elnet technologies ltd share price Auditors report


To the Members of

M/S. SUNIL AGRO FOODS LIMITED

Report on the Audit of the Financial Statements

Qualified Opinion

We have audited the accompanying Standalone financial statements of M/s. Sunil Agro Foods Limited ("the Company") which comprises the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss(including Other Comprehensive Income), the Statement of changes in Equityand the Statement of Cash Flowsfor the year then endedand 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, the aforesaid financial statements give the information required by the Act in the manner sorequired 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 2023, and its Profit, total comprehensive income, the changes in equity and its cash flowsfor the year ended on that date.

Basis for Qualified Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those (SAs) are further described in the Auditors 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 the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the financial statement.

1. The Company has not made provisions for Bad debt of Rs 97.56 Lakh (PY Rs.97.56 lakhs) in case of one debtor Maiyas Beverage and Foods Private Limited which was referred to NCLT under Indian Bankruptty Code and NCLT has passed the order on 10th May, 2019As per NCLT order only 15.14% amount is payable to all the Sundry Creditors of Maiyas Beverage and Foods Private Limited Companys total outstanding against Maiyas Beverage and Foods Private Limited at the time of referral to NCLT stood Rs.114.97 lakhs (PY Rs.114.97 lakhs). Due to this Companys profit and Sundry debtors are overstated by Rs.97.56 lakhs (PY Rs.97.56 lakhs).

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addresses the matter is provided in that context

Descriptions of Key Audit Matter

How we addressed the matter in our audit

A. Valuation of Inventories

We obtained assurance over the appropriateness of the managements assumptions applied in calculating the value of the inventories and related provisions by:

Refer to note 6 to the financial statements.

The Company is having Inventory of 3,970.39 lakh as on 31st March, 2023.

• Completed a walkthrough of the inventory valuation process andassessed the design and implementation of the key controls addressing the risk.

Inventories are to be valued as per lnd AS 2. As described in the accounting policies in note 45( 2.2) to the financial statements, inventories are carried at the lower of cost and net realisable value. As a result, the management applies judgment in determining the appropriate provisions against inventory of Stores, Raw Material, Finished goods and Work in progress based upon a detailed analysis of old inventory, net realisable value below cost based upon future plans for sale of inventory.

• Verifying the effectiveness of key inventory controls operating over inventories; including sample based physical verification.

? Verify that the adequate cut off procedure has been applied to ensure that purchased inventory and sold inventory are correctly accounted.

• Reviewing the document and other record related to physical verification of inventories done by the management during the year.

• Verify that inventories are valued in accordance with lnd AS 