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Flex Foods Ltd.

BSE: 523672 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE954B01018
BSE 00:00 | 30 Sep 59.90 -0.80
(-1.32%)
OPEN

60.90

HIGH

61.00

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59.10

NSE 05:30 | 01 Jan Flex Foods Ltd
OPEN 60.90
PREVIOUS CLOSE 60.70
VOLUME 11630
52-Week high 78.40
52-Week low 22.00
P/E 11.05
Mkt Cap.(Rs cr) 75
Buy Price 58.80
Buy Qty 100.00
Sell Price 59.90
Sell Qty 1007.00
OPEN 60.90
CLOSE 60.70
VOLUME 11630
52-Week high 78.40
52-Week low 22.00
P/E 11.05
Mkt Cap.(Rs cr) 75
Buy Price 58.80
Buy Qty 100.00
Sell Price 59.90
Sell Qty 1007.00

Flex Foods Ltd. (FLEXFOODS) - Auditors Report

Company auditors report

TO THE MEMBERS OF flex foods limited

Report on the Audit of the Financial Statements Opinion

We have audited the accompanying Financial Statements of flex foods limited ("TheCompany") which comprise the Balance Sheet as at 31st March 2019 theStatement of Profit and Loss (including other comprehensive income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year ended on that date and asummary of significant accounting policies and other explanatory information.

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 theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of the affairs of the Company as at 31st March 2019 and the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Companies Act 2013. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities 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 independence requirements thatare relevant to our audit of the financial statements under the provisions of the Act andthe Rules 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 we have obtained 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 judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

Key Audit Matters Auditor response
1. evaluation of uncertain tax positions Principal Audit Procedures
The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Refer notes 32 to the Financial Statements Obtained details of completed tax assessments and demands for the year ended March 31 2019 from management. We also considered legal precedence and other rulings evaluating management's position on these uncertain tax positions. Additionally we considered the effect of new information in respect of uncertain tax positions as at April 1 2018 to evaluate whether any change was required to management's position on these uncertainties.
2. Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of Ind As 115 "Revenue from Contracts with Customers" (new revenue accounting standard) Principal Audit Procedures
The application of the new revenue accounting standard involves certain key judgments relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognized over a period. Additionally new revenue accounting standard contains disclosures which involve 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. We assessed the Company's process to identify the impact of adoption of the new revenue accounting standard. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows: Evaluated the design of internal controls relating to implementation of the new revenue accounting standard. 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 reperformance and inspection of evidence in respect of operation of these controls. 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 for time and material contracts were tested using a combination of approved time sheets including customer acceptances subsequent invoicing and historical trend of collections and disputes. Considering any trade discount/ volume discount given to the customer as adjustment to sales consideration and verifying the control process adopted by the company in recognizing the same in financial statement.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report

Business Responsibility Report Corporate Governance and Shareholder's Information butdoes not include the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

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 Act2013 ("the Act") with respect to the preparation ofthese Financial Statements that give a true and fair view of the financial positionfinancial performance total comprehensive income changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) prescribed under Section 133 of theAct read with Rule 7 of the Companies (Accounts) Rules 2015.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Financial Statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

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 responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibility

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists 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 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 the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation. Materiality is themagnitude of misstatements in the standalone financial statements that individually or inaggregate makes it probable that the economic decisions of a reasonably knowledgeableuser of the financial statements may be influenced. We consider quantitative materialityand qualitative factors in (i) planning the scope of our audit work and in evaluating theresults of our work; and (ii) to evaluate the effect of any identified misstatements inthe financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act we report that:-a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit. b) In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books. c) The Balance Sheet the Statement of Profit and Lossincluding other comprehensive income the Statement of

Changes in Equity and the Statement of Cash Flows dealt with by this Report are inagreement with the relevant Books of Account. d) In our opinion the aforesaid FinancialStatements comply with the Indian Accounting Standards prescribed under Section 133 of theAct read with relevant rules issued thereunder. e) On the basis of the writtenrepresentations received from the directors as on 31st March 2019 taken onrecord by the

Board of Directors none of the directors is disqualified as on 31st March2019 from being appointed as a director in terms of Section 164 (2) of the Act. f) Thereis no matter or transaction in our opinion that may have any adverse effect on thefunctioning of the Company; g) With respect to the adequacy of the internal financialcontrols over financial reporting of the Company and the operating effectiveness of suchcontrols refer to our separate report in "Annexure A"; h) With respect to theother matters to be included in the auditor's Report in accordance with the requirementsof section 197(16) of the Act as amended: In our opinion and to the best of ourinformation and according to the explanations given to us the remuneration paid by thecompany to its director during the year is in accordance with the provisions of section197 of the Act; and i) 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 inour 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 32 to the Financial Statements; ii. The Company did not have anylong-term contracts including derivative contracts for which there were any materialforeseeable losses; and iii. There has been no delay in transferring amounts required tobe transferred to the Investor Education and protection Fund by the Company.

2. As required by the Companies (Auditor's Report) Order 2016 ("the order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act we give in the Annexure "B" a statement on the matters specified inparagraphs 3 and 4 of the Order.

FOR MJMJ & ASSOCIATES LLP chARteRed AccountAnts fiRm ReGistRAtion no.027706n/c400013 plAce:- noidA meGhA JAin dAted: -25th mAy 2019. pARtneRmemBeRshipno . 415389

Annexure "A" To The Independent Auditor's Report Of "Flex FoodsLimited" For The Year Ended 31st March 2019

Referred to in paragraph1(g) under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Flex Foods Limited of even date.

