS
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.We have determined that there are no key audit matters to communicate in our report.
Information Other than the Financial Statements and Auditor's ReportThereon
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Director's Report including Annexure to Director's Report andReport on Corporate Governance but does not include financial statements and ourauditor's report thereon.
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated.
If based on the work we have performed we conclude that thereis 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 FOR THE FINANCIAL STATEMENTS
The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive loss cash flows and changes in equity of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting 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 forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.
AUDITOR'S RESPONSIBILITY FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal financial control relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by the management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
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 explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
b) In our opinion proper books of account as required by law have beenkept 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 OtherComprehensive loss the Statement of Cash Flows and Statement of Changes in Equity dealtwith by this Report are in agreement with the relevant books of account.
d) In our opinion the aforesaid financial statements comply with theInd AS specified under Section 133 of the Act.
e) On the basis of the written representations received from thedirectors as on March 31 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2022 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 overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure A". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.
g) In our opinion and to the best of our information and according tothe explanations given to us the remuneration paid by the Company to its directors duringthe 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'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us:
i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements - Refer Note 28 to the financialstatements;
ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses - Refer Note 34to the financial statements;
iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company - Refer Note 53to the financial statements;
(a) The Management has represented that to the best of it's knowledgeand belief other than as disclosed in the note 51(a) to the financial statements no fundshave been advanced or loaned or invested (either from borrowed funds or share premium orany other sources or kind of funds) by the Company to or in any other person(s) orentity(ies) including foreign entities ("Intermediaries") with theunderstanding whether recorded in writing or otherwise that the Intermediary shalldirectly or indirectly lend or invest in other persons or entities identified in anymanner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") orprovide any guarantee security or the like on behalf of the Ultimate Beneficiaries.
(b) The Management has represented that to the best of it's knowledgeand belief other than as disclosed in the note 51(b) to the financial statements nofunds have been received by the Company from any person(s) or entity(ies) includingforeign entities ("Funding Parties") with the understanding whether recordedin writing or otherwise that the Company shall directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theFunding Party ("Ultimate Beneficiaries") or provide any guarantee security orthe like on behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures performed that have been consideredreasonable and appropriate in the circumstances nothing has come to our notice that hascaused us to believe that the representations under sub-clause
(i) and (ii) of Rule 11(e) as provided under (a) and (b) abovecontain any material misstatement.
iv. The final dividend proposed in the previous year declared and paidby the Company during the year is in accordance with section 123 of the Act asapplicable.
2. As required by the Companies (Auditor's Report) Order 2020("the Order") issued by the Central Government in terms of Section 143(11) ofthe Act we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order.
Annexure "A" to the Independent Auditor's Report
(Referred to in paragraph f under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)
Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")
We have audited the internal financial controls over financialreporting of DFM Foods Limited ("the Company") as of March 31 2022 inconjunction with our audit of the Ind AS financial statements of the Company for the yearended on that date.
MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. 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.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting of the Company based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") issued by the Instituteof Chartered Accountants of India and the Standards on Auditing prescribed under Section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 FINANCIALREPORTING
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to theexplanations given to us 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 2022 based on thecriteria for internal financial control over financial reporting established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal
Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
Annexure "B" to the Independent Auditor's Report
(Referred to in paragraph 2 under 'Report on Legal and RegulatoryRequirements' section of our report of even date)
In terms of the information and explanations sought by us and given bythe Company and the books of account and records examined by us in the normal course ofaudit and to the best of our knowledge and belief we state that:
(i) (a) I n respect of Property Plant and Equipment and
A. The Company has maintained proper records showing full particularsincluding quantitative details and situation of Property Plant and Equipment and relevantdetails of Right of Use assets.
B. The Company has maintained proper records showing full particularsof intangible assets.
(b) The Property Plant and Equipment were physically verified duringthe year by the Management which in our opinion provides for physical verification atreasonable intervals. No material discrepancies were noticed on such verification.
