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Megastar Foods Ltd.

BSE: 541352 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE00EM01016
BSE 00:00 | 20 Sep 42.80 -4.75
(-9.99%)
OPEN

42.80

HIGH

42.80

LOW

42.80

NSE 05:30 | 01 Jan Megastar Foods Ltd
OPEN 42.80
PREVIOUS CLOSE 47.55
VOLUME 2000
52-Week high 48.45
52-Week low 25.00
P/E 9.95
Mkt Cap.(Rs cr) 42
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 42.80
CLOSE 47.55
VOLUME 2000
52-Week high 48.45
52-Week low 25.00
P/E 9.95
Mkt Cap.(Rs cr) 42
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Megastar Foods Ltd. (MEGASTARFOODS) - Auditors Report

Company auditors report

To the members of Megastar Foods Limited Report on the Financial Statements

Opinion

We have audited the accompanying financial statements of M/s MEGASTAR FOODS LIMITED("the Company") (formerly MEGASTAR FOODS PRIVATE LIMITED) which comprises theBalance Sheet as at 31st March 2020 the Statement of Profit and Loss and statement ofcash flows for the year then ended and notes to the 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 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 accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2020 and profit and its cash flows forthe year 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 Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by The Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matter are those matters that in our professional jugdement were mostsignificant in our audit of the financial statement of the current period. Keeping in viewthe materiality there is no key matter to be reported separately.

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 BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone 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.

Responsibility of Management for the Financial 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 financial statements that givea true and fair view of the financial position financial performance and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Accounting Standards specified under Section 133 of the Act read with Rule7 of the Companies (Accounts) Rules 2014. This responsibility also includes maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate implementation and maintenance ofaccounting policies; making judgements 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 these financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

Those Board of Directors are also responsible for overseeing the company's financialreporting process.

Auditor's Responsibility for the Audit of Financial Statements

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 financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act 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'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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa 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 the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the 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 and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit.

(b) In our opinion proper books of accounts 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 and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

(e) On the basis of the written representations received from Directors as on 31stMarch 2020 taken on record by the Board of Directors none of the Directors isdisqualified as on 31st March 2020 from being appointed as a Director in terms of Section164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in 'Annexure A'. (g) With respect to the other matters to be included inthe Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us: i. The Company does not have any pending litigations which wouldimpact its financial position; ii. The Company did not have any long-term contractsincluding derivatives contractsfor which there were any material foreseeable losses; iii.There were no amounts which required to be transferred by the Company to the InvestorEducation and Protection Fund.

2 As required by the Companies (Auditor's Report) Order 2016 ('the Order')issued by the Central Government of India in terms of sub-sectiom (11) of Section 143 ofthe Companies Act 2013 we give in 'Annexure B' a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

3 In our opinion and according to the information and explanations given to usthe remuneration paid by the company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act. The remuneration paid to anydirector is not in excess of the limit laid down under Section 197 of the Act.

For Avnish Sharma & Associates
Chartered Accountants
FRN - 009398N
UDIN: 20097591AAAACX2013
Place : Chandigarh Dinesh Manchanda (M.No. 097591)
Dated : 23.06.2020 Partner

ANNEXURE 'A' TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ('the Act')

We have audited the internal financial controls over financial reporting of M/sMEGASTAR FOODS LIMITED ('the Company') as of March 31 2020 in conjunction with our auditof the financial statements of the Company for the year ended and as on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablised by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India (the 'Guidance Note'). Theseresponsibilities includes the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and effectiveconduct 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 Act.

Auditor's 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 Standards on Auditing prescribed under section 143(10) of the Act and theGuidance Note to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with the ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was establised and maintained and if suchcontrols operated effectively in all material respects.

An 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 auditors' judgment including the assessment of the risks ofmaterial misstatement of the 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 systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpeditures 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 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 controlsover 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2020 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note.

