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Hindustan Foods Ltd.

BSE: 519126 Sector: Agri and agri inputs
NSE: HNDFDS ISIN Code: INE254N01018
BSE 00:00 | 29 Jul 1942.10 -3.95
(-0.20%)
OPEN

1980.00

HIGH

1980.95

LOW

1935.00

NSE 00:00 | 29 Jul 1953.95 1.15
(0.06%)
OPEN

1925.00

HIGH

1979.00

LOW

1925.00

OPEN 1980.00
PREVIOUS CLOSE 1946.05
VOLUME 256
52-Week high 2580.00
52-Week low 613.00
P/E 112.85
Mkt Cap.(Rs cr) 4,117
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1980.00
CLOSE 1946.05
VOLUME 256
52-Week high 2580.00
52-Week low 613.00
P/E 112.85
Mkt Cap.(Rs cr) 4,117
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Hindustan Foods Ltd. (HNDFDS) - Auditors Report

Company auditors report

To the Members of Hindustan Foods Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the Standalone Financial Statements of Hindustan Foods Limited("the Company") which comprise the Balance sheet as at March 31 2020 and theStatement of profit and loss Statement of changes in equity and Statement of cash flowsfor the year then ended and notes to the Standalone Financial Statements including 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 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 Indian Accounting Standards prescribed under section133 of the Act read with Companies (Indian Accounting Standards) Rules 2015 as amendedand other accounting principles generally accepted in India of the state of affairs ofthe Company as at March 31 2020 and profit changes in equity and its cash flows for theyear ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India (ICAI) togetherwith the ethical requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion.

emphasis of Matter

We draw attention to Note 39 to the Standalone Financial Statements which states thatthe management has made an assessment of the impact of COVID-19 on the Company'soperations financial performance and position as at and for the year ended March 31 2020and has concluded that there

is no material impact which is required to be recognised in the Standalone Fina ncia lStatements. According ly no adjustments have been made to the Standalone FinancialStatements.

Our opinion is not modified in respect of this matter.

Information Other than the Standalone Financial Statements and Auditor's Report thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the Management Report Chairman's Statement Director's Report butdoes not include the Standalone Financial Statements and our auditor's report thereon.

Our opinion on the Standalone Financial Statements does not cover the other informationand we do 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 and in doing so consider whether the other informationis materially inconsistent with the Standalone Financial Statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Financial Statements of the current period.These matters were addressed in the context of our audit of the Standalone FinancialStatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

Accounting for Common Control Business Combination - refer note 37(a)(1) to theStandalone financial statements The Scheme of Arrangement ('the Scheme') presented underSection 230 to 232 and other applicable provisions of the Companies Act 2013 read withthe rules prescribed thereunder for the business combination of Detergent ManufacturingUnit of Avalon Cosmetics Private Limited ('ACPL') with the Company was approved by theHon'ble National Company Law Tribunal vide its order dated November 25 2019 (" theNCLT Order"). The Certified copy

of the NCLT order was filed with Registrar of Companies on December 27 2019.Consequently the Scheme became operative from December 27 2019 and effective from April1 2018 i.e. appointed date. the said business combination has been accounted under the'pooling of interests' method in accordance with Appendix C of lnd AS 103 'BusinessCombination' and comparatives have been restated for business combination with effect fromApril 1 2018.

Our audit procedures included the following:

• We evaluated the appropriateness of 'Pooling of interest' method of accountingadopted by the management to account for the common control business combination.

• We corroborated management's alignment of accounting policies and estimates bycomparing the significant accounting policies and estimates of ACPL and comparing with theCompany's accounting policies and estimates.

• We read the Scheme and focused on accounting of the same as per Appendix C - IndAS 103 Business Combination and calculation of capital reserve on the businesscombination.

• We evaluated appropriateness of the disclosures in respect of this businesscombination in the Standalone financial statement and assessed the completeness andmathematical accuracy of the relevant disclosures.

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

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Standalone Financial Statementsthat give a true and fair view of the financial position financial performance changesin equity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under section133 of the Act. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; the selectionand application of appropriate accounting policies; making judgments and estimates thatare reasonable and prudent; and the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Standalone Financial Statement that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the Standalone Financial Statements the Board of Directors is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so.

Those 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 influence the economic decisions of userstaken on the basis of these Standalone Financial Statements.

We give in "Annexure A" a detailed description of Auditor's responsibilitiesfor Audit of the Standalone Financial Statements.

