Mar 31, 2018
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Milkfood Limited (âthe Company''), which comprise the balance sheet as at 31 March 2018, the statement of profit and loss and the cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015, as amended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules 2015. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance 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 the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2018 and its profit, total comprehensive income, the changes in equity and its cash flows for the year ended on that date.
Emphasis of Matter
Attention is drawn to the Note No. 3(v) regarding classification/depreciation on Casien plant, Note No (6)(i) & (ii) regarding trade receivables, Note No. 7(i) regarding security deposit, Note 7(ii) & 10(i) regarding amount due from employees, Note No 9(i) regarding non moving stock, Note No 13(i) regarding advance to suppliers, Note No 13(iii) regarding classification of CERs, Note No. 17(i) regarding classification of security deposit from suppliers.
Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure Aâ, a statement on the matters specified in the paragraph 3 and 4 of the 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 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 books of account;
(d) in our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015;
(e) on the basis of the written representations received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 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 âAnnexure Bâ; and
(g) 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, 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 did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There were no amounts which were required to be transferred, to the Investor Education and Protection Fund by the Company.
Annexure - A to the Auditorsâ Report
The Annexure referred to in Independent Auditors'' Report to the members of the Company on the standalone financial statementsfor the year ended 31 March 2018, we report that:
(i) In respect of fixed assets:
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a programme of verification of fixed assets to cover all the items in a phased manner over a period of three years, which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the said programme, certain fixed assets were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company and certificate provided by the bank, the title deeds of immovable properties are held in the name of the Company. Original copy of title deed has not been produced as the same is deposited as security with bank under loan agreement as confirmed by the management & Bank.
(ii) In respect of its inventories:
(a) As explained to us, inventories have been physically verified during the year by the Management at reasonable intervals, other than stock lying with third parties where certificates confirming physical inventory have been received.
(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.
(iii) The Company has not granted loans to parties covered in the register maintained under section 189 of the Companies Act, 2013 (âthe Act''). Thus, paragraph 3(iii) of the Order is not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us, the Company has not given any loans and made any investment within the meaning of section 185 & 186 of the Act. Thus, paragraph 3(iii) of the Order is not applicable to the Company.
(v) According to the information and explanation given to us, the company has not accepted any deposits during the year. Company is of the view that provision of Section 74(1)(b) of the Act are complied with in pursuance of Rule 19 of the Acceptance of Deposits Rules, 2014. It is also confirmed by the company that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal.
(vi) According to the information and explanations given to us and on the basis of our review of the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2014 prescribed by the Central Government under Section 148(1) of the Companies Act, 2013 we are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.
(vii) In respect of statutory dues:
(a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the company has generally been regular in depositing undisputed statutory dues, including provident Fund, Employees State insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues applicable to it with the appropriate authorities. There were no undisputed amounts payable in respect of the aforesaid statutory dues in arrears as at 31.03.2018 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 of income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess which have not been deposited as at 31.03.2018 on account of any dispute except as follows:
Sr. No. |
Name of Statute |
Nature of Dues |
Amount Rs/lacs |
Forum where dispute is pending |
1 |
U.P. Vat Act, 2008 |
Regular demand for Assessment year 2015-16 |
3.83 |
Before Addl. Commissioner (Appeals), Moradabad. |
2 |
U.P. Vat Act, 2008 |
Regular demand for Assessment year 2016-17 |
13.50 |
Before Addl. Commissioner (Appeals), Moradabad. |
(viii) According to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowing to a financial institution, bank, Government during the year.
(ix) In our opinion and according to the information and explanation given to us, the term loans have been applied by the company during the year for the purposes for which they were obtained.
(x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.
(xi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not paid/provided any managerial remuneration within the meaning of section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
Annexure - B to the Auditorsâ Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Milkfood Limited (âthe Companyâ) as of 31 March2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (âICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and ifsuch controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness.
Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
for V. P. Jain & Associates
Chartered Accountants
Firm''s registration number: 015260N
Swati Madaan
Place : New Delhi Partner
Date : 25th May 2018 Membership number: 521697
Mar 31, 2016
TO THE MEMBERS OF MILKFOOD LIMITED Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Milkfood Limited (âthe Company''), which comprise the balance sheet as at 31 March 2016, the statement of profit and loss and the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance 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 the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2016 and its profit and its cash flows for the year ended on that date.
Emphasis of Matter
Attention is drawn to the Note No.5.1 regarding classification of security deposits from suppliers, Note No 5.2 regarding security deposits from consignees/Advance from customers, Note No. 11.1 regarding impairment of assets, Note No. 11.4 regarding life of assets, Note No. 13.1 & 18.1 regarding amount due from employees/others, Note No. 14.3 regarding unamortized expenses, Note 15.1 regarding valuation of CER, Note No. 15.2 regarding cost incurred on Tree & Plantation in earlier year and reclassification, Note No. 18.2 regarding Carbon credit receivable, Note No. 21A regarding exceptional items, Note No. 23.1 (c) regarding salary to related party, Note No. 23.1(d) & 26.2(a) regarding reimbursement of medical/other expenses to Ex - MD and Note No. 26.2(b) regarding Carbon credit written off. Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure Aâ, a statement on the matters specified in the paragraph 3 and 4 of the 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 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 and the cash flow statement dealt with by this Report are in agreement with the books of account;
(d) in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards 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 31 March 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2016 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 âAnnexure Bâ; and
(g) 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, 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 did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There were no amounts which were required to be transferred, to the Investor Education and Protection Fund by the Company.
The Annexure referred to in Independent Auditors'' Report to the members of the Company on the standalone financial statements for the year ended 31 March 2016, we report that:
(i) In respect of fixed assets:
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a programme of verification of fixed assets to cover all the items in a phased manner over a period of three years, which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the said programme, certain fixed assets were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company and certificate provided by the bank, the title deeds of immovable properties are held in the name of the Company. Original copy of title deed has not been produced as the same is deposited as security with bank under loan agreement as confirmed by the management & Bank.
(ii) In respect of its inventories:
(a) As explained to us, inventories have been physically verified during the year by the Management at reasonable intervals, other than stock lying with third parties where certificates confirming physical inventory have been received.
(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.
(iii) The Company has not granted loans to parties covered in the register maintained under section 189 of the Companies Act, 2013 (âthe Act''). Thus, paragraph 3(iii) of the Order is not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us, the Company has not given any loans and made any investment within the meaning of section 185 & 186 of the Act. Thus, paragraph 3(iii) of the Order is not applicable to the Company.
