To the Members of Tasty Dairy Specialities Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone Ind AS Financial Statementsof Tasty Dairy Specialities Limited ("the Company") which comprise the BalanceSheet as at 31st March 2021 and the statement of Profit and Loss (including othercomprehensive income) Statement of Changes in Equity and statement of Cash Flows for theyear then ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information. hereinafter referred to as"Standalone Financial Statements".
In our opinion and to the best of our information and according to theexplanations given to us except for the effects of the matter described in the basis forqualified opinion paragraph below the aforesaid Standalone Ind AS financial Statementsgive the information required by the Companies Act2013 ("the Act") in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs (financial position) ofthe Company as at March31st 2021 and total comprehensive loss (comprising of loss andother comprehensive loss) its cash flows and the changes in equity for the year on thatdate ended.
Basis for Qualified Opinion
1. As stated in the Note no. 33 of the Statements regarding impact ofCOVID-19 pandemic:
(i) No physical verification has been carried out by the management atthe end of the year or thereafter to ascertain the physical quantity and quality ofinventory. Therefore quantity and value of stock and adequacy of loss estimated andprovided in respect thereof of Rs.205.10 Lacs by the management could not be verified andcommented upon by us.
(ii) Regarding sale / disposal of stock as scrap which was not foundfit for human consumption and resulted in loss of Rs.1694.94 Lacs the assessment of suchstock was done by the management in our absence hence we are unable to comment on suchimpairment and resultant loss on its sale.
Our Report is modified in respect of above matters.
We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theCompanies Act 2013. Our responsibilities under those Standards are further described inthe Auditor's Responsibilities for the Audit of the standalone Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theindependence requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Companies Act 2013 and the Rules there under andwe have fulfilled our other ethical responsibilities in accordance with these requirementsand the Code ICAI of Ethics. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion on the standalone FinancialStatements except as stated above.
We draw your attention to Note No.33 to the financial statement whichdescribes the Management's assessment of the impact of COVID -19 pandemic and theresultant lock-down on the significant uncertainties involved in preparing the financialstatements. Based on the information available on this date Management believes that nofurther adjustments are required to the financial statement. However in view of veryuncertain economic environment a definitive assessment of the impact is highly dependentupon circumstances as they evolve in future and actual results may differ from thoseestimated as at the date of approval of these financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.
Description of Key Audit Matters
|The key audit matters ||How our audit addressed the Key Audit Matter |
|MAT Credit Entitlement || |
|The company has recognized MAT credit entitlement. || |
|The recoverability of this MAT credit entitlement is dependent upon the generation of sufficient future taxable profit to utilize such entitlement within the stipulated period prescribed under the income tax act 1961. ||We have assessed the management's judgment relating to the forecasts of future revenue taxable profit and evaluated the reasonableness of the considerations/ assumptions underlying the preparation of these forecasts. |
|We identified this as a key audit matter because significant judgment is required in forecasting future taxable profits for recognition of MAT credit entitlement. ||Based on the above procedures performed the recognition and measurement of MAT credit entitlement are considered adequate and reasonable. |
|Receivables and provision for their recoverability; || |
|As stated in note no.33 of the Statement there are increase in receivables on account of accumulation of stocks with the dealers and distributors and withholding of payments by the customers. The company has made provision of Rs. 487.63 Lacs for the expected credit loss and doubtful receivables from customers. ||Principal Audit Procedures |
|We considered the recoverability of such receivables a key audit matter given the relative size of receivables in the Statement and significant judgment involved in consideration of factors such as ability of the customers to repay the dues of the company in view of impact of the Pandemic and other economic and logistic conditions. ||We understood and tested the design and operating effectiveness of controls as established by the Company for realization of its debtors. |
| ||We considered various factors such as past operations and conduct of account of the customers future recoveries in the accounts and management's assessment of expected loss based on their follow up with the customers and the confirmations obtained from them. |
| ||Based on the above procedures performed the management's estimate of loss for doubtful debts and its provision in the books of accounts is considered reasonable. |
The Company's Board of Directors are responsible for the otherinformation. The other information comprises the information included in theCompany's annual report but does not include the financial statements and ourauditors' report thereon. The Company's annual report is expected to be madeavailable to us after the date of this auditor's report.
Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information identified above when it becomesavailable and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. When we read the Company'sannual report if we conclude that there is a material misstatement therein we willcommunicate the matter to those charged with governance.
Responsibility of Management for Standalone Financial Statements
The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these standalone Ind AS financial statements that give a true and fairview of the State of affairs (financial position)profit or loss(financial performanceincluding other comprehensive income)changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS ) specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments 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 the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing thecompany's financial reporting process.
Auditor's Responsibilities for the Audit of the FinancialStatements
Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Companies Act 2013 we are also responsible for expressing ouropinion on whether the company has adequate internal financial controls with reference tofinancial statements in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of thegoing 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'sreport to the 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 conditionsmay cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regardingamong other matters the planned scope and timing of the audit and significant auditfindings including any significant deficiencies in internal control that we identifyduring our audit.
We also provide those charged with governance with a statementthat we have complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged withgovernance we determine those matters that were of most significance in the audit of thefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of
India in terms of sub-section (11) of section 143 of the Companies Act2013 we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
2. With respect to the other matters to be included in theAuditor's Report in accordance with the Requirements of section 197(16) of the Actas amended in our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197
3.As required by Section 143(3) of the Act we report that:
(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
(b) Except for the effects of the matter describes in the basis for theQualified Opinion paragraph above In our opinion proper books of account as required bylaw have been kept by the Company so far as it appears from our examination of thosebooks.
(c) The Balance Sheet the Statement of Profit and Loss(including othercomprehensive loss)the Statement of changes in Equity and Cash Flow Statement dealt withby this Report are in agreement with the books of account.
(d) Except for the effects of the matter describes in the basis for theQualified Opinion paragraph above In our opinion the aforesaid standalone financialstatements comply with the Accounting Standards specified under Section 133 of the Act.
(e) The qualification relating to the maintenance of accounts and othermatters connected therewith are as stated in the Basis for qualified opinion paragraphabove.
(f) On the basis of the written representations received from thedirectors as on 31st March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2021 from being appointed as a director interms of Section 164 (2) of the Act.
(g) With respect to the adequacy of the internal financial controlswith reference to financial statements of the company and the operating effectiveness ofsuch controls refer to our separate Report in "Annexure B".
(h) With respect to the other matters to be included in theAuditor's Report in accordance with rule 11 of the companies (Audit and Auditors)Rule 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 would impactits financial position
ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses
iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company.
| ||For ATUL GARG & ASSOCIATES |
| ||CHARTERED ACCOUNTANTS |
| ||FIRM REG. NO. 01544C |
| ||(ATUL GARG) |
|Place: Kanpur ||Partner |
|Date:14.07.2021 ||M.NO. 070757 |
|UDIN:-21070757AAAAHS7697 || |
ANNEXURE A' TO THE INDEPENDENT AUDITORS' REPORT
Re. TASTY DAIRY SPECIALITIES LIMITED
1. In respect of its Fixed Assets:
(a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.
(b) Major fixed assets have been physically verified by the managementat reasonable intervals. In our opinion the frequency of such verification is reasonableand to the best of our knowledge no material discrepancies have been noticed on suchverification.
(c) According to the information and explanation given to us and on thebasis of our examination of the records of the Company the title deeds of the immovableproperties are held in the name of the Company.
2. The inventory has been physically verified during the year by themanagement at reasonable interval during the year. In our opinion the frequency ofverification is reasonable except that year end physical verification of inventory is notdone.
3. According to the information and explanation given to us thecompany has granted loan to a company listed in register maintained under Section 189 ofthe Act.
a) In our opinion the rate of interest and other terms and conditionson which the loan had been granted to the company listed in the Register maintained underSection 189 of the Act were not prima facie prejudicial to the interest of the Company.
b) In case of the loan granted to the company listed in the Registermaintained under Section 189 of the Act the Borrower is regular in payment of interest.There is no stipulation as regards to repayment of the loan.
c) There are no overdue amounts in respect of loans granted to companylisted in the Register maintained under Section 189 of the Act.
4. In our opinion and according to information and explanation given tous the Company has in respect of loans investments guarantees and security compliedwith the provisions of section 185 & 186 of The Companies Act 2013 as applicable.