Report on the Internal Financial Controls under Clause (i) of Sub-Section 3 of theSection 143 of the Companies Act 2013.

Report on the Internal Financial Controls

We have audited the Internal Financial Controls over financial reporting of "FLExFOODS LIMITED" ("the Company") as of 31st March 2019in conjunction with our audit of the financial statements of the Company for the yearended on that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance note on Audit of Internal Financial Controls over FinancialReporting issued 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.

Auditors' 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") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section

143(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 with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively 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 Judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial 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.

Opinion

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 31st March 2019based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

FOR MJMJ & ASSOCIATES LLP chARteRed AccountAnts fiRm ReGistRAtion no.027706n/c400013 plAce:- noidA meGhA JAin dAted: -25th mAy 2019. pARtneRmemBeRshipno . 415389

Annexure "B" To The Independent Auditor's Report Of "Flex FoodsLimited" On The Financialst Atement For The Year Ended 31stm Arch 2019

Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date of "FLEx FOODS LIMITED"(‘the Company') for the year Ended on 31st March 2019 wereport that: i. In respect of Fixed Assets of the Company: a) According toinformation and explanation given to us the Company has maintained proper records showingfull particulars including quantitative details and situation of fixed assets. b)According to information and explanation given to us the fixed assets of the Company havebeen physically verified by the Management at reasonable intervals and no materialdiscrepancies were noticed on such verification as compared to books of accounts. 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. In respect of Inventories of the Company:

According to the information and explanation given to us Physical verification ofinventory has been conducted at reasonable intervals by the Management of the Company andno material discrepancies were noticed on physical verification conducted by themanagement. iii. The company has not granted any loans secured or unsecured to companiesfirms Limited Liability Partnerships or other parties covered in the register maintainedunder section 189 of the Companies Act 2013 during the year. Therefore the provision ofclause (iii) of para 3 of the Companies (Auditor's Report) Order 2016 is not applicableto the company. iv. The Company has not given any loans guarantees and security to anyDirector or to any other person in whom Director is interested in compliance with thesection 185 & 186 of the Act. v. The company has not accepted any deposits. Thereforethe provision of clause (v) of para 3 of the Companies (Auditor's Report) Order 2016 isnot applicable to the company. vi. The Provisions of maintenance of cost records specifiedby the Central Government under sub-section (1) of section 148 of the

Companies Act 2013 for the products dealt / manufactured by the company are notapplicable to the company. Therefore the provisions of clause (vi) of para 3 of theCompanies (Auditor's Report) Order 2016 are not applicable to the company. vii. a)According to the information and explanations given to us and the records of the Companyexamined by us in our opinion the Company is generally regular in depositing undisputedstatutory dues including provident Fund Employee's State Insurance Income Tax Goods andService Tax Customs duty Cess and any other material statutory dues as applicable withthe appropriate authorities.

And according to the information and explanations given to us no undisputed amountspayable in respect of provident fund Employees' state insurance income tax duty ofcustoms Cess Goods and Service Tax and other applicable statutory dues were in arrearsas at 31st March 2019 for a period of more than six months from the date theybecame payable. b) According to the information and explanations given to us there are nopending dues in respect of Sales Tax Service tax Value added tax Goods and Service Taxand Cess which has not been deposited on account of any dispute. Details of dues ofCustoms and central excise which have not been deposited as at March 31 2019 on accountof dispute are given below: Disputed Customs and Central Excise Dues: Aggregate Duty of Rs749.84 Lakhs pending before (a) CESTAT Delhi (Rs. 728.84 Lakhs) and (b) Asst.commissioner CGST division Rishikesh (Rs 21 Lakhs). vii. According to the informationand explanations given to us and the records of the Company examined by us the Companyhas not defaulted in repayment of dues to the bank as on the Balance Sheet date. viii.According to the information and explanations given to us and the records of the Companyexamined by us the Company has not raised any money by way of initial public offer orfurther public offer (including debt instruments) or term loans. ix. During the course ofour examination of the books and records of the Company carried out in accordance with thegenerally accepted auditing practices in India and according to the information andexplanations given to us we have neither come across any instances of material fraud bythe Company or on the Company by its officers or employees noticed or reported during theyear under audit nor we have been informed of any such case by the Management. x.According to the information and explanations given to us and the records of the Companyexamined by us the Company has paid/provided for managerial remuneration in accordancewith the requisite approvals mandated by the provisions of section 197 read with ScheduleV to the Act. xi. In our opinion and according to the information and explanations givento us the Company is not a nidhi Company. Therefore the provisions of clause (xii) ofpara 3 of the Companies (Auditor's Report) Order 2016 are not applicable to the Company.xii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act wherever applicable and details of suchtransactions have been disclosed in the Financial Statements as required by the applicableAccounting Standards. xiii. According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year. xiv. According to the information and explanations given to usand based on our examination of the records of the Company the Company has not enteredinto non-cash transactions with Directors or persons connected with him. Therefore theprovisions of clause (xv) of para 3 of the Companies (Auditor's Report) Order 2016 arenot applicable to the Company. xv. According to the information and explanations given tous and based on our examination of the records of the Company the Company is not requiredto be registered under section 45-IA of the Reserve Bank of India Act 1934.

FOR MJMJ & ASSOCIATES LLP chARteRed AccountAnts fiRm ReGistRAtion no.027706n/c400013 plAce:- noidA meGhA JAin dAted: -25th mAy 2019. pARtneRmemBeRshipno . 415389