(c) With respect to immovable properties disclosed in the financialstatements included in Property Plant and Equipment according to the information andexplanations given to us and based on the examination of the registered sale deed/conveyance deed provided to us we report that the title deeds of such immovableproperties are held in the name of the Company as at the balance sheet date. In respect ofimmovable properties that have been taken on lease and disclosed in the financialstatements as Right of Use assets as at the balance sheet date the lease agreements areduly executed in favour of the Company.
(d) The Company has not revalued any of its Property Plant andEquipment (including Right of Use assets) and intangible assets during the year.
(e) No proceedings have been initiated during the year or are pendingagainst the Company as at March 31 2022 for holding any benami property under the BenamiTransactions (Prohibition) Act 1988 (as amended in 2016) and rules made thereunder.
(ii) (a) The inventories were physically verified during the year bythe Management at reasonable intervals. In our opinion and based on information andexplanations given to us the coverage and procedure of such verification by theManagement is appropriate having regard to the size of the Company and the nature of itsoperations. No discrepancies of 10% or more in the aggregate for each class of inventorieswere noticed on such physical verification of inventories when compared with the books ofaccount.
(b) According to the information and explanations given to us theCompany has been sanctioned working capital limits in excess of ' 5 crores in aggregateat points of time during the year from banks on the basis of security of current assets.In our opinion and according to the information and explanations given to us the revisedreturns or statements submitted for each quarter comprising stock statements filed by theCompany till the date of this report are in agreement with the unaudited books of accountof the Company of the respective quarters ended June 30 2021 September 30 2021December 31 2021 and March 31 2022 and no material discrepancies have been observed.
(iii) The Company has not provided guarantees or security and grantedloans or advances in the nature of loans secured or unsecured to companies firmsLimited Liability Partnerships or any other parties during the year. Hence reporting underclause (iii)(a)(c)(d)(e) and (f) of the order is not applicable. The Company has madeinvestments during the year and In our opinion prima facie not prejudicial to theCompany's interest.
(iv) The Company has not granted any loan or provided any guarantee orsecurity as specified under section 185 and 186 of the Companies Act 2013. In respect ofinvestments made by the Company during the year the Company has complied with theprovisions of 186 of the Companies Act 2013.
(v) The Company has not accepted or is not holding any deposit oramounts which are deemed to be deposits during the year. Hence reporting under clause (v)of the Order is not applicable.
(vi) The maintenance of cost records has not been specified for theactivities of the Company by the Central Government under section 148(1) of the CompaniesAct 2013. Hence reporting under clause (vi) of the Order is not applicable.
(vii) In respect of statutory dues:
(a) Undisputed statutory dues including Goods and Services taxProvident Fund Employees' State
Insurance Income-tax duty of Customs cess and other materialstatutory dues applicable to the Company have generally been regularly deposited by itwith the appropriate authorities in all cases during the year.
There were no undisputed amounts payable in respect of Goods andServices tax Provident Fund Employees' State Insurance Income-tax duty of Customscess and other material statutory dues in arrears as at March 31 2022 for a period ofmore than six months from the date they became payable.
(b) Details of statutory dues referred to in sub-clause (a) above whichhave not been deposited as on March 31 2022 on account of disputes are given below:
|Name of the statute ||Nature of dues ||Amount Involved (Rs in Lakhs) ||Period to which the amount relates (financial year) ||Forum where dispute is pending |
|Income- tax Act 1961 ||Income Tax ||33.46 ||2017-18 ||Commissioner Income Tax (Appeal) |
(viii) There were no transactions relating to previously unrecordedincome that were surrendered or disclosed as income in the tax assessments under theIncome Tax Act 1961 (43 of 1961) during the year.
(ix) (a) The Company has not defaulted in the repayment of loans orother borrowings or in the payment of interest thereon to any lender during the year.
(b) The Company has not been declared willful defaulter by any bank orfinancial institution or government or any government authority.
(c) The Company has not taken any term loan during the year and thereare no unutilised term loans at the beginning of the year and hence reporting underclause (ix)(c) of the Order is not applicable.
