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Foods & Inns Ltd.

BSE: 507552 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE976E01023
BSE 00:00 | 25 Sep 51.00 3.95
(8.40%)
OPEN

48.70

HIGH

51.40

LOW

47.00

NSE 05:30 | 01 Jan Foods & Inns Ltd
OPEN 48.70
PREVIOUS CLOSE 47.05
VOLUME 31508
52-Week high 65.30
52-Week low 30.40
P/E 35.66
Mkt Cap.(Rs cr) 257
Buy Price 51.00
Buy Qty 1.00
Sell Price 51.80
Sell Qty 200.00
OPEN 48.70
CLOSE 47.05
VOLUME 31508
52-Week high 65.30
52-Week low 30.40
P/E 35.66
Mkt Cap.(Rs cr) 257
Buy Price 51.00
Buy Qty 1.00
Sell Price 51.80
Sell Qty 200.00

Foods & Inns Ltd. (FOODSINNS) - Auditors Report

Company auditors report

To the Members of Foods and Inns Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Foods and InnsLimited ("the Company") which comprise the Balance Sheet as at March 312019 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Cash Flows and the Statement of Changes in Equity for the year then ended asummary of significant accounting policies and other explanatory information (hereinafterreferred to as "the standalone 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 Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Accounting Standards prescribed under section 133 ofthe 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 affairs of the Company as at March 31 2019 and its profit (including othercomprehensive income) changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the standalone financial statement in accordance with theStandards on Auditing ("SAs") specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India ("ICAI") together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules framed thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the ICAI's Codeof Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone financialstatement.

Key Audit Matters

Key audit matters are those matters that in significance in our professional audit ofthe standalone financial judgment were of most statements of the current period. Thesematters were addressed in the context of our audit of the standalone financial statementsas a whole and in forming our opinion thereon and we do not provide a separate opinionon these matters. We have determined the matters described below to be the key auditmatters:

Key Audit Matter How our audit addressed the key matter
Migration to new ERP
During the year the Company has migrated from Tally ERP 9.0 to SAP a new Enterprise Resource Planning (ERP) system. The new system is a fully integrated financial accounting and reporting system. We assessed and tested the design and operating effectiveness of the controls over the continued integrity of both the old and new systems that were relevant to financial accounting and reporting during the year.
The implementation of a new system has an inherent risk of loss of integrity of key financial data being migrated and the breakdown in operation or monitoring of IT dependent controls within critical business processes which could lead to financial errors or misstatements and inaccurate financial reporting. • In relation to system migration we assessed and tested the controls specifically established over the implementation process and migration of key financial data from the legacy to the new ERP system and we performed walk through to collaborate this.
The Company's financial accounting and reporting systems are heavily dependent on the new system and there is a risk that automated accounting procedures and related IT dependent manual controls are not designed and operating effectively. • The combination of these tests of the controls and the direct tests that we carried out gave us sufficient evidence to enable us to rely on the continued and proper operation of the system for the purpose of the audit of the financial statements.
Due to pervasive risks involved in migrating to a new ERP system this has been considered as a key audit matter.

Information Other than the Standalone Financial Statements and Our Report thereon

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in Annual report butdoes not include the standalone financial statements and our auditor's report thereon. Ouropinion on the standalone financialstatements does not cover the other information and wedo not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information identified above and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the 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.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements

The Company's management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income changes in equity cash flows of the Company inaccordance with the accounting principles generally accepted in India including the IndAS and relevant provisions of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that and fair view andare free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements Management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial 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 influencethe . economic decisions ofuserstaken onthe statements basis ofthese standalone financial As part of an audit inaccordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

• Materiality is the magnitude of the misstatement in the standalone financialstatement that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the standalone financial statement may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and evaluating the results of our work; and (ii) to evaluatethe effects of any identified misstatements in the standalone financial statement.

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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when 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 the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Act we givein the "Annexure A" a statement on the matters specified in the paragraph 3 and4 of the Order.

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 purposes of our audit;

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

c) The Balance Sheet the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Cash Flows and the Statement of Changes in Equity dealt with bythis 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 relevant rulesissued thereunder and relevant provisions of the Act;

e) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of section 164(2) oftheAct;

f) With respect to the adequacy of the internal financialcontrols with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols with reference to financial statements;

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act; and

h) With respect to the other matters to be included in the Auditor's Report inaccordance with rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended 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 as at March 31 2019 onits financial position in its standalone financial statements - Refer Note 40 to thestandalone financial statements;

ii. The Company has a process whereby periodically all long-term contracts are assessedfor material foreseeable losses. At the year end the Company has reviewed and ensuredthat adequate provision as required under any law / accounting standards for materialforeseeable losses on such long term contracts has been made in the books of account; and

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

For G. M. Kapadia & Co.
Chartered Accountants
Firm's Registration No: 104767W
Atul Shah
Place : Mumbai Partner
Dated: May 30 2019 Membership No: 039569

Annexure A referred to in paragraph 1 under "Report on Other Legal and RegulatoryRequirements" of our report on even date to the members of the Company on thestandalone financial statements for the year ended March 31 2019

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its property plant and equipment;

(b) The Company has a regular programme of physical verification of property plant andequipment by which all property plant and equipment of the Company are being verified ina phased manner over a period of three years which in our opinion is reasonable havingregard to the size of the Company and nature of its business. Pursuant to the program aportion of property plant and equipment has been physically verified by the managementduring the year and no material discrepancies were noticed on verification conductedduring the year as compared with the book records; and

(c) Based on audit procedures performed for the purpose of reporting the true and fairview of the standalone financial according to information and explanations given by themanagement and further based on certificate received from the debenture trustee / securitytrustee the title deeds of immovable properties included in property plant and equipmentare held in the name of the Company.