(v) According to the information and explanation given to us, the company has not accepted any deposits during the year. Company is of the view that provision of Section 74(1)(b) of the Act are complied with in pursuance of Rule 19 of the Acceptance of Deposits Rules, 2014. It is also confirmed by the company that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal.
(vi) According to the information and explanations given to us and on the basis of our review of the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2014 prescribed by the Central Government under Section 148(1) of the Companies Act, 2013 we are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.
(vii) In respect of statutory dues:
(a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the company has generally been regular in depositing undisputed statutory dues, including provident Fund, Employees State insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues applicable to it with the appropriate authorities. There were no undisputed amounts payable in respect of the aforesaid statutory dues in arrears as at 31.03.2016 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 of income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess which have not been deposited as at 31.03.2016 on account of any dispute except as follows:
Sr. No. |
Name of Statute |
Nature of Dues |
Amount Rs/lacs |
Forum where dispute is pending |
1 |
Delhi Sales Tax Act, 1975 |
Regular demand 1983-84 |
12.22 |
Appeal before sales Tax Appellate Tribunal, Delhi |
Sr. No. |
Name of Statute |
Nature of Dues |
Amount Rs/lacs |
Forum where dispute is pending |
2 |
Income Tax Act, 1961 |
Regular demand for Assessment year 2008-09 |
5.08 |
Before ITAT-Delhi |
3 |
U.P. Vat Act, 2008 |
Regular demand for Assessment year 2010-11 |
4.03 |
Before Addl. Commissioner (Appeals), Moradabad. |
4 |
U.P. Vat Act, 2008 |
Regular demand for Assessment year 2011-12 |
1.05 |
Before Addl. Commissioner (Appeals), Moradabad. |
5 |
U.P. Vat Act, 2008 |
Regular demand for Assessment year 2012-13 |
1.92 |
Before Addl. Commissioner (Appeals), Moradabad. |
6 |
U.P. Vat Act, 2008 |
Regular demand for Assessment year 2013-14 |
1.30 |
Before Addl. Commissioner (Appeals), Moradabad. |
(viii)According to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowing to a financial institution, bank, Government during the year.
(ix) In our opinion and according to the information and explanation given to us, the term loans have been applied by the company during the year for the purposes for which they were obtained.
(x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.
(xi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not paid/provided any managerial remuneration within the meaning of section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
(xiii)According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
(xiv)According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
(xvi)The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Milkfood Limited (âthe Companyâ) as of 31 March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (âICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness.
Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
f or Madan & Associates
Chartered Accountants
Firm''s registration number: 0185N
M. K. Madan
Place: New Delhi Proprietor
Date: 30th May 2016 Membership number: 082214
Mar 31, 2015
We have audited the accompanying financial statements of MILKFOOD
LIMITED ("the Company"), which comprise the Balance Sheet as at 31
March, 2015, the Statement of Profit and Loss, the Cash Flow Statement
for the year then ended, and a summary of the 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 Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these financial statements that give a true and
fair view of the financial position, financial performance and cash
flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder.
We conducted our audit in accordance 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 the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the financial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India.
Emphasis of Matter not amounting to qualification
Attention is drawn to the Note No.5 (1) regarding classification of
security deposits from suppliers; 5 (2a) & (2b) regarding security
deposits from consignees/Advance from customers. Note No. 11(A)(i)
regarding impairment of assets. Note no. 19 (1) regarding amount due
from employees/others. Note no. 19 (2) regarding amount due from
promoters. Note no. 19 (3) regarding Carbon credit receivable. Our
opinion is not qualified in respect of these matters.
(a) In case of balance sheet, of the state of affairs of the company as
at 31st March 2015.
(b) In the case of statement of profit & loss, of the reported profit
of the company for the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows of the
company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order"), issued by the Central Government in terms of sub-section (11)
of Section 143 of the Act, we give in the Annexure a statement on the
matters specified in paragraphs 3 and 4 of the 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 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, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards 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 31 March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March, 2015
from being appointed as a director in terms of Section 164(2) of the
Act.
(f) 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, 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 by way of contingent
liability.
ii. The company did not have any long term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There were no amounts which were required to be transferred to the
investor education and protection fund by the company.
Annexure to the Auditor's Report
(Referred to in paragraph 1 under 'Report on Other Legal & Regulatory
Requirements' section of our report of even date)
(i) In respect of its Fixed Assets :
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets.
(b) The Company has a programme of verification of fixed assets to
cover all the items in a phased manner over a period of three years,
which, in our opinion, is reasonable having regard to the size of the
company and the nature of its assets. Pursuant to the said programme,
certain fixed assets were physically verified by the Management during
the year. According to the information and explanations given to us, no
material discrepancies were noticed on such verification.
(ii) In respect of its inventories:
(a) As explained to us, inventories have been physically verified
during the year by the Management at reasonable intervals, other than
stock lying with third parties where certificates confirming physical
inventory have been received.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.
(iii) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 189 of the Act,
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services, During the course of our audit we have not observed any
continuing failure to correct major weaknesses in such internal control
system except that internal control procedures in the case of advances
need to be strengthened. At the yearend an amount of Rs 1.45 Cr is
outstanding for a period exceeding twelve months. These interest free
advances to staff/others are certified by the management and good for
recovery.
(v) According to the information and explanation given to us, the
company has not accepted any deposits during the year. Company is of
the view that provision of Section 74(1)(b) of the Act are complied
with in pursuance of Rule 19 of the Acceptance of Deposits Rules, 2014.
It is also confirmed by the company that no order has been passed by
the Company Law Board/ RBI or any other authority.
(i) It is informed by the Company that it is not required to maintain
the cost records in terms of section 148 of the Companies Act, 2013.
(ii) According to the information and explanation given to us in
respect of statutory dues;
(a) The company has generally been regular in depositing undisputed
statutory dues, including provident Fund, Employees State insurance,
income tax, sales tax, wealth tax, service tax, duty of customs, duty
of excise, value added tax, cess and other material statutory dues
applicable to it with the appropriate authorities. There were no
undisputed amounts payable in respect of the aforesaid statutory dues
in arrears as at 31.03.2015 for a period of more than six months from
the date they became payable.
