To
The Members of Modern Dairies Limited Report on the Financial Statements We have
audited the accompanying financial statements of Modern Dairies Limited, which comprise
the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss (including Other
Comprehensive Income), the Statement of Changes in Equity and Statement of Cash Flows for
the year ended, and a summary of significant accounting policies and other explanatory
information.
MANAGEMENTRs.S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The CompanyRs.s Board of Directors is responsible for the matters stated in Section
134(5) of the Companies Act, 2013 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 including other comprehensive income, changes in equity
and cash flows 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 other accounting principles generally accepted in
India.
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.
AUDITORSRs. 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 there under.
We conducted our audit in accordance with the Standards on Auditing specified under
Section 143(10) of the Companies 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 auditorRs.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 CompanyRs.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 CompanyRs.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
We have audited the standalone financial statements of Modern Dairies Limited
("the Company"), which comprise the balance sheet as at March 31,2023, and the
statement of Profit and Loss, (statement of changes in equity) and the statement of cash
flows for the year then ended, and notes to the financial statements, including a summary
of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations
given to us, except for the effects of the matter described in the Basis for Qualified
Opinion section of our report and Emphasis of Matters, these quarterly financial results
as well as the year to end results are presented in accordance with requirements of
Regulation 33 of the SEBI (listing obligation and disclosure requirement) Regulations,
2015 in this regard and give a true and fair view of total comprehensive income comprising
of net profit and other comprehensive income and financial information for the quarter
ended 31st March, 2023 and for the year ended March 31st, 2023.
Basis for Qualified Opinion
DirectorRs.s remuneration is not admissible as prescribed in Sec-197 of companies Act,
2013 except in accordance with the provision of Schedule V and if it is not able to comply
with such provisions, the prior approval of lenders is required.
The Company is not eligible to pay director remuneration for non-compliance of
conditions prescribed in schedule V of the companies Act, 2013. During the year, the
company has given the director remuneration to Mr. Ashwani Kumar Aggarwal (Executive
Director) amounting to Rs. 35,81,520 (for current quarter Rs.8,95,380).
Apart from the managerial remuneration for the year ended 31st March, 2023,
as mentioned above
the company has paid director remuneration of Rs. 2,50,01,962 /- till date without
complying the provisions of Schedule V of the companies Act, 2013.
We conducted our audit in accordance with Standards on Auditing (SAs) specified under
section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are
further described in the AuditorRs.s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the Company in accordance with the
Code of Ethics issued by the Institute of Chartered Accountants of India together with the
ethical requirements that are relevant to our audit of the financial statements under the
provisions of the Companies Act, 2013 and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the ICAIRs.s Code of Ethics. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our qualified opinion.
EMPHASIS OF MATTER
(A) Interest provisioning on various facilities from lenders
The Company has settled all the dues of the lenders namely PNB, Edelweiss ARC Limited
(Earlier State Bank of India) by the way of OTS & restructuring. The OTS &
restructuring scheme is under implementation and interest due there on has been accounted
for.
Since, the account with various banks have turned NPA in the previous years, the
company has not provided interest on the credit facilities subsequent to the accounts
having been declared NPA. In case the OTS/ restructuring scheme fails, the Company will
have to provide for Interest from the date of accounts becoming non performing asset. Such
interest amounts for the year ended 31st March, 23, Rs. 42.99 crores. This will
effect the stated current liabilities & profits for the current year 31st
March, 23, to that extent.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (AuditorRs.s Report) Order, 2016 ("the
Order") issued by the Central Government of India in terms of sub-section (11) of
section 143 of the Act, we give in the Annexure, a statement on the matters specified in
the paragraph 3 and 4 of the Order, to the extent applicable.
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 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 prescribed under section 133 of the Act.
e. There are no observations or comments on financial transaction or matters which may
have adverse effect on the functioning of the company except mentioned in the basis for
qualified opinion.
f. On the basis of the written representations received from the directors as on March
31,2023 taken on record by the Board of Directors, none of the directors is disqualified
as on March 31, 2023 from being appointed as a director in terms of Section 164(2) of the
Act.
g. With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate report in "Annexure". Our report expresses an unmodified opinion on the
adequacy and operating effectiveness of the CompanyRs.s internal financial controls over
financial reporting;
h. With respect to the other matters to be included in the AuditorRs.s Report in
accordance with the requirements of section 197 (16) of the Act, as amended, in our
opinion and to the best of our information and according to the explanations given to us,
the remuneration paid by the Company to its directors during the year is not in accordance
with the provisions of section 197 of the Act; and
i. With respect to the other matters to be included in the AuditorRs.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:
1. The Company has disclosed the impact of pending litigations on its financial
position in its financial statements;
2. The Company has made provision, as required under the applicable law or Indian
accounting standards, for material foreseeable losses, if any, on long-term contracts
including derivative contracts;
3. There has been no delay in transferring amounts, required to be transferred, to the
Investor Education and Protection Fund by the Company.
