To the Members of
Tasty Bite Eatables Limited
Report on the Audit of the Financial Statements
We have audited the financial statements of Tasty Bite Eatables Limited ("theCompany") which comprise the balance sheet as at 31 March 2021 and the statement ofprofit and loss (including other comprehensive income) statement of changes in equity andstatement of cash flows for the year then ended and notes to the financial statementsincluding a summary of the significant accounting policies and other explanatoryinformation.
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 ("Act") in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2021 and profit and other comprehensiveincome changes in equity and its cash flows for the 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 Act.
Our responsibilities under those SAs are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. Weare independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India together with the ethical requirements thatare relevant to our audit of the financial statements under the provisions of the Act andthe Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our opinionon the financial 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.
|The key audit matter ||How the matter was addressed in our audit |
|Provision for inventory obsolescence || |
|As at 31 March 2021 the Company held INR 692.79 million of inventories net of provision for inventory obsolescence of INR 30.50 million. Given the size of the inventory balance relative to the total assets of the Company and considering the estimates and judgments described below the valuation of inventory and provision for inventory obsolescence required significant audit attention. ||We have performed the following procedures over valuation of inventory and provision for inventory obsolescence: |
|As disclosed in Note 3.5 and Note 10 inventories are held at the lower of cost (determined using the weighted average cost method) and net realizable value. At each reporting period the valuation of inventory is reviewed by management for provisioning. This assessment is of higher significance and involves increased estimation uncertainty in the current period considering the possible impact of the ongoing Covid-19 pandemic on the Company's business. || We obtained an understanding tested the design implementation and operating effectiveness of controls surrounding the inventory valuation process; |
|The determination of whether inventory will be realized for a value less than cost requires management to exercise judgment and apply assumptions. Management undertakes the following procedures for determining the level of write down required: || We performed testing on the Company's controls over the inventory cycle count process. In testing these controls we observed the inventory cycle count process at selected locations on a sample basis inspected the results of the inventory cycle count and assessed whether the variances were accounted for and approved by management; |
| Performs periodic cycle counts to assess whether specific write down is required for obsolete inventory / shortages; || For a sample of inventory items we also re-performed the weighted average cost calculation and compared the weighted average cost to the net realizable value; |
| Uses inventory ageing reports together with historical trends to estimate the likely future saleability / usability of slow moving and older inventory items; || We tested the ageing reports used by management for correctness of ageing; |
| For inventory aged greater than one year or items due for expiry in the near future management applies a percentage-based provision to inventory. The percentages are derived from historical levels of write down and forward- looking estimates based on assessment of expected utilization of production capacity considering the current market conditions; || We challenged the reasonableness of the assumptions used by the management relating to expected utilization of production capacity in the near future. We also challenged Managements' analysis of the possible impact of the Covid-19 pandemic on offtake plans of the Company's customers and Management's conclusions regarding the impact on the carrying values of specific inventory items; and |
| Management performs a line-by-line analysis of remaining inventory to ensure it is stated at lower of cost and net realizable value and a specific write down is recognized if management determines that the stock exceeds future requirements; and || We performed retrospective reviews of provisions made historically to assess the reasonableness of provisions made during the year. |
| Management has also performed an analysis of the possible impact of the Covid-19 pandemic on offtake plans of its key customers and the consequent requirement to establish provisions for certain inventory items due to either possible obsolescence or reduction in net realizable value. || |
The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon.
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 in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.
Management's and Board of Directors' Responsibility for the Financial Statements
The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these financial statementsthat give a true and fair view of the state of affairs profit /loss and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring accuracy and completeness of the accounting records relevant tothe preparation and presentation of the financial statements that give a true and fairview and are free from material misstatement whether due to fraud or error.
In preparing the financial statements the Management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company's financialreporting process.
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 financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
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 adequate internal financial controls with reference to 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 in the financial statements made by theManagement and Board of Directors.
Conclude on the appropriateness of the Management and Board of Directors use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
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 ourauditors' 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 the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.
2. (A) As required by Section 143(3) of the Act we report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
c) The balance sheet the statement of profit and loss (including other comprehensiveincome) the statement of changes in equity and the statement of cash flows dealt with bythis Report are in agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2021 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 with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".
(B) With respect to the other matters to be included in the Auditors' 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 as at 31 March 2021 onits financial position in its financial statements - Refer Note 35 to the financialstatements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
iv. The disclosures in the financial statements regarding holdings as well as dealingsin specified bank notes during the period from 8 November 2016 to 30 December 2016 havenot been made in these financial statements since they do not pertain to the financialyear ended 31 March 2021.
(C) With respect to the matter to be included in the Auditors' Report under section197(16):
In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.
to the Independent Auditors' report on the financial statements of Tasty Bite EatablesLimited for the year ended 31 March 2021
With reference to the Annexure referred to in paragraph 1 in Report on Other Legal andRegulatory Requirements of the Independent Auditor's Report to the Members of the Companyon the Ind AS financial statements for the year ended 31 March 2021 we report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a regular program of physical verification of its fixed assets bywhich its fixed assets are verified once every year. In our opinion this periodicity ofphysical verification is reasonable having regard to the size of the Company and thenature of its fixed assets. The discrepancies noticed on such verification between thephysical count and the book records were not material and have been properly dealt with inthe books of account.