Other Matter

We draw attention to note 37(a) to the Standalone Financial Statements which states thecomparative financial information of the Company year ended March 31 2019 have beenrestated to record common control business combinations with effect from April 1 2018.The financial information of the Detergent Manufacturing Unit of Avalon Cosmetics PrivateLimited M/s Galaxy Healthcare Products and M/s Shivom Industries for the year ended March31 2019 included in these Standalone Financial Statements of the Company have beenapproved by the Company's Board of Director but have not been subjected to audit by us.The adjustments made to the previously issued Standalone Financial Statements to giveeffect of the common control business combinations have been audited by us. our opinion isnot modified in respect of this matter.

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 sub-section (11) of section 143 ofthe Act we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the 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 the Statement of changes inequity and the Statement of cash flow dealt with by this Report are in agreement with thebooks of account.

(d) In our opinion the aforesaid Standalone Financial Statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164 (2) of theAct.

(f) With respect to the adequacy of the internal financial controls with reference toStandalone Financial Statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure C".

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company does not have any pending litigations which would impact its financialposition;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

As required by The Companies (Amendment) Act 2017 in our opinion according toinformation explanations given to us the remuneration paid by the Company to itsdirectors is within the limits laid prescribed under Section 197 of the Act and the rulesthereunder.

For MSKA & Associates

Chartered Accountants

ICAI Firm Registration No. 105047W

Amrish Vaidya

Partner

Membership No. 101739 UDIN: 20101739AAAADH9887

Place: Mumbai Date: June 26 2020

Annexure A to the Independent Auditor's Report

On Even Date on the Standalone Financial Statements of Hindustan Foods Limited

Auditor's Responsibilities for the Audit of the Standalone 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 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 Companyhas internal financial controls with reference to Standalone Financial Statements in placeand the operating effectiveness of such 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.

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 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.

For MSKA & Associates

Chartered Accountants

ICAI Firm Registration No. 105047W

Amrish Vaidya

partner

Membership No. 101739 uDIN: 20101739AAAADH9887

place: Mumbai Date: June 26 2020

Annexure B to the Independent Auditors' Report

on Even Date on the Standalone Financial Statements of Hindustan Foods Limited for theyear ended March 31 2020

[referred to in paragraph 1 under 'report on other legal and Regulatory Requirements'in the Independent Auditors' Report]

i. (a) The Company has maintained proper records

showing full particulars including quantitative details and situation of fixed assets(property plant & equipment).

(b) All the fixed assets (property plant and Equipment) have not been physicallyverified by the management during the year but there is a regular program of verificationwhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us the title deeds ofimmovable properties are held in the name of the Company except for a immovableproperties acquired as a part of Scheme of Arrangement [see note 37(a)(I)] in the currentyear. As explained to us Registration of title deeds is in progress in respect of animmovable property acquired during the year aggregating Rs. 299.04 lakhs.

ii. The inventory has been physically verified during the year by the management. Inour opinion the frequency of verification is reasonable. No material discrepancies werenoticed on verification between the physical stock and the book records.

iii. The Company has granted loans secured or unsecured to a company covered in theregister maintained under section 189 of the Act.

(a) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the rate of interest and other terms andconditions on which the loans have been granted to a company listed in the registermaintained under Section 189 of the Act are not prima facie prejudicial to the interestof the Company.

(b) In case of the loans granted to a company listed in the register maintained undersection 189 of the Act schedule of repayment of principal and

payment of interest have been stipulated. The repayment of loans and interest are notyet due as on March 31 2020.

(c) There are no amounts overdue for more than ninety days in respect of the loangranted to companies listed in the register maintained under section 189 of the Act.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act in respect ofloans investments guarantees and security made.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the meaning of Sections 7374 75 and 76 of the Act and the rules framed there under.

vi. The provisions of sub-section (1) of section 148 of the Act are not applicable tothe Company as the Central Government of India has not specified the maintenance of costrecords for any of the products of the Company. Accordingly the provisions stated inparagraph 3 (vi) of the Order are not applicable to the Company.

vii. (a) According to the information and explanations

given to us and the records of the Company examined by us in our opinion undisputedstatutory dues including provident fund employees' state insurance income-tax duty ofcustom goods and service tax cess and other statutory dues have generally been regularlydeposited with the appropriate authorities though there has been a slight delay in a fewcases.

According to the information and explanations given to us undisputed dues in respectof provident fund and professional tax dues which were outstanding at the year end for aperiod of more than six months from the date they became payable.