4. (a) The management has represented that, to the best of its knowledge and belief, no
funds have been advanced or loaned or invested (either from borrowed funds or share
premium or any other sources or kind of funds) during the year by the company to or in any
other persons or entities, including foreign entities ("Intermediaries"), with
the understanding, whether recorded in writing or otherwise, that the Intermediary shall,
whether, directly or indirectly lend or invest in other persons or entities identified in
any manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries")
or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) The management has represented that, to the best of its knowledge and belief, no
funds have been received by the company during the year from any persons or entities,
including foreign entities ("Funding Parties"), with the understanding, whether
recorded in writing or otherwise, that the company shall, whether, directly or indirectly,
lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee,
security or the like on behalf of the Ultimate Beneficiaries; and
(c) Based on such audit procedures performed that have been considered reasonable and
appropriate in the circumstances, nothing has come to our notice that has caused us to
believe that the representations under sub-clause (i) and (ii) contain any material
misstatement.
5. No dividend has been declared or paid during the year by the Company
6. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books
of account using accounting software which has a feature of recording audit trail (edit
log) facility is applicable to the Company with effect from April 1, 2023, and
accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is
not applicable for the financial year ended March 31,2023.
FOR APT & CO LLP Chartered Accountants
|
CA. Amrit Pal Singh |
|
Partner |
| Place: Chandigarh |
Membership no. 508134 |
| Date: 12th May, 2023 |
(Firm Registration No. 014621C/ N500088) |
|
UDIN: 23508134BGYDZE7987 |
ANNEXURE TO THE AUDITORSRs. REPORT
The Annexure referred to in our report to the members of the company for the year ended
3181 March, 2023. To the best of our knowledge and belief and information &
explanation given to us, we further report that:-
(i) (a) (A) The Company has maintained proper records showing full particulars,
including quantitative details and
situation of Property, Plant and Equipment;
(B) The company is maintaining proper records showing full particulars of intangible
assets;
(b) As explained to us, the fixed assets have been physically verified by the
management at reasonable intervals which in our opinion is appropriate having regards to
size of the company and nature of its assets. No material discrepancies have been noticed
during the year.
(c) Based on our examination of these records and other sufficient appropriate audit
evidences, in our opinion, the title deeds of all the immovable properties (which are
included under the head Rs.Property, Plant and EquipmentRs.) are held in the name of the
Company.
(d) The Company has not revalued its Property, Plant and Equipment (including right of
use assets) or intangible or both during the year ended March 31,2023.
(e) There are no proceedings initiated during the year or are pending against the
Company as at March 31, 2023 for holding any benami property under the Prohibition of
Benami Property Transactions Act, 1988 (as amended) and rules made thereunder.
(ii) (a) The inventory of the company has been physically verified by the management at
reasonable intervals
during the year and in our opinion the coverage and procedure of such verification by
the management is appropriate. No material discrepancies were noticed.
(b) There has been no sanctioning of working capital limits in excess of five crore
rupees, in aggregate, from banks or financial institutions on the basis of security of
current assets during the year ended March, 31 2023.
(iii) The company has not made any investments in, provided any guarantee or security
or granted any loans or advances in the nature of loans, secured or unsecured, to
companies, firms, Limited Liability Partnerships or any other parties during the year
ended on 31st march 2023.
(iv) In our opinion, the Company has not entered into any transaction covered under
Sections 185 and 186 of the Act. Accordingly, the provisions of clause (iv) of the Order
are not applicable.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76
of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended).
Accordingly, the provisions of clause (v) of the Order are not applicable.
(vi) The company has made and maintained the cost records specified by central
government under sub section (1) of section 148 of the companies Act.