(b) There were no dues of income tax, sales tax, wealth tax, service
tax, duty of customs, duty of excise, value added tax, cess which have
not been deposited as at 31.03.2015 on account of any dispute except as
follows:
Sl. Name of Statute Nature of Dues Amount
No. Rs./Lacs
1 Delhi Sales Act, 1975 Stock Transfer etc. 1.86
1984-85
2 Delhi sales Act, 1975 Regular demand 1983-84 11.36
3 Income Tax Act, 1961 Regular demand for 5.08
Assessment year 2008-09
4 Income Tax Act, 1961 Regular demand for 2.17
Assessment year 2007-08
5 U.P Vat Act, 2008 Regular demand for 4.03
Assessment year 2010-11
Sl. Name of Statute Forum where dispute
No. is pending
1 Delhi Sales Act, 1975 Appeal before sales Tax Appellate
Tribunal, Delhi
2 Delhi sales Act, 1975 Appeal before sales Tax Appellate
Tribunal, Delhi
3 Income Tax Act, 1961 Before ITAT-Delhi
4 Income Tax Act, 1961 Application u/s 154 for rectification
before Assessing officer.
5 U.P Vat Act, 2008 Before Addl. Commissioner
(Appeals), Moradabad.
Information is provided by the Management. The relevant confirmations
from the advocates are awaited.
(c) There are no amounts that are due to be transferred to the investor
education and protection fund by the company in accordance with the
relevant provisions of the Companies Act, 1956 ( 1 of 1956 ) and Rules
made there under.
(iii) The company does not have any accumulated losses at the end of
the financial year and has not incurred cash losses during the
financial year covered by our audit and the immediately preceding
financial year.
(iv) In our opinion and according to the information and explanation
given to us, the company has not defaulted in the repayment of dues to
financial institutions and banks. The company has not issued any
debentures.
(v) Company has given guarantee of Rs. 400 Lakhs in respect of Loans
taken by the Body Corporate (Supplier of Milk to the company) for the
loan taken by the latter from the bank. In our opinion, the terms and
conditions are not prejudicial to the interest of the company.
(vi) In our opinion and according to the information and explanation
given to us, the term loans have been applied by the company during the
year for the purposes for which they were obtained.
(vii) To the best of our knowledge and according to the information and
explanation given to us, no fraud by the company and no material fraud
on the company has been noticed or reported during the year.
For MADAN & ASSOCIATES
Chartered Accountants
(FRN : 000185N)
(M K Madan)
Place of Signature : Delhi (Proprietor)
Date : 30.05.2015 (MN: 082214)
Mar 31, 2014
We have audited the accompanying financial statements of Milkfood
Limited, which comprise the Balance Sheet as at March 31,2014, and the
Statement of Profit and Loss and Cash Flow Statement for the year then
ended, and a summary of significant accounting policies and other
explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act"). and in accordance with the
accounting principles generally accepted in India. This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the company''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanation given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India.
Emphasis of Matter, not amounting to qualification.
Attention is drawn to the Note No.5.2(i) regarding classification of
trade payables, Note No. 9(7) regarding advances received from
Customers, Note No.11 A 1(i) regarding impairment of assets, Note
No.11A 2 regarding reversal of depreciation, Note No.13 1, Note No.19 1
(i&ii) regarding amount due from promoters/suppliers, Note No.19 2
regarding Carbon credit receivable, Note No.21 3 (i&ii) regarding
exceptional items and extra ordinary income, Note No.23 (a) regarding
provision of gratuity and Leave encashment. Our opinion is not
qualified in respect of these matters.
(a) in case of the balance Sheet, of the state of affairs of the
company as at 31st March,2014
(b) in the case of the Statement of Profit and Loss, of the reported
profit of the Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003("the
Order") issued by the Central Government in terms of Section 227(4A) of
the Act, we give in the Annexure a statement on the matters specified
in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
(a) We have 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 and the Cash
Flow Statement dealt with by this report are in agreement with the
books of account.
(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
referred to in Section 211(3C) of the Act.
(e) On the basis of the written representations received from the
directors as on 31 March, 2014 taken on record by the Board of
Directors, none of the directors is disqualified as on 31March, 2014
from being appointed as a director in terms of Section 274(1)(g) of the
Act.
Annexure to Auditors'' Report
Referred to in paragraph 1 of our report of even date to the members of
Milkfood Limited on the accounts as at and for the year ended March
31,2014.
1. (a) The company has maintained Fixed Assets Register containing
quantitative details/location of the Assets.
(b) The fixed assets are physically verified by the management
according to a phased programme designed to cover all the items over a
period of two years, which in our opinion, is reasonable having regard
to the size of the company and the nature of its assets. It has been
certified by the plant heads that physical verification has been done
and there are no significant discrepancies between book records and
physical verification.
(c) In our opinion and according to the information and explanations
given to us, substantial part of fixed assets has not been disposed of
by the company during the year.
2. (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
(c) on the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
3. The company has not taken /granted loans to parties covered in the
register maintained under section 301 of the Companies Act, 1956.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to purchase of inventory, fixed assets and sale of
goods. Further, on the basis of our examination of the books and
records of the company and according to the information and
explanations given to us, we have neither come across, nor have been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control procedures and adjustments thereof except
that internal control procedures in the case of advances need to be
strengthened. At the year end an amount of Rs. 1.63 crore is
outstanding for a period exceeding twelve months. These interest free
advances to staff are certified by the management and good for
recoverey.
5. In our opinion and according to explanations given to us and as
certified the transactions that need to be entered into the register
maintained under section 301 have been so entered.
6. In our opinion and according to the information and explanations
given to us, the transactions of purchases/ sales made with the parties
in pursuance of contracts or arrangements entered in the registers
maintained under section 301 and exceeding the value of five lakh
rupees in respect of any party during the year, have been made at
prices which are reasonable having regard to prevailing market prices
at the relevant time.
7. In our opinion and according to the information and explanations
given to us and read with Note (4.4) of Note.4 the company has complied
with the directives issued by the RBI and provisions of sections 58 A
and 58 AA of the Companies Act, 1956 and the rules framed thereunder
with regard to the deposits accepted from the public. According to
information and explanations given to us no order has been passed by
the National Company Law Tribunal or Company Law Board or RBI or any
Court or any other Tribunal relevant to sections 58A, 58AA or the other
relevant provisions of the Act.
8. Company has appointed external firm of Chartered Accountants to
carry out the internal audit. In our opinion, internal audit is
commensurate with the size and nature of its business.
9. We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies (Cost Accounting records) Rules, 2011
prescribed by the Central Government under Section 209(1)(d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. However we have not made
a detailed examination of cost records.