5. Based on our scrutiny of the company's records and according tothe information and explanations provided by the management in our opinion the companyhas not accepted any loans or deposits from the public within the meaning of sections 73to 76 or any other relevant provisions of The Companies Act 2013 and which aredeposits' within the meaning of rule 2(b) of the Companies (Acceptance ofDeposits) Rules 2014.
6. According to the information and explanations given to us we are ofthe opinion that prima facie the cost records prescribed by the Central Government undersection 148(1) of the Act have been made and maintained.
7. (a) According to the information and explanation given to us and onthe basis of our examination of the records of the company amounts deducted/accrued inthe books of accounts in respect of undisputed statutory dues including provident fundemployees' state insurance income tax sales tax Goods and Service Tax customduty cess and any other material statutory dues have been regularly deposited during theyear by the Company with the appropriate authorities.
According to the information and explanation given to us no undisputeddemand payable in respect of provident fund employees' state insurance income taxsales tax Goods and Service Tax custom duty cess and any other material statutory dueswere in arrear as at 31 March 2021 for a period of more than six months from the date theybecame payable.
(b) The disputed statutory dues that have not been deposited on accountof disputed matters pending before Income Tax authorities are as under:
|Sl. No. ||Name of Statue ||Nature of Dues ||Amount (Rs.in Lacs) ||Period to which the amount relates ||Forum where dispute is Pending |
|.1 ||Income Tax Act 1961 ||Income Tax ||0.10 ||2016-17 ||Deputy Commissioner of Income Tax |
8. Based on our audit procedures and on information and explanationsgiven by the management we are of the opinion that the company has not defaulted inrepayment of loans or borrowings to any financial institution and banks. According torecords of the company the company has not issued debentures; hence the question ofreporting on payment of dues to debenture holders does not arise.
9. The Company has not raised any money by public issue during theperiod covered by our Audit Report. In our opinion and according to the information andexplanation given to us the Company has utilized the money raised by way of term loansduring the year for the purpose for which they were raised.
10. According to the information and explanations given to us neitherfraud on the company by its officers or employees nor any fraud by the company has beennoticed or reported during the course of our audit.
11. According to the information and explanations given to us and basedon our examination of the records of the Company the Company has paid/provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to The Companies Act2013.
12. In our opinion and according to the information and explanationgiven to us the Company is not a Nidhi Company.
13. According to the information and explanations given to us and basedon our examination of the records of the Company transactions with the related partiesare in compliance with Sections 177 and 188 of the Act where applicable and details ofsuch transactions have been disclosed in the financial statements as required by theapplicable accounting standard.
14. According to the information and explanation given to us and basedon our examination of the records of the Company the Company has not made anypreferential allotment and private placement of shares or fully or partly convertibledebentures during the year. Hence the requirement on reporting under Para 3(xiv) is notapplicable.
15. According to the information and explanation given to us and basedon our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with him. Hence the requirementon reporting under Para 3(xv) is not applicable.
16. According to the information and explanation given to us and basedon our examination of the records of the Company the Company is not required to beregistered under Section 45-IA of the Reserve Bank of India Act 1934.
| ||For ATUL GARG & ASSOCIATES |
| ||CHARTERED ACCOUNTANTS |
| ||FIRM REG. No. 01544C |
| ||(ATUL GARG) |
|PLACE: KANPUR ||PARTNER |
|DATED:14.07.2021 ||M. No. 70757 |
ANNEXURE B' TO THE INDEPENDENT AUDITORS' REPORT
Re. TASTY DAIRY SPECIALITIES LIMITED
Report on the Internal Financial Controls over financial reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013
We have audited the internal financial controls over financialreporting of TASTY DAIRY SPECIALITIES LIMITED ("the Company") as of 31stMarch 2021 in conjunction with our audit of the standalone financial statements of theCompany for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal controls stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India. 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 safeguardingof its 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.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.
We believe that the audit evidence which we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting 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 overfinancial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.
Inherent Limitations of Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls overfinancial reporting 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 overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2021 basedon the internal financial controls over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.
| ||For ATUL GARG & ASSOCIATES |
| ||CHARTERED ACCOUNTANTS |
| ||FIRM REG. No.01544C |
| ||(ATUL GARG) |
|PLACE: KANPUR ||PARTNER |
|DATED: 14.07.2021 ||M.No.070757 |