(vii) (a) The Company is generally regular in depositing undisputed statutory dues
including goods and Services
Tax, provident fund, employeesRs. state insurance, income-tax, sales-tax, service tax,
duty of customs, duty of excise, value added tax, cess and any other statutory dues to the
appropriate authorities.
(b) The dues outstanding in respect of income-tax, sales-tax, service tax, duty of
customs, duty of excise, goods and service tax and value added tax on account of any
dispute, are as follows:
Statement of Disputed Dues
| Name of the statute |
Nature of dues |
Amount (in lacs) |
Amount paid under protest (in lacs) |
Period to which the amount relates |
Forum where dispute is pending |
| The Haryana Murrah Buffalo and Other Milk Animal Breed (Preservation and Development
of Animal Husbandry and Dairy Development Sector) Act, 2001 |
Milk Cess |
2012.26 |
5,91.00 |
2001-02 to 2022-23 |
HonRs.ble Supreme Court of India |
| The Haryana Murrah Buffalo and Other Milk Animal Breed (Preservation and Development
of Animal Husbandry and Dairy Development Sector) Act, 2001 |
Interest on milk cess |
44085.72 |
|
2001-02 to 2022-23 |
HonRs.ble Supreme Court of India |
| Haryana Water Resources Authority- Panchkula |
Ground Water Abstraction |
46.816 |
|
24.12.20 to 15.09.21 |
Ground Water Consumption (in m3/per day) @ Rs.16/- per kl on
1100 kl per day to be charged by the HWRA AUTHORITY - Panchkula. |
| Haryana Tax on Entry of Goods into Local Areas Act, 2003 |
Entry Tax |
164.58 |
|
2007-08 to 2018-19 |
HonRs.ble Punjab & Haryana High Court |
(viii) The Company has not surrendered or disclosed any transaction, previously
unrecorded in the books of account, in the tax assessments under the Income tax Act, 1961
as income during the year. Accordingly, the requirement to report on clause (viii) of the
Order is not applicable to the Company.
(ix) (a) The Company had defaulted on timely payment of credit facilities and interest
thereon to Banks. The amount
outstanding is Rs. 1,64,59.03 Lacs* and date of irregularity is 31.10.2015 and
30.11.2015:
*It doesnRs.t include interest of Rs. 42,99.13 Lacs not provided in books regarding
various credit facilities till 31st March, 2023.
(b) The Company has not been declared as a willful defaulter by any bank or financial
institution or other lender during the year.
(c) There were no Term loans availed during the year under audit.
(d) The Company has not availed funds on short term basis during the year under audit.
(e) The Company has not taken any funds from any entity or person on account of or to
meet the obligations of its subsidiaries, associates or joint ventures during the year.
(f) The Company has not raised loans during the year on the pledge of securities held
in its subsidiaries, joint ventures or associate companies. Hence, the requirement to
report on clause (ix)(f) of the Order is not applicable to the Company.
(x) (a) The Company has not raised money by way of initial public offer or further
public offer (including debt
instruments and term loans during the year).
(b) The Company has not made any preferential allotment or private placement of shares/
fully or partially or optionally convertible debentures during the year under audit.
(xi) (a) No fraud by the Company or on the Company by its officers or employees has
been noticed or reported
during the period covered by our audit.
(b) During the year and up to the date of this report, no report under section 143 (12)
of the Act has been filed by secretarial auditor or by the predecessor auditors or by us
in Form ADT - 4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014
with the Central Government.
(c) There has been no Whistle blower complaint received during the year by the company.
(xii) In our opinion, considering the nature of activities carried on by the Company
during the year, the provisions of any special/statute applicable to Nidhi Company are not
applicable to it.
(xiii) In our opinion all transactions with the related parties are in compliance with
Sections 177 and 188 of Act, where applicable, and the requisite details have been
disclosed in the financial statements etc., as required by the applicable Ind-AS.
(xiv) (a) The Company has an internal audit system commensurate with the size and
nature of its business.
(b) The reports of the Internal Auditors for the period under audit were considered by
us.
(xv) The Company has not entered into any non-cash transactions with its directors or
persons connected with its directors and hence requirement to report on clause (xv) of the
Order is not applicable to the Company.
(xvi) (a) The provisions of section 45-IA of the Reserve Bank of India Act, 1934 (2 of
1934) are not applicable to
the Company. Accordingly, the requirement to report on clause (xvi)(a) of the Order is
not applicable to the Company.