10. (a) According to the records of the company, the company is
generally regular in depositing with appropriate authorities undisputed
statutory dues including provident fund, investor education &
protection fund, employees'' state insurance, income-tax, sales-tax,
wealth tax, customs duty, excise-duty, service tax, cess and other
statutory dues applicable to it with the appropriate authorities except
service tax of Rs 1.25 lacs which has since been deposited.
(b) According to the information and explanations given to us and the
records of the company examined by us, the particulars of major dues of
sales-tax, income-tax, customs duty, wealth tax, excise duty and cess
as at March 31, 2014 which have not been deposited on account of a
dispute, are as follows:-
Sl. Name of Statute Nature of Dues Amount
No. Rs./Lacs
1 Delhi Sales Tax Act, 1975 Stock Transfer etc.1984-85 1.86
2 Income Tax act, 1961 Regular Demand under 16.17
section 147/143 (3),
2006-07
3 Income Tax Act 1961 Regular Demand u/s 143 (3) 5.08
A.Y. 2008-09
4. Income Tax act, 1961 Regular Demand for 2.17
Assessment Year 2007-08
5 U.P. Vat Act 2008 Regular Demand for 5.68
Assessment Year 2009-10
6 U.P. Vat Act 2008 Regular Demand for 4.03
Assessment Year 2010-11
Sl. Name of Statute Forum where dispute
No. is pending
1 Delhi Sales Tax Act, 1975 Appeal before Sales Tax
Appellate Tribunal, Delhi.
2 Income Tax act, 1961 Before CIT (Appeals) Delhi
3 Income Tax Act 1961 Before ITAT-Delhi
4. Income Tax act, 1961 Application U/S 154 for
rectification before Assessing
officer.
5 U.P. Vat Act 2008 Before Addl. Commissioner
(Appeals), Moradabad.
6 U.P. Vat Act 2008 Before Addl. Commissioner
(Appeals), Moradabad.
11. The company has NIL accumulated losses as at March 31, 2014 and it
has not incurred any cash losses during the financial year ended on
that date and in the immediately preceding financial year.
12. The company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit fund/
nidhi / mutual benefit fund/ societies are not applicable to the
company.
14. In our opinion, the company is not a dealer or trader in shares,
securities, debentures and other investments.
15. In our opinion, and according to the information and explanations
given to us, the company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
16. In our opinion, and according to the information and explanations
given to us, the company has applied term loans for the purposes for
which the loans were obtained.
17. On overall examination of Balance Sheet, we report that funds
raised on short Term basis, prima facie not been used during the year
for long term investments.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. The company has not issued any debenture during the year,
accordingly, no security has been created.
20. The company has not raised any money by public issues during the
year.
21. During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the company, noticed or reported during the year, nor
have we been informed of such case by the management.
For Madan & Associates,
Chartered Accountants
Firm Registration No 000185N
M.K. MADAN
(Proprietor)
Place: New Delhi Membership Number
Date :9th June'' 2014 FCA 82214
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying fnancial statements of Milkfood
Limited, which comprise the Balance Sheet as at March 31, 2013, and the
Statement of Proft and Loss and Cash Flow Statement for the year then
ended, and a summary of signifcant accounting policies and other
explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these fnancial
statements that give a true and fair view of the fnancial position,
fnancial performance and cash fows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act") and in accordance with the
accounting principles generally accepted in India. This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the fnancial statements
that give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these fnancial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the fnancial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the fnancial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the fnancial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the fnancial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the company''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the fnancial statements. We believe that the audit
evidence we have obtained is suffcient and appropriate to provide a
basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanation given to us, the aforesaid fnancial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India.
Emphasis of matter we draw attention to the Note No.5.1 regarding trade
payables /advances from customers, Note No.11A 2(i) regarding
operations of Casein Plant and impairment of assets, Note No.11A(3)
regarding assets held at Gurgaon, Note No.11A (5) regarding capital
work in progress, Note No.11A 4 (ii) regarding addition to plant and
machinery Note No.12(1) regarding investment, Note No.19 (1 to 4) on
advances, our opinion is not qualifed of these matters Subject to note
no 6(1) regarding provision of gratuity and leave encashment of Rs
242.36 lacs of which Rs 29.56 lacs relate to current year and
Note No 11A 4(i) regarding depreciation of Rs 84.02 lacs.
We further report that had the remarks given by us in above para
regarding non provision of gratuity, leave encashment and depreciation
been considered, Proft of the year would have been Rs.(46.18) Lacs (
against the reported fgure of Rs 67.40 Lacs) the reserve and surplus
would have been Rs.2431.51 Lacs (against the reported fgure of Rs.2758
Lacs).non current liabilities would have been Rs.7707.80Lacs ( as
against reported fgure of Rs.7575.65 Lacs current liabilities would
have been Rs.9733.31 Lacs (as against reported fgure of Rs. 9623.11
Lacs ) and fxed assets would have been Rs. 9279.69 Lacs ( as against
reported fgure of Rs.9363.71 Lacs).
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2013;
(b) in the case of the Statement of Proft and Loss, of the reported
proft of the Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash fows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003("the
Order") issued by the Central Government in terms of Section 227(4A) of
the Act, we give in the Annexure a statement on the matters specifed in
paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
(a) We have 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 except that gratuity and leave encashment are accounted for
on payment basis.
(c) The Balance Sheet, the Statement of Proft and Loss and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the Balance Sheet, the Statement of Proft and Loss
and the Cash Flow Statement comply with the Accounting Standards
referred to in Section 211(3C) of the Act except that gratuity and
leave encashment are accounted for on payment basis.
(e) On the basis of the written representations received from the
directors as on 31 March, 2013 taken on record by the Board of
Directors, none of the directors is disqualifed as on 31March, 2013
from being appointed as a director in terms of Section 274(1)(g) of the
Act.
Referred to in paragraph 1 of our report of even date to the members of
Milkfood Limited on the accounts as at and for the year ended March 31,
2013.
1. (a) The Company has maintained list of fxed assets acquired by it.
However the same is required to be updated substantially with regard to
quantitative detail/location, identifcation etc. in respect of Patiala
unit.
(b) The fxed assets are physically verifed by the management according
to a phased programme designed to cover all the items over a period of
two years, which in our opinion, is reasonable having regard to the
size of the company and the nature of its assets. It has been certifed
by the plant heads that physical verifcation has been done but
reconciliation of the same with book records is in progress. Adjustment
entry if any shall be made on completion of exercise.
(c) In our opinion and according to the information and explanations
given to us, substantial part of fxed assets has not been disposed of
by the company during the year.
