Spectrum Foods Limited Jaipur
Report on the Financial Statements
We have audited the accompanying financial statements of Spectrum Foods Limited(the Company') which comprise the Balance Sheet as at 31st March 2020the Statement of Profit and Loss and the Cash Flow Statement for the year then ended anda summary of significant accounting policies and other explanatory information.
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 Act 2013 ("the Act") with respect to the preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding 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.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under. We have conducted our audit inaccordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the financialstatements.
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 the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
(a) In the case of the Balance Sheet of the state of affairs of the Company as at 31stMarch 2020; (b) In the case of the Statement of Profit and Loss of the profit for theyear ended on that date; and (c) In the case of the Cash Flow Statement of the cash flowsfor the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Government of India in terms of sub-section (11) of Section 143 of the Actand on the basis of such checks of the books and records of the Company as we consideredappropriate and according to the information and explanations given to us we give in the AnnexureA a statement on the matters specified in the paragraphs 3 and 4 of the said 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 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 the 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; and
f) With respect to the adequacy of the Internal Financial Controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate report in Annexure B.
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 has disclosed the impact of pending litigations on its financialposition in its financial statements.
ii. The company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; and
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT
The Annexure referred to in paragraph (1) of Report on other Legal and RegulatoryRequirements' of our Independent Auditors' Report of even date to the members of theSpectrum Foods Limited Jaipur on the Financial statements for the year ended on 31stMarch 2020 we report that:
(i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets (property plant and equipments).
b) As explained to us the fixed assets (property plant and equipments) have beenphysically verified by the management during the year in a phased periodical manner whichin our opinion is reasonable having regard to the size of the company and nature of itsassets. No material discrepancies were noticed on such physical verification.
c) With respect to immovable properties of acquired land and building that are freeholdaccording to the information and explanation given to us. In respect of immovableproperties of land and buildings that have been taken on lease and disclosed as fixedassets in the financial statements the lease agreements are in the name of the Companywhere the company is the lessee in the agreement.
(ii) As per the information and explanation given to us the Company's management hascarried out physical verification of inventory at regular intervals. No materialdiscrepancies were noticed on such physical verification.
(iii) The Company has granted loans secured or unsecured to any companies firmslimited liability partnership or other parties covered in register maintained undersection 189 of the Companies Act 2013 hence reporting as under:
A) The term and conditions of grant of such loan are in our opinion prime facie notprejudicial to the company' interest.
B) The schedule of repayment of principal and payment of interest has been notstipulated. As per explanation received loans are given without interest.
C) In view of not stipulation on interest and repayment amount of overdue notascertainable as the end of year.
(iv) In our opinion and according to the information and explanations given to usduring the year the company has complied with the provision of section 185 and section 186of the act in respect of grant of loans making investment and providing guarantees andsecurities as applicable.
(v) According to the information and explanations given to us the company has notaccepted any deposits from the public and hence the directives issued by the Reserve Bankof India and the provision of section 73 to 76 or any other relevant provisions of the actand the Companies (Acceptance of Deposit) Rules 2016 with regard to the deposits acceptedfrom the public are not applicable. According to the information and explanations given tous no Order has been passed by the Company Law Board or the National Company Law Tribunalor the Reserve Bank of India or any Court or any other Tribunal on the Company.
(vi) As Informed to us the maintenance of Cost Records has not been specified by theCentral Government under sub- section (1) of section 148 of the Act in respect of theactivities carried on by the company.
(vii) a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/accrued in the books ofaccounts in respect of undisputed statutory dues including provident fund employee stateinsurance income tax sales tax service tax goods & service tax duty of customsduty of excise value added tax GST cess and other material statutory dues havegenerally been regularly deposited with the appropriate authorities and there are noundisputed dues outstanding as on 31st March 2020 for a period of more than sixmonths from the date when they became payable.
b) On the Basis of information and explanation given to us details of dues ofIncome-tax Sales-Tax Service Tax Custom Duty Excise Duty Value Added Tax which havenot been deposited as on 31st March 2020 on account of disputes are givenbelow:
|Name of the statute ||Nature of dues ||Amount Demanded ||Amount Deposited ||Period ||Appeal Status |
|Income Tax Act1961 ||Income Tax ||1160 ||Nil ||AY 12-13 ||Pending before A.O |
|Income Tax Act1961 ||TDS ||34101 ||Nil ||AY 18-19 ||Pending before A.O |
|Income Tax Act1961 ||TDS ||1260 ||Nil ||AY 17-18 ||Pending before A.O |
|Income Tax Act1961 ||TDS ||5344.50 ||Nil ||AY 16-17 ||Pending before A.O |
|Income Tax Act1961 ||TDS ||15090.50 ||Nil ||AY 15-16 ||Pending before A.O |
|Income Tax Act1961 ||TDS ||902 ||Nil ||Prior Years ||Pending before A.O |
(viii) Based on examination of books of accounts and information and explanation givento us the Company has not defaulted in repayment of loans or borrowings to a financialinstitution or bank. Company has not issued any debentures; hence nothing is due todebenture holders.
(ix) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not raised moneys by way of initial public offerincluding debt instruments and term Loans. Accordingly the provisions of clause 3(ix) ofthe order are not applicable to the company and hence not commented upon.
(x) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company no material fraud by the company or any fraudon the Company by its officers or employees has been noticed or reported during the year.
(xi) The managerial remuneration has been paid in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct.
(xii) The company is not a Nidhi Company; hence reporting under this clause is notapplicable.
(xiii) The Company has complied with the provisions of Section 177 and section 188 ofthe Act wherever applicable. Details of the transactions with the related parties havebeen disclosed in the financial statements as required by the applicable Indian accountingstandards.
(xiv) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3(xiv) of the order are not applicable tothe company and hence not commented upon.
(xv) Based upon the audit procedure performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him as covered under section 192 of Companies Act2013. Accordingly the provisions of clause 3(xv) of the order are not applicable to theCompany and hence not commented upon.
(xvi) According to the information and explanations given to us the company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act1934.Accordingly provision of clause 3(xvi) of the order is not applicable to thecompany.
ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT
Referred to in paragraph 2(f) under Report on Other Legal and RegulatoryRequirements' section our report of even date to the members of SPECTRUM FOODS LIMITED onthe financial statements for the year ended 31st March 2020
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 financial statementsof Spectrum Foods Limited (the Company') as of 31st March 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 with reference to financial statements based on the internal controlsover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia (ICAI). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to Company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.
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 on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlswith reference to financial statements was established and maintained and if such controlsoperated effectively in all material respects. Our audit involves performing procedures toobtain audit evidence about the adequacy of the internal financial control system withreference to financial statements and their operating effectiveness. Our audit of internalfinancial control with reference to financial statements included obtaining anunderstanding of internal financial control with reference to financial statementsassessing 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 withreference to financial statements.
Meaning of Internal Financial Controls with reference to financial statements
A Company's internal financial control with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial control withreference to financial statements includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorizations of management and directors of the Company; 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 financial statements.
Inherent Limitations of Internal Financial Controls with reference to financialstatements
Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
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 at31st March 2019 based on the internal controls over financial reportingcriteria established by the Company considering the components of internal controls statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the ICAI.