For Avnish Sharma & Associates
Chartered Accountants
FRN - 009398N
UDIN: 20097591AAAACX2013
Place : Chandigarh Dinesh Manchanda (M.No. 097591)
Dated : 23.06.2020 Partner

ANNEXURE 'B' TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)

Reports on Companies (Auditor's Report) Order 2016 ('the Order') issued by the CentralGovernment in terms of Section 143 (11) of the Companies Act 2013 ('the Act') of MegastarFoods Limited ('the Company')

1 In respect to the Company's fixed assets:

(a) The company is in the process of updating proper records showing full particularsincluding quantitative details and situation of fixed assets on the basis of availableinformation.

(b) The fixed assets were physically verified during the year by the Management in aphased periodical manner which in our opinion is reasonable having regard to the size ofthe Company and nature of its assets. According to the information and explanations givento us no material discrepancies were noticed on such verification.

(c) The title deeds of immovable properties which are included under the head'Property Plant & Equipment' are held in the name of the company.

2 (a) The management has conducted the physical verification of inventory atreasonable intervals.

(b) The discrepancies noticed on physical verification of the inventory as compared tobooks records which has been properly dealt with in the books of account were notmaterial.

3 In respect of the loans secured or unsecured granted by the Company to thecompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under Section 189 of the Companies Act 2013:

(a) In our opinion and according to the information given to us the terms andconditions of the loans given by the company are prima facie not prejudicial to theinterest of the Company.

(b) The schedule of repayment of principal and payment of interest has been stipulatedand repayments of principal amounts and/or receipts of interest have been regular as perstipulations.

(c) There is no overdue amounts as at the year-end in respect of both principal andinterest.

4 In our opinion and according to the information and explanations given to usthe Company has complied with the provisions of Section 185 and 186 of the Act in respectof grant of loans making investments and providing guarantees and securities asapplicable.

5 The Company has not accepted any deposits during the year as covered undersection 76 of the Companies Act 2013. Therefore the provisions of the clause 3(v) of theorder are not applicable to the Company.

6 Reporting under clause 3(vi) of the Order is not applicable as the Company'sbusiness activities are not covered by the Companies (Cost Records and Audit) Rules 2014.

7 According to the information and explanations given to us in respect ofstatutory dues:

(a) According to the records of the company the Company has generally been regular indepositing undisputed statutory dues including Income Tax Goods & Service Tax dutyof Customs duty of Excise Cess and other material statutory dues applicable to it withthe appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund Income TaxSales Tax Service Tax Value Added Tax duty of Customs duty of Excise Cess Goods& Service Tax and other material statutory dues in arrears as at 31st March 2020 fora period of more than six months from the date they became payable.

8 In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to banks andfinancial institutions. The Company does not have any loans or borrowings from governmentand has not issued any debentures.

9 In our opinion and according to the information and explanations given to usmonies raised by the term loans during the year have been applied by the Company for thepurposes for which they were raised.

10 To the best of our knowledge and according to the information andexplanations given to us no fraud by the company and no fraud on the Company by itsofficer or employees has been noticed or reported during the year.

11 Managerial remuneration has been paid and provided by the company inaccordance with the requisite approvals mandated by the provision of section 197 of theact read with Schedule V to the Act.

12 The Company is not a Nidhi Company and hence reporting under clause 3(xii) ofthe Order is not applicable.

13 In our opinion and according to the information and explanations given to usthe Company is in compliance with Section 177 and 188 of the Act where applicable forall transactions with related parties and the details of related party transactions havebeen disclosed in the financial statements as required by the applicable accountingstandards.

14 During the year the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures and hence reportingunder clause 3(xiv) of the Order is not applicable to the Company.

15 In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected to its Directors and hence provisions of Section 192 of theAct are not applicable.

16 The Company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934.

For Avnish Sharma & Associates
Chartered Accountants
FRN - 009398N
UDIN: 20097591AAAACX2013
Place : Chandigarh Dinesh Manchanda (M.No. 097591)
Dated : 23.06.2020 Partner

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