2. (a) The inventory has been physically verifed during the year by
the management. In our opinion, the frequency of verifcation is
reasonable.
(b) The procedures of physical verifcation of inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
(c) on the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. The discrepancies noticed on verifcation between the
physical stocks and the book records were not material.
3. The company has not taken /granted loans to parties covered in the
register maintained under section 301 of the Companies Act, 1956.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to purchase of inventory, fxed assets and sale of
goods. Further, on the basis of our examination of the books and
records of the company and according to the information and
explanations given to us, we have neither come across, nor have been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control procedures and adjustments thereof except
that internal control procedures in the case of advances need to be
strengthened.
5. In our opinion and according to explanations given to us and as
certifed the transactions that need to be entered into the register
maintained under section 301 have been so entered.
6. In our opinion and according to the information and explanations
given to us, the transactions of purchases/ sales made with the parties
in pursuance of contracts or arrangements entered in the registers
maintained under section 301 and exceeding the value of fve lakh rupees
in respect of any party during the year, have been made at prices which
are reasonable having regard to prevailing market prices at the
relevant time.
7. In our opinion and according to the information and explanations
given to us and read with Note (5.3) of Note.4 the company has complied
with the directives issued by the RBI and provisions of sections 58A
and 58AA of the Companies Act, 1956 and the rules framed thereunder
with regard to the deposits accepted from the public. According to
information and explanations given to us no order has been passed by
the National Company Law Tribunal or Company Law Board or RBI or any
Court or any other Tribunal relevant to sections 58A, 58AA or the other
relevant provisions of the Act. Excess deposit of Rs 18.89 lacs as on
31.03.2013 have since been refunded as certifed by the management.
8. It has been informed to us that Company has inbuilt mechanism of
internal checks and all the Plants have been visited by Internal
Chartered Accountant to verify the operational systems and for safety
of its Assets and other matters required by the Management. In our
opinion the Internal Audit needs to be further strengthened in terms of
scope, coverage and reporting.
9. We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies (cost Accounting records) Rules, 2011
prescribed by the Central Government under Section 209(1)(d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. However we have not made
a detailed examination of cost records with a view to determine whether
they are accurate or complete.
10. (a) According to the records of the company, the company is
generally regular in depositing with appropriate authorities undisputed
statutory dues including provident fund, investor education &
protection fund, employees'' state insurance, income-tax, sales-tax,
wealth tax, customs duty, excise-duty, service tax, cess and other
statutory dues applicable to it with the appropriate authorities except
service tax of Rs 1.93 lacs for which company has fled an application
with authorities under the Amnesty scheme.
11. The company has NIL accumulated losses as at March 31, 2013 and it
has not incurred any cash losses during the fnancial year ended on that
date and in the immediately preceding fnancial year.
12. The company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit fund/
nidhi / mutual beneft fund/ societies are not applicable to the
company.
14. In our opinion, the company is not a dealer or trader in shares,
securities, debentures and other investments.
15. In our opinion, and according to the information and explanations
given to us, the company has not given any guarantee for loans taken by
others from banks or fnancial institutions during the year.
16. In our opinion, and according to the information and explanations
given to us, the company has applied term loans for the purposes for
which the loans were obtained.
17. On overall examination of Balance Sheet, we report that funds
raised on short term basis, prima facie not been used during the year
for long term investments.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. The company has not issued any debenture during the year,
accordingly, no security has been created.
20. The company has not raised any money by public issues during the
year.
21. During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the company, noticed or reported during the year, nor
have we been informed of such case by the management.
For MADAN & ASSOCIATES,
Chartered Accountants
Reg. No. 000185N
M.K. MADAN
Place: New Delhi (Proprietor)
Date: 30th May, 2013 Membership Number FCA 82214
Mar 31, 2012
1. We have audited the attached Balance Sheet of Milkfood Limited as
at 31st March, 2012 and also the statement of Profit and Loss and the
Cash Flow Statement for the year ended on that date annexed thereto.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We have conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material mis-statement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 issued
by the Central Government of India in terms of sub- section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the annexure referred to above, we
report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit.
(ii) In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of
these books except that gratuity and leave encashment are accounted for
on payment basis.
(iii) The Balance sheet, Profit and loss account and Cash flow
statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the Balance sheet , Profit and loss account and
Cash flow statement dealt with by this report comply with the
accounting standards referred to in sub-section (3 C) of section 211 of
the Companies Act, 1956 except that gratuity and leave encashment are
accounted for on payment basis.
(v) On the basis of written representations received from the directors
as on 31st March 2012 and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on 31st March 2012
from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956.
(vi) In our opinion and to the best of our information and according to
the explanation given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner so required and read
with Note No.5.1 regarding advances from customers, Note No.11 A (1)
regarding Title Deed of Moradabad Land, Note No.11 A (2) (1) regarding
operations of Casein Plant and capitalization of interest and
impairment of assets, Note No.11A(3) regarding assets held at Gurgaon,
Note No.11(B)(1) regarding capital work in progress, Note No.12(1)
regarding investment, regarding Note No.19 (1 to 4) on advances and
subject to note No.6(1) regarding provision of gratuity amounting to
Rs.196.59 lacs of which Rs. NIL relate to current year.
(a) in the case of the Balance sheet, of the state of affairs of the
company as at 31st March 2012;
(b) in the case of the Profit and loss account, of the loss for the
year ended on that date; and
(c) in the case of the Cash flow statement, of the cash flows for the
year ended on that date
give a true and fair view in conformity with the accounting principles
generally accepted in India;
(d) We further report that had the remarks given by us in para (vi)
above regarding non provision of gratuity been considered, the reserve
and surplus would have been Rs.2493.89 lacs (against the reported
figure of Rs.2690.48 Lacs). Non Current Liabilities would have been
Rs.3585.93 lacs (as against reported figure of Rs.3389.34 Lacs).
Annexure to the Auditorsà Report
Referred to in paragraph 3 of our report of even date to the members of
Milkfood Limited on the accounts as at and for the year ended March 31,
2012.
1. (a) The Company has maintained list of fixed assets acquired by it.
However the same is required to be updated
substantially with regard to quantitative detail/location,
identification etc.
(b) The fixed assets are physically verified by the management
according to a phased programme designed to cover all the items over a
period of two years, which in our opinion, is reasonable having regard
to the size of the company and the nature of its assets. It has been
certified by the plant heads that physical verification has been done
but reconciliation of the same with book records is in progress.
Adjustment entry if any shall be made on completion of exercise.
