TO THE MEMBERS OF SURYO FOODS & INDUSTRIES LIMITED
Report on the Audit of the Financial
We have audited the accompanying financial statements of SURYO FOODS & INDUSTRIESLIMITED ("the Company") which comprise the Balance Sheet as at March 31 2019the Statement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year ended on that date and asummary of the significant accounting policies and other explanatory information(hereinafter referred toas"the financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2019 the profit and total comprehensiveincome changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under section 143(10) of the Act (SAs). Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Audit ofthe Financial 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 independence requirements that are relevant to our audit ofthe financial statements under the provisions of the Act and the Rules made there underand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the ICAI's Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matter described below to be the key audit matters to be communicatedin ourreport
|Key Audit Matter ||Auditor s Response |
|1 Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 ||Principal Audit Procedures |
|Revenue from Contracts with Customers (new revenue accounting standard) ||We assessed the Company s process to identify the impact of adoption of the new revenue accounting standard. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows: |
|The application of the new revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognised over a period. Additionally new revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheetdate. || Evaluated the design of internal controls relating to implementation of the new revenue accounting standard. |
| || Selected a sample of continuing and new contracts and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving enquiry and observation reperformance and inspection of evidence in respect of operation of these controls. |
|Refer Notes 3 (b) to the Financial Statements || Tested the relevant information technology systems' access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the new revenue accounting standard. |
| || Selected a sample of continuing and new contracts and performed the following procedures: |
| ||3 Read analysed and identified the distinct performance obligations in these contracts. |
| ||3 Compared these performance obligations with that identified and recorded by the Company. |
| ||3 Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration. |
| ||3 Samples in respect of revenue recorded for time and material contracts were tested using a combination of approved time sheets including customer acceptances subsequent invoicing and historical trend of collections and disputes. |
|3 ||In respect of samples relating to fixed price contracts progress towards satisfaction of performance obligation used to compute recorded revenue was verified with actual and estimated efforts from the time recording and budgeting systems. We also tested the access and change management controls relating to these systems. |
|3 ||Sample of revenues disaggregated by type and service offerings was tested with the performance obligations specified in the underlying contracts. |
|3 ||Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings. |
|3 ||We reviewed the collation of information and the logic of the report generated from the budgeting system used to prepare the disclosure relating to the periods over which the remaining performance obligations will be satisfied subsequent to the balance sheetdate. |
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 financial statements and our auditor's report there on. Our opinion on thefinancial statements does not cover the other information and we do not express any formof assurance conclusion there on.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance total comprehensiveincome changes in equity and cash flows of the Company in accordance with the Ind AS andother accounting principles generally accepted in India. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities; 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 financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of Directors is responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibilities for the Audit of the 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 in orderto 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 suchcontrols.
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 causethe 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 based on our audit we reportthat: |
|a) We have sought and obtained all the information and explanations which to the best of 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 the Company so far as it appears from our examination of those books. |
|c) The Balance Sheet the Statement of Profit and Loss including Other Comprehensive Income Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the relevant books of account. |
|d) In our opinion the aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules2014. |
|e) On the basis of the written representations received from the directors as on March 31 2019 taken on record by the Board of Directors none of the directors is disqualified as on March 31 2019 from being appointed as a director in terms of Section 164 (2) of the Act. |
|f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls over financial reporting. |
|g) With respect to the other matters to be included in the Auditor's Report in accordance with the requirements of section 197(16) of the Act as amended: |
|In our opinion and to the best of our information and according to the explanations given to us the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act. |
|h) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended in our opinion and 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 financial position in its financial statements. |
|ii. The Company has made provision as required under the applicable law or accounting standards for material foreseeable losses if any on long-term contracts including derivative contracts. |
|iii. There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the Company. |
Annexure 1 to the Independent Auditors' Report
(Referred to in paragraph 1 under the heading "Report on other legal andregulatory requirements" of our report of even date)
Re: SURYO FOODS & INDUSTRIES LIMITED (the company')
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a regular programme of Physical Verification of its Fixed Assetsby which all Fixed Assets are verified in a phased manner over a period of two years. Inour opinion the periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets. Pursuant to such program a portion ofFixed Assets has been Physically Verified by the Management and no material discrepancieswere noticed on such verification.
(c) In our Opinion and according to the information and explanations given by themanagement the title deeds of immovable properties included in property plant andequipment are held in the name of the company.
(ii) (a) The Inventories have been Physically Verified by the Management during theYear. In our opinion the frequency of such Verification is reasonable.
(B) The discrepancies noticed on the aforesaid verification between the physical stocksand book records were not material.
(iii) (a) According to the information and explanations given to us the terms andconditions in respect of the loans granted by the Company (secured / unsecured loans) tocompanies / firms / limited liability partnerships or other parties covered in theregister maintained under section 189 of the Act are not prejudicial to the company'sinterest.
(b) In respect of the aforesaid loans the schedule of repayment of principal andpayment of interest has been stipulated for the loans granted and the repayment/receiptsare regular.
(c) In respect of the aforesaid loans there is no overdue amount for more than ninetydays. (iv) 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 Companies Act2013 in respect of grant of Loans making investments and providing guarantees andsecurities as applicable.
(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits within the meaning of Sections 73 to 76 of the Actand the Companies (Acceptance of Deposits) Rules 2014 (as amended). Accordingly theprovisions of clause 3(v) of the Order are not applicable.
(vi) As per the explanations given by management the Company is not required tomaintain books of account pursuant to the rules prescribed by the Central Government formaintenance of Cost Records under section (1) of section 148 of the Act
(vii) (a) According to the information and explanations given to us and on the basisof our examination of the records the Company is regular in depositing with appropriateauthorities undisputed statutory dues including provident fund employees' stateinsurance income-tax value added tax goods and service tax cess and other statutorydues applicable to it.
(b) According to the information and explanations given to us there are no dues ofprovident fund employees' state insurance income tax service tax value added taxgoods and service tax cess and other statutory dues applicable to it.
(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of dues to any bank financial institution andgovernment or debenture holders during the year.
(ix) According to the information and explanations given by the management the TermLoans taken by the Company have been applied for the purpose for which they were raised.The Company has not raised any moneys by way of Initial Public Offer or further publicoffer (including debt instruments) during the year.
(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the company or no fraud on the companyby the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.
(xii) In our opinion the Company is not a Nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review. Accordingly paragraph 3(xiv) of the order is not applicable.
(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of Companies Act 2013. Accordingly the provisions ofclause 3(xv) of the Order are not applicable. The Company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934. Accordingly the provisions ofclause (xvi) of the Order are not applicable to the Company.
|For SANJIT MOHANTY & CO. |
|Chartered Accountants |
|ICAI Firm Registration Number: 328858E |
|SANJIT KUMAR MOHANTY |
|Membership Number: 069927 |
|Place of Signature: Bhubaneswar |
|Date: 29th May' 2019 |