(ii) (a) Inventories other than stock-in-transit and stock lying in overseas godownhave been physically verified during the year by the management during the year or at theyear end. For stock in transit at the year end the necessary documentary evidence havebeen obtained. In case of stock lying in the overseas godown at the year end thecertificate confirming such stock has been received. In our opinion the frequency ofverification is reasonable; and

(b) The discrepancies noticed verificationas compared to the book records werenot material and have been properly dealt physical with in the books of account.

(iii) 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 paragraph 3(iii)(a) (b) and (c) of the Order are notapplicable;

(iv) There are no overdue amounts in respect of such loan. In our opinion and accordingto the information and explanations given to us the Company has complied with theprovisions of section 185 and 186 of the Act in respect of investments made and loansguarantees and securities granted.

v) The Company has complied with the directives issued by the Reserve Bank of India andthe provisions of section 73 to 76 or any other relevant provisions of the Act and therules framed there under to the extent applicable. We are informed by the management thatno order has been passed by the Company Law Board or National Company Law Tribunal orReserve Bank of India or any court or any other tribunal in this regard.

(vi) The Central Government has prescribed maintenance of cost records under section148(1) of the Act for the products manufactured by the Company. We have broadly reviewedthe books of account maintained and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained by the Company. We have not howevermade a detailed examination of the records with a view to determine whether they areaccurate or complete.

(vii) (a) The Company has generally been regular in depositing undisputed statutorydues including provident fund employees' state insurance income tax sales tax servicetax duty of customs duty of excise value added tax goods and services tax cess andother applicable statutory dues with the appropriate authorities. No undisputed statutorydues payable were in arrears as at March 31 2019 for a period of more than six monthsfrom the date they became payable; and (b) The details of dues of income tax sales taxservice tax duty of customs duty of excise or value added tax or cess which have notbeen deposited with the concerned authorities on account of dispute are given below:

Nature of dues Period to which the amount relates Forum where dispute is pending Amount involved (Rs. in Lakhs)
2013-14 Commissioner of Income-tax (Appeals) 14.16
The Income-tax Act 1961 2014-15 Commissioner of Income-tax (Appeals) 447.45
2015-16 Commissioner of Income-tax (Appeals) 333.31
The Finance Act 1994 2004-05 to 2007-08 Commissioner of Central Excise (Appeals) 3.96

(viii) The Company has not defaulted in repayment of dues to any financialinstitutions banks government or debenture holders.

(ix) The Company has not raised any money by way of initial public offer (includingdebt instrument) during the year. Accordingly paragraph 3(ix) of the order in respectthereof is not available. Money raised by way of term loan are applied for the purpose forwhich those were raised.

(x) To the best of our knowledge and belief and according to the information andexplanations given to us no fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the year.

(xi) According to the information and explanations 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 to the Act.

(xii) In our opinion and according to information and explanation given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable to the Company.

(xiii) 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 where applicable and details of suchtransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.

(xiv) According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has complied with the provisions ofsection 42 of the Companies Act 2013 in respect of preferential allotments of equityshares and convertible warrants made by the Company during the year and the amounts raisedhave been used for the purpose for which the funds were raised.

(xv) According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not entered into non cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

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

For G. M. Kapadia & Co.
Chartered Accountants
Firm's Registration No: 104767W
Atul Shah
Place : Mumbai Partner
Dated: May 30 2019 Membership No: 039569

Annexure B - referred to in paragraph 2(f) under "Report on Other Legal andRegulatory Requirements" of our Independent Auditor's report of even date to themembers of Foods and Inns Limited on the Standalone Financial Statements for the yearended March 31 2019 Report on the Internal Financial Controls under section 143(3)(i) ofthe Act

We have audited the internal financial controls with reference to financial statementsofFoods and Inns Limited (‘‘the Company'') as of March 31 2019 inconjunction with our audit of the standalone financial statements of the Company for theyear 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 with reference statements criteriaestablished by the Company considering the essential components of internal control statedin the Guidance tofinancial Note on Audit of Internal Financial Controls over FinancialReporting ("Guidance Note") issued by the Institute of Chartered Accountants ofIndia ("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing issued by the ICAI anddeemed to be prescribed under section 143(10) of the Act to the extent applicable to anaudit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the ICAI. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls with reference to financialstatements were established and maintained and if such controls operated effectively inall material respects. Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls system with reference to financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to financial statements included obtaining an understanding of internalfinancial controls with referencetofinancialstatements assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk both applicable to an audit of InternalFinancial Controls and both issued by the ICAI. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thestandalone financial statements whether due to fraud or error. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the Company's internal financial controls system with reference to financialstatements.

Meaning of Internal Financial Controls with reference to financial statements

A company's internal financial control with referencetofinancialstatements is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standalonefinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the standalonefinancial statements.

Inherent Limitations of Internal Financial Controls with reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with referencetofinancialstatements to future periods are subject to the riskthat the internal financial control with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 31 2019 based on the internal control with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note.

For G. M. Kapadia & Co.
Chartered Accountants
Firm's Registration No: 104767W
Atul Shah
Place : Mumbai Partner
Dated: May 30 2019 Membership No: 039569

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