(c) In our opinion and according to the information and explanations
given to us, substantial part of fixed assets has not been disposed of
by the company during the year.
2. (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of
verification is reasonable.
(b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
(c) on the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
3. (a) The company has not taken /granted loans to parties covered in
the register maintained under section 301 of the
Companies Act, 1956.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to purchase of inventory, fixed assets and sale of
goods. Further, on the basis of our examination of the books and
records of the company and according to the information and
explanations given to us, we have neither come across, nor have been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control procedures and adjustments thereof except
that internal control procedures in the case of advances to staff need
to be strengthened.
5. In our opinion and according to explanations given to us and as
certified the transactions that need to be entered into the register
maintained under section 301 have been so entered.
6. In our opinion and according to the information and explanations
given to us, the transactions of purchases/ sales made with the parties
in pursuance of contracts or arrangements entered in the registers
maintained under section 301 and exceeding the value of five lakh
rupees in respect of any party during the year, have been made at
prices which are reasonable having regard to prevailing market prices
at the relevant time.
7. In our opinion and according to the information and explanations
given to us and read with note no.4(5.3) of Note.1 the company has
complied with the directives issued by the RBI and provisions of
sections 58 A and 58 AA of the Companies Act, 1956 and the rules framed
thereunder with regard to the deposits accepted from the public.
According to information and explanations given to us no order has been
passed by the National Company Law Tribunal or Company Law Board or RBI
or any Court or any other Tribunal relevant to sections 58A, 58AA or
the other relevant provisions of the Act.
8. It has been informed to us that Company has inbuilt mechanism of
internal checks and all the Plants have been visited by Internal
Chartered Accountant to verify the operational systems and for safety
of its Assets and other matters required by the Management. In our
opinion the Internal Audit needs to be formalized and further
strengthened in terms of scope, coverage and reporting.
9. We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1)(d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been mainatined. We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
10. (a) According to the records of the company, the company is
generally regular in depositing with appropriate authorities
undisputed statutory dues including provident fund, investor education
& protection fund, employees' state insurance, income-tax, sales-tax,
wealth tax, customs duty, excise-duty, cess and other statutory dues
applicable to it with the appropriate authorities.
(b) According to the information and explanations given to us and the
records of the company examined by us, the particulars of major dues of
sales-tax, income-tax, customs duty, wealth tax, excise duty and cess
as at March 31, 2012 which have not been deposited on account of a
dispute, are as follows:-
Sl. Name of Statute Nature of Dues Amount Forum where dispute is
pending
No. Rs./Lacs
1. Delhi Sales Tax Act, 1975 Penalty under Sales Tax (1982-83) 19.73
Appeal before Delhi High Court
2. Delhi Sales Tax Act, 1975 Disallowance of ST-1 Forms 1983-84 37.02
Appeal before Delhi High Court.
Stock Transfer etc. 1984-85 1.86 Appeal before Sales Tax Appellate
Tribunal, Delhi.
3. Income Tax act, 1961 Regular Demand under section143 (3), 2007-08
8.34 Before CIT (Appeals) Delhi
4. Income Tax Act 1961 Regular Demand u/s 143 (3) A.Y. 2008-09 12.31
Before CIT (Appeals) Delhi
5. U.P. Vat Act Regular Demand for Assessment Year 2008-09 1.29 Before
Addl. Commissioner (Appeals), Moradabad.
6.. Wealth tax Act 1957 Regular Demand for Assessment Year 2006-07 0.84
Before CIT (Appeals)
7. Income Tax act, 1961 Regular Demand for Assessment Year 2007-08 2.17
Application U/S 154 for rectification before
Assessing officer.
11. The company has NIL accumulated losses as at March 31, 2012 and it
has not incurred any cash losses during the financial year ended on
that date and in the immediately preceding financial year.
12. The company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit fund/
nidhi / mutual benefit fund/ societies are not applicable to the
company.
14. In our opinion, the company is not a dealer or trader in shares,
securities, debentures and other investments.
15. In our opinion, and according to the information and explanations
given to us, the company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
16. In our opinion, and according to the information and explanations
given to us, the company has applied term loans for the purposes for
which the loans were obtained.
17. On Global examination of Balance Sheet, in our opinion, no short
term funds raised have been used for long term purposes.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. The company has not issued any debenture during the year,
accordingly, no securities has been created.
20. The company has not raised any money by public issues during the
year.
21. During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the company, noticed or reported during the year, nor
have we been informed of such case by the management.
For MADAN & ASSOCIATES,
Chartered Accountants
Reg. No.: 000185 N
M.K. MADAN
Place : New Delhi (Proprietor)
Dated : 14th August, 2012 Membership No. FCA 82214
Mar 31, 2011
1. We have audited the attached Balance Sheet of Milkfood Limited as
at 31st March, 2011 and also the Profit and Loss Account and the Cash
Flow Statement for the year ended on that date annexed thereto. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We have conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material mis-statement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 issued
by the Central Government of India in terms of sub- section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the annexure referred to above, we
report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit.
(ii) In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of
these books except that gratuity and leave encashment are accounted for
on payment basis.
(iii) The Balance sheet, Profit and loss account and Cash flow
statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the Balance sheet, Profit and loss account and
Cash flow statement dealt with by this report comply with the
accounting standards referred to in sub-section (3 C) of section 211 of
the Companies Act, 1956 except that gratuity and leave encashment are
accounted for on payment basis.
(v) On the basis of written representations received from the directors
as on 31st March 2011 and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on 31st March 2011
from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956.
(vi) In our opinion and to the best of our information and according to
the explanation given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner so required and read
with Note No.3 (Schedule 18 A) regarding depreciation on Fixed Assets.
Note No.7(iii) (Schedule 18 A) regarding accounting of income, Note 12
(Schedule 18 A) regarding Managerial Remuneration. Note No. 11 (a) &
(b) (Schedule 18 B) regarding assets at Gurgaon. Note No.12 (Schedule
18 B) regarding investment. Note No.14 (Schedule 18 B) regarding
impairment of Assets and subject to Note No.7 of Schedule 18B regarding
non provision of gratuity amounting to Rs.220.57 lacs of which Rs.35.85
lacs relate to current year.