(b) The company is a Manufacturing company of milk and Milk Products registered under
companies Act 2013. Hence, it is not required to obtain certificate of Registration (CoR)
from the Reserve Bank of India as per the Reserve Bank of India Act 1934.
(c) The Company is not a Core Investment Company as defined in the regulations made by
Reserve Bank of India. Accordingly, the requirement to report on clause c(xvi) of the
Order is not applicable to the Company.
(d) There is no Core Investment Company as a part of the Group, hence, the requirement
to report on clause d(xvi) of the Order is not applicable to the Company.
(xvii) The Company has not incurred cash losses in the current year or the immediately
preceding financial year. However, while calculating the Profit, interest amounting to Rs.
4299.13 Lakhs (Previous year amounting to Rs. 3741.41 Lakhs) on various credit facilities
was not provided in the books. Therefore, if interest on the above is provided in
statement of profit and loss. There would be cash losses in the current year amounting to
Rs. 2748.14 Lakhs (Previous Year amounting to Rs. 2590.66 Lakhs). Refer Point No. 2.12 in
Notes to Accounts.
(xviii) There has been no resignation of the statutory auditors during the year ended
31st March 2023.
(xix) On the basis of the financial ratios, ageing and expected dates of realization of
financial assets and payment of financial liabilities, other information, our knowledge of
the Board of Directors and management plans and based on our examination of the evidence
supporting the assumptions, nothing has come to our attention, which makes us to believe
that no material uncertainty exists as on the date of the audit report, that Company is
capable of meeting its liabilities existing at the date of balance sheet as and when they
fall due within a period of one year from the balance sheet date.
(xx) (a) Since Section 135 is not applicable to the company Hence in respect of other
than ongoing projects, there
are no unspent amounts that are required to be transferred to a fund specified in
Schedule 9II of the Act, in compliance with second proviso to sub section 5 of section 135
of the Act.
(b) Since Section 135 of the companies Act 2013 is not applicable to the company. There
are no unspent amounts that are required to be transferred to a special account in
compliance of provision of sub section (6) of section 135 of the Act.
For APT & CO LLP Chartered Accountants
|
CA Amrit Pal Singh |
| Place: Chandigarh |
Partner |
| Date: 12th May, 2023 |
Membership No. 508134 |
|
(Firm Registration No. 014621C/N500088) |
|
UDIN: 23508134BGYDZE7987 |
Annexure 2
Annexure to the Independent AuditorRs.s Report of even date to the members of Modern
Dairies Limited, on
the financial statements for the year ended 31st March, 2023
Independent AuditorRs.s report on the Internal Financial Controls under Clause (i) of
Sub-section 3 of Section
143 of the Companies Act, 2013 ("the Act")
1. In conjunction with our audit of the financial statements of Modern Dairies Limited
("the Company") as of and for the year ended 3151 March 2023, we have
audited the internal financial controls over financial reporting (IFCoFR) of the company
of as of that date.
ManagementRs.s Responsibility for Internal Financial Controls
2. The CompanyRs.s Board of Directors 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 Institute of Chartered Accountants of India. 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 the
companyRs.s business, including adherence to companyRs.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 Act.
Auditors
3. Our responsibility is to express an opinion on the CompanyRs.s IFCoFR based on our
audit. We conducted our audit in accordance with the Standards on Auditing, issued by the
Institute of Chartered Accountants of India (ICAI) and deemed to be prescribed under
Section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the
Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the
"Guidance Note") issued by the ICAI. 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 IFCoFR were established and maintained and if
such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy
of the IFCoFR and their operating effectiveness. Our audit of IFCoFR included obtaining an
understanding of IFCoFR, 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 auditorRs.s judgement, including the
assessment of the risks of material misstatement of the financial statements, whether due
to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the CompanyRs.s IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
6. A CompanyRs.s IFCoFR 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
CompanyRs.s IFCoFR 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
CompanyRs.s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of IFCoFR, 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 IFCoFR
to future periods are subject to the risk that IFCoFR may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, adequate internal
financial controls over financial reporting and such internal financial controls over
financial reporting were operating effectively as at 31st March 2023, 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 APT & CO LLP
Chartered Accountants
|
CA Amrit Pal Singh |
|
Partner |
| Place: Chandigarh |
Membership No. 508134 |
| Date: 12th May, 2023 |
(Firm Registration No. 014621C/N500088) |
|
UDIN: 23508134BGYDZE7987 |
+91-9892691696