(d) On an overall examination of the financial statements of theCompany funds raised on short-term basis have prima facie not been used during the yearfor long-term purposes by the Company.
(e) The Company did not have any subsidiary or associate or jointventure during the year and hence reporting under clause (ix)(e) of the Order is notapplicable.
(f) The Company has not raised any loans during the year and hencereporting on clause (ix)(f) of the Order is not applicable.
(x) (a) The Company has not raised moneys by way of initial publicoffer or further public offer (including debt instruments) during the year and hencereporting under clause (x)(a) of the Order is not applicable.
(b) During the year the Company has not made any preferentialallotment or private placement of shares or convertible debentures (fully or partly oroptionally) and hence reporting under clause (x) (b) of the Order is not applicable to theCompany.
(xi) (a) To the best of our knowledge no fraud by the Company and nomaterial fraud on the Company has been noticed or reported during the year.
(b) To the best of our knowledge no report under sub-section (12) ofsection 143 of the Companies Act has been filed in Form ADT-4 as prescribed under rule 13of Companies (Audit and Auditors) Rules 2014 with the Central Government during the yearand upto the date of this report.
(c) As represented to us by the Management there were no whistleblower complaints received by the Company during the year and upto the date of thisreport.
(xii) The Company is not a Nidhi Company and hence reporting underclause (xii) of the Order is not applicable.
(xiii) In our opinion the Company is in compliance with Section 177and 188 of the Companies Act where applicable for all transactions with the relatedparties and the details of related party transactions have been disclosed in the financialstatements etc. as required by the applicable accounting standards.
(xiv) (a) In our opinion the Company has an adequate internal auditsystem commensurate with the size and the nature of its business.
(b) We have considered the internal audit reports issued to the Companyduring the year for the period under audit.
(xv) In our opinion during the year the Company has not entered intoany non-cash transactions with any of its directors or directors of its holding companysubsidiary company associate company as applicable or persons connected with suchdirectors and hence provisions of section 192 of the Companies Act 2013 are notapplicable to the Company.
(xvi) (a) The Company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934. Hence reporting under clause (xvi) (a)(b)and (c) of the Order is not applicable.
(b) The Group does not have any CIC as part of the group andaccordingly reporting under clause (xvi)(d) of the Order is not applicable.
(xvii) The Company has incurred cash losses amounting to ' 1406 lacsin the financial year covered by our audit but had not incurred cash losses in theimmediately preceding financial year.
(xviii) There has been no resignation of the statutory auditors of theCompany during the year.
(xix) On the basis of the financial ratios ageing and expected datesof realization of financial assets and payment of financial liabilities other informationaccompanying the financial statements and our knowledge of the Board of Directors andManagement plans and based on our examination of the evidence supporting the assumptionsnothing has come to our attention which causes us to believe that any materialuncertainty exists as on the date of the audit report indicating that Company is notcapable of meeting its liabilities existing at the date of balance sheet as and when theyfall due within a period of one year from the balance sheet date. We however state thatthis is not an assurance as to the future viability of the Company. We further state thatour reporting is based on the facts up to the date of the audit report and we neither giveany guarantee nor any assurance that all liabilities falling due within a period of oneyear from the balance sheet date will get discharged by the Company as and when they falldue.
(xx) (a) Corporate Social Responsibility (CSR) projects taken up by theCompany are ongoing at the end of the financial year. Accordingly reporting under Clause(xx)(a) of the Order is not applicable.
(b) In respect of ongoing projects the Company has transferred unspentCorporate Social Responsibility (CSR) amount to a Special account before the date of thisreport and within a period of 30 days from the end of the financial year in compliancewith the provision of section 135(6) of the Act.
| ||For Deloitte Haskins & Sells |
| ||Chartered Accountants |
| ||(Firm's Registration No. 015125N) |
| ||Rajesh Kumar Agarwal |
| ||(Partner) |
|Place: Gurugram ||(Membership No. 105546) |
|Date: 25th May 2022 ||(UDIN: 22105546AJORRK5527) |