Statutory dues which were outstanding as at March 31 2020 for a period of more thansix months from the date they became payable are as follows:

Name of the statute Nature of the dues Amount Rs. period to which the amount relates Due Date date of payment Remarks if any
Employees provident Funds and Miscellaneous provisions Act 1952 provident Fund 5810 April 2019 May 15 2019 not yet paid none
employees provident Funds and Miscellaneous provisions Act 1952 provident Fund 14672 May 2019 June 15 2019 not yet paid none
employees provident Funds and Miscellaneous provisions Act 1952 provident Fund 1336 June 2019 July 15 2019 not yet paid none
employees provident Funds and Miscellaneous provisions Act 1952 provident Fund 174 August 2019 September 15 2019 not yet paid none
ffieiangana professional tax Act 1987 professional tax 200 June 2019 July 31 2019 June 25 2020 none
ffieiangana professional tax Act 1987 professional tax 400 July 2019 August 31 2019 June 25 2020 none
ffieiangana professional tax Act 1987 professional tax 1400 August 2019 September 30 2019 June 25 2020 none

(b) According to the information and explanation given to us and the records of theCompany examined by us there are no dues of income tax goods and service tax customsduty cess and any other statutory dues which have not been deposited on account of anydispute.

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of dues to the bank. The Company does not have anyloan or borrowing from the financial institution or Government nor has it issued anydebentures as at Balance Sheet date.

ix. In our opinion according to the information explanation provided to us moneyraised by way of term loans during the year have been applied for the purpose for whichthey were raised. the Company has not raised any money by way of initial public offer orfurther public offer (including debt instruments) during the year.

x. During the course of our audit examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations

given to us we have neither come across any instance of material fraud by the Companyor on the Company by its officers or employees.

xi. According to the information and explanations given 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 the information and explanations given to us theCompany is not a Nidhi Company. Accordingly the provisions stated in paragraph 3(xii) ofthe order are not applicable 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 Indian Accounting Standards.

xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has made preferential allotment ofshares and private placement of warrants convertible into equity shares during the yearand the requirements of Section 42 of the Act have been complied with. the amount raisedhas been used for the purposes for which they were raised.

xv. According to the information and explanations 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 provisions statedin paragraph 3(xv) of the order are not applicable to the Company.

xvi. In our opinion the Company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions stated in paragraph3 (xvi) of the order are not applicable to the Company.

For MSKA & Associates

Chartered Accountants

ICAI Firm registration No. 105047W

Amrish Vaidya

partner

Membership No. 101739

uDIN: 20101739AAAADH9887

place: Mumbai

Date: June 26 2020

Annexure C to the Independent Auditor's Report

Of Even Date on the Standalone Financial Statements of Hindustan Foods Limited

[Referred to in paragraph 2(f) under 'Report on Other Legal and RegulatoryRequirements' in 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")

We have audited the internal financial controls with reference to Standalone FinancialStatements of Hindustan Foods Limited ("the Company") as of March 31 2020 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 to Standalone FinancialStatements 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 (ICAI) (the"Guidance Note"). 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.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to Standalone Financial Statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingissued by ICAI and deemed to be prescribed under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether internal financial controls with reference toStandalone Financial Statements was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the internalfinancial controls with reference to Standalone Financial Statements and their operatingeffectiveness. Our audit of internal financial controls with reference to StandaloneFinancial Statements included obtaining an understanding of internal financial controlswith reference to Standalone Financial Statements assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of theStandalone Financial Statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls withreference to Standalone Financial Statements.

Meaning of Internal Financial Controls With Reference to Standalone FinancialStatements

A Company's internal financial control with reference to Standalone FinancialStatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of Standalone Financial Statements for externalpurposes in accordance with generally accepted accounting principles. A Company's internalfinancial control with reference to Standalone Financial Statements includes thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of Standalone Financial Statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the Standalone Financial Statements.

Inherent Limitations of Internal Financial Controls With Reference to StandaloneFinancial Statements

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 reference to Standalone Financial Statements to future periods are subjectto the risk that the internal financial control with reference to Standalone FinancialStatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects internal financial controlswith reference to Standalone Financial Statements and such internal financial controlswith reference to Standalone Financial Statements were operating effectively as at March31 2020 based on the internal control with reference to Standalone Financial Statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note.

For MSKA & Associates

Chartered Accountants

ICAI Firm Registration No. 105047W

Amrish Vaidya

Partner

Membership No. 101739 UDIN: 20101739AAAADH9887

Place: Mumbai Date: June 26 2020

.