(a) in the case of the Balance sheet, of the state of affairs of the
company as at 31st March 2011;
(b) in the case of the Profit and loss account, of the loss for the
year ended on that date; and
(c) in the case of the Cash flow statement, of the cash flows for the
year ended on that date. give a true and fair view in conformity with
the accounting principles generally accepted in India;
(d) We further report that had the remarks given by us in para (vi)
above regarding non provision of gratuity been considered, the loss for
the year would have been Rs.499.72 lacs (against the reported figure of
Rs.463.87 Lacs), the reserve and surplus would have been Rs.2411.75
Lacs (against the reported figure of Rs.2632.32 Lacs). Net Current
Assets would have been Rs.4093.79 Lacs ( as against reported figure of
Rs.4314.36 Lacs).
Annexure to the Auditors' Report
Referred to in paragraph 3 of our report of even date to the members of
Milkfood Limited on the accounts as at and for the year ended March 31,
2011.
1. (a) The Company has maintained list of fixed assets acquired by it.
However the same is required to be updated substantially with regard to
quantitative detail/location, identification etc.
(b) The fixed assets are physically verified by the management
according to a phased programme designed to cover all the items over a
period of two years, which in our opinion, is reasonable having regard
to the size of the company and the nature of its assets. During the
year no physical verification of the fixed assets is done.
(c) In our opinion and according to the information and explanations
given to us, substantial part of fixed assets has not been disposed of
by the company during the year.
2. (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
(c) on the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
3. (a) The company has not taken /granted loans to parties covered in
the register maintained under section 301 of the Companies Act, 1956.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to purchase of inventory, fixed assets and sale of
goods. Further, on the basis of our examination of the books and
records of the company and according to the information and
explanations given to us, we have neither come across, nor have been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control procedures and adjustments thereof except
that internal control procedures in the case of advances to staff need
to be strengthened.
5. In our opinion and according to explanations given to us and as
certified the transactions that need to be entered into the register
maintained under section 301 have been so entered.
6. In our opinion and according to the information and explanations
given to us, the transactions of purchases/ sales made with the parties
in pursuance of contracts or arrangements entered in the registers
maintained under section 301 and exceeding the value of five lakh
rupees in respect of any party during the year, have been made at
prices which are reasonable having regard to prevailing market prices
at the relevant time.
7. In our opinion and according to the information and explanations
given to us and read with note no.5 of schedule 18B the company has
complied with the directives issued by the RBI and provisions of
sections 58 A and 58 AA of the Companies Act, 1956 and the rules framed
thereunder with regard to the deposits accepted from the public.
According to information and explanations given to us no order has been
passed by the National Company Law Tribunal or Company Law Board or RBI
or any Court or any other Tribunal relevant to sections 58A, 58AA or
the other relevant provisions of the Act.
8. It has been informed to us that Company has inbuilt mechanism of
internal checks and all the Plants have been visited by Internal
Chartered Accountant to verify the operational systems and for safety
of its Assets and other matters required by the Management. In our
opinion the Internal Audit needs to be formalized and further
strengthened in terms of scope, coverage and reporting.
9. In terms of Notification No.GSR 661(E) dated 8th October 2004
regarding Cost Accounting Records (Milk Food) (Amendment) Rules, 2004 -
requirement of maintaining records as prescribed under section 209 (1)
(d) of the Companies Act, 1956 has been dispensed with.
10. (a) According to the records of the company, the company is
generally regular in depositing with appropriate authorities undisputed
statutory dues including provident fund, investor education &
protection fund, employees' state insurance, income-tax, sales-tax,
wealth tax, customs duty, excise-duty, cess and other statutory dues
applicable to it with the appropriate authorities
(b) According to the information and explanations given to us and the
records of the company examined by us, the particulars of major dues of
sales-tax, income-tax, customs duty, wealth tax, excise duty and cess
as at March 31, 2011 which have not been deposited on account of a
dispute, are as follows:-
Sl. Name of Statute Nature of Dues Amount Forum where dispute
No. Rs/Lacs is pending
1. Delhi Sales Tax Penalty under 19.73 Appeal before
Act, 1975 Sales Tax Delhi High Court
(1982-83)
2 Delhi Sales Tax Disallowance of 37.02 Appeal before
Act, 1975 ST-1 Forms 1983 1.86 Delhi High Court
-84/ Stock Tran
-sfer etc. 1984 Appeal before
-85 Sales Tax
Appellate
Tribunal, Delhi.
3 Income Tax Act, Regular Demand 12.59 Before CIT(Appeals)
1961 under section143 Delhi
(3),2007-08
4 Income Tax Act, Regular Demand 12.31 Before CIT(Appeals)
1961 under section143 Delhi
(3), A.Y. 2008-09
5 U.P. Vat Act Regular Demand 4.84 Before Addl.
for Assessment Commissioner
Year 2008-09 (Appeals),
Moradabad.
11. The company has NIL accumulated losses as at March 31, 2011 and it
has not incurred any cash losses during the financial year ended on
that date and in the immediately preceding financial year.
12. The company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit fund/
nidhi / mutual benefit fund/ societies are not applicable to the
company.
14. In our opinion, the company is not a dealer or trader in shares,
securities, debentures and other investments.
15. In our opinion, and according to the information and explanations
given to us, the company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
16. In our opinion, and according to the information and explanations
given to us, the company has applied term loans for the purposes for
which the loans were obtained.
17. On Global examination of Balance Sheet, in our opinion, no short
term funds raised have been used for long term purposes.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. The company has not issued any debenture during the year,
accordingly, no securities has been created.
20. The company has not raised any money by public issues during the
year.
21. During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the company, noticed or reported during the year, nor
have we been informed of such case by the management.
For Madan & Associates,
Chartered Accountants
Reg. No.: 000185 N
M.K. MADAN
(Proprietor)
Membership No. FCA 82214
New Delhi
Dated : 26th August, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of Milkfood Limited as
at 31st March, 2010 and also the Profit and Loss Account and the Cash
Flow Statement for the year ended on that date annexed thereto. These
financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We have conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material mis-statement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the annexure referred to above, we
report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit.
(ii) In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of
these books except that gratuity and leave encashment are accounted for
on payment basis.
(iii) The Balance sheet, Profit and loss account and Cash flow
statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the Balance sheet, Profit and loss account and
Cash flow statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 except that gratuity and leave encashment are
accounted for on payment basis.
(v) On the basis of written representations received from the directors
as on 31st March 2010 and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on 31st March 2010
from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956.
(vi) In our opinion and to the best of our information and according to
the explanation given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner so required and read
with Note 7 regarding accounting of income, 11(a) & (b) regarding
assets at Gurgaon, Note No. 12 regarding investment, Note 14 regarding
impairment of Assets subject to note No.8 of Schedule 18B regarding non
provision of gratuity amounting to Rs.184.72 lacs of which Rs.NIL
relate to current year and Note No.12 regarding Managerial Remuneration
of Schedule 18A.