(c) According to the information and explanations given to us and on the basis ofexamination of the records of the Company the title deeds of the immovable properties areheld in the name of the Company except for the following:
|No. ||31 March 2021 ||31 March 2021 || |
|1 Freehold land Gut No. 503 ||INR 0.03 million ||INR 0.03 million ||The Company has filed a legal suit alleging illegal occupation of the land owned by the Company. |
(ii) The inventory except goods in transit has been physically verified by managementduring the year. The discrepancies noticed on such verification between the physical stockand the book records were not material and have been properly dealt with in the books ofaccount. In our opinion the frequency of such verification is reasonable and adequate inrelation to the size of the Company and the nature of its business. In respect of stockslying with third parties at the year end written confirmations from major parties havebeen obtained.
(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Act. Accordingly paragraph 3(iii) of the Order is not applicable.
(iv) According to the information and explanations given to us the Company has notgranted any loans or provided any guarantees or security to the parties covered underSection 185 of the Act. The Company has complied with the provisions of Section 186 of theAct in respect of investments made or loans or guarantee or security provided to theparties covered under Section 186.
(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits as mentioned in the directives issued by ReserveBank of India and the provisions of Section 73 to 76 or any other relevant provisions ofthe Act and the rules framed thereunder. Accordingly paragraph 3(v) of the Order is notapplicable
(vi) In our opinion and according to the information and explanations given to usmaintenance of cost records under section 148 of the Act is not applicable to the Companyunder the Companies (Cost Record and Audit) Rules 2014.
(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 ofaccount in respect of undisputed statutory dues including provident fund employees stateinsurance income-tax goods and services tax professional tax tax deducted at sourceduty of customs and other material statutory dues have generally been regularly depositedby the Company with the appropriate authorities. As explained to us the Company did nothave any dues on account of duty of excise value added tax sales tax service tax andcess.
According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income-tax Goods andServices Tax Duty of Customs cess and any other statutory dues were in arrears as at 31March 2021 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us there are no dues ofIncome tax Sales-Tax Service tax Goods and Services Tax Duty of Customs which have notbeen deposited by the Company on account of disputes except as disclosed in Enclosure 1to this Annexure.
(viii) According to the information and explanations given to us the Company has notdefaulted in repayment of dues to its bankers. Further the Company has not taken any loanor borrowings from any financial institutions or government and have not issued anydebentures during the year.
(ix) According to the information and explanations given to us the term loans taken bythe Company have been applied for the purpose for which they were taken. The Company hasnot raised money by way of further public offer (including debt instruments) during theyear.
(x) According to the information and explanations given to us no fraud by the Companyor any fraud on the Company by its officers or employees has been noticed or reportedduring the course of our audit.
(xi) According to the information and explanations given to us the managerialremuneration has been paid / provided in accordance with the requisite approvals mandatedby the provisions of Section 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 as per the Act. Accordingly paragraph 3(xii) of the Orderis not applicable.
(xiii) In our opinion and according to the information and explanations given to usall the transactions with related parties are in compliance with sections 177 and 188 ofthe Act and the details as required by the applicable accounting standards have beendisclosed in the financial statements.
(xiv) According to the information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or fully or partiallyconvertible debentures during the year.
(xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with themduring the year.
(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to register under section 45-IA of the Reserve Bank of India Act1934.
|Name of the statute ||Nature of the dues ||Period to which the amount relates (Financial year) ||Gross amount (INR million) ||Amount paid under protest (INR million) ||Amount unpaid (INR million) ||Forum where dispute is pending |
|The Income Tax Act 1961 ||Income Tax ||2007 - 2008 ||10.77 ||5.08 ||5.69 ||The Income Tax Appellate Tribunal Pune |
|The Income Tax Act 1961 ||Income Tax ||2013 - 2014 ||29.64 ||- ||29.64 ||The Income Tax Appellate Tribunal Pune |
|Customs Act 1962 ||Customs Duty ||2013 - 2014 and 2014 - 2015 ||26.50 ||11.73 ||14.77 ||The Customs Excise and Service Tax Appellate Tribunal Mumbai |
to the Independent Auditors' report on the financial statements of Tasty Bite EatablesLimited for the year ended 31 March 2021
Report on the internal financial controls with reference to the aforesaid financialstatements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013
(Referred to in paragraph 2(f) under Report on Other Legal and RegulatoryRequirements' section of our report of even date)
We have audited the internal financial controls with reference to financial statementsof Tasty Bite Eatables Limited ("the Company") as of 31 March 2021 inconjunction with our audit of the financial statements of the Company for the year endedon that date.
In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 March 2021 based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the "Guidance Note").
Management's Responsibility for Internal Financial Controls
The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct 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 Companies Act 2013 (hereinafter referred to as"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 and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing 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 judgement 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 withreference to financial statements.
Meaning of Internal Financial controls with Reference to Financial Statements
A company's internal financial controls 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 controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.
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.
For B S R & Associates LLP
Firm's Registration No.116231W/W-100024
(Membership No. 101190)
Date: 15 May 2021