(a) in the case of the Balance sheet, of the state of affairs of the
company as at 31st March 2010;
(b) in the case of the Profit and loss account, of the loss for the
year ended on that date; and
(c) in the case of the Cash flow statement, of the cash flows for the
year ended on that date. give a true and fair view in conformity with
the accounting principles generally accepted in India;
(d) We further report that had the remarks given by us in para (vi)
above regarding non provision of gratuity has been considered, the
reserve surplus would have been Rs. 2964.29 lacs (against the reported
figure ofRs. 3149.01 lacs) Net Current Assets would have been Rs.
2121.59 lacs (as against reported figure of Rs. 2306.31 lacs).
Annexure to the Auditors Report Referred to in paragraph 3 of our
report of even date to the members of Milkfood Limited on the accounts
as at and for the year ended March 31, 2010.
1. (a) The Company has maintained list of fixed assets acquired by it.
However the same is required to be updated substantially with regard to
quantitative detail/location, identification etc.
(b) The fixed assets are physically verified by the management
according to a phased programme designed to cover all the items over a
period of two years, which in our opinion, is reasonable having regard
to the size of the company and the nature of its assets. During the
year no physical verification of the fixed assets is done.
(c) In our opinion and according to the information and explanations
given to us, substantial part of fixed assets has not been disposed of
by the company during the year.
2. (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
(c) on the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
3. (a) The company has not granted loans to companies covered in the
register maintained under section 301 of the Companies Act, 1956.
However, company has incurred expenses on behalf of the subsidiary
company. Company has granted loans to its wholly owned subsidiary for
setting up IT Park and amount outstanding at the year end is
Rs.342.12lacs.
The Company has taken in previous year loans from companies/parties,
covered in the register maintained under section 301 of the Companies
Act, 1956. The amount outstanding at the year end is Rs. 600 lacs.
(b) In our opinion the terms and conditions of such loans are not prima
facie prejudicial to the interest of the company. The other terms of
repayment in respect of the loans taken/ given are not stipulated.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to purchase of inventory, fixed assets and sale of
goods. Further, on the basis of our examination of the books and
records of the company and according to the information and
explanations given to us, we have neither come across, nor have been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control procedures and adjustments thereof except
that internal control procedures in the case of advances to staff need
to be strengthened.
5. In our opinion and according to explanations given to us and as
certified the transactions that need to be entered into the register
maintained under section 301 have been so entered.
6. In our opinion and according to the information and explanations
given to us and the transactions of purchases/ sales made in pursuance
of contracts or arrangements entered in the registers maintained under
section 301 and exceeding the value of five lakh rupees in respect of
any party during the year have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time. With
regard to financial arrangements processing charges/ other
contingencies we are informed that these all represent specific and
specialized services for which market prices are not available. However
considering the cost and benefits available & other factors payments
made/ received are reasonable.
7. In our opinion and according to the information and explanations
given to us and read with note no.5 of schedule 18B the company has
complied with the directives issued by the RBI and provisions of
sections 58A and 58AA of the Companies Act, 1956 and the rules framed
thereunder with regard to the deposits accepted from the public.
According to information and explanations given to us no order has been
passed by the National Company Law Tribunal or Company Law Board or RBI
or any Court or any other Tribunal relevant to sections 58A, 58AA or
the other relevant provisions of the Act.
8. It has been informed to us that Company has inbuilt mechanism of
internal checks and all the Plants have been visited by Internal
Chartered Accountant to verify the operational systems and for safety
of its Assets and other matters required by the Management. In our
opinion the Internal Audit needs to be formalized and further
strengthened in terms of scope, coverage and reporting.
9. In terms of Notification No.GSR 661 (E) dated 8th October 2004
regarding Cost Accounting Records (Milk Food) (Amendment) Rules, 2004 -
requirement of maintaining records as prescribed under section 209 (1)
(d) of the Companies Act, 1956 has been dispensed with.
10. (a) According to the records of the company, the company is
generally regular in depositing with appropriate authorities undisputed
statutory dues including provident fund, investor education &
protection fund, employees state insurance, income-tax, sales-tax,
wealth tax, customs duty, excise-duty, cess and other statutory dues
applicable to it with the appropriate authorities except that TDS on
perquisits value in respect of interest free loans to employees has
been made.
(b) According to the information and explanations given to us and the
records of the company examined by us the à particulars of major dues
of sales-tax, income-tax, customs duty, wealth tax, excise duty and
cess as at March 31, 2010 which have not been deposited on account of a
dispute, are as follows:-
Sl. Name of Statute Nature of Dues Amount Forum where disputeis
pending
No. Rs./Lacs
1. Delhi Sales Tax
Act, 1975 Penalty under
Sales Tax (1982-83) 36.82 Appeal before Sales
Tax Appellate
Tribunal, Delhi.
2 Delhi Sales Tax
Act, 1975 Disallowance of
ST-1 Forms 1983-84/ 55.53 Appeal before Sales
Tax Appellate
Tribunal, Delhi.
Stock Transfer etc.
1983-84 1.86 -do-
3 Income Tax Act,
1961 Penalty u/s 271(1) (c)
Assessment Year 2.75 Before CIT (Appeal)
1992-93
4 Income Tax Act,
1961 Regular Demand under
section143 (3), 8.33 Before CIT (A)
2007-08
5 Delhi Sales Tax
Act 1975 Under Sales Tax Act 0.28 Before D.C. Sales Tax
11. The company has NIL accumulated losses as at March 31, 2010 and it
has not incurred any cash losses during the financial year ended in
that date and in the immediately preceding financial year.
12. The company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit fund/
nidhi / mutual benefit fund/ societies are not applicable to the
company.
14. In our opinion, the company is not a dealer or trader in shares,
securities, debentures and other investments.
15. In our opinion, and according to the information and explanations
given to us, the company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
16. In our opinion, and according to the information and explanations
given to us, the company has applied term loans for the purposes for
which the loans were obtained.
17. During the year no Short Term funds have been raised.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. The company has not issued any debenture during the year,
accordingly, no securities has been created.
20. The company has not raised any money by public issues during the
year.
21. During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the company, noticed or reported during the year, nor
have we been informed of such case by the management.
For R.N. BAHL & CO.
Chartered Accountants
R.N. Bahl
New Delhi (Partner)
Dated : 11 th August, 2010 Membership No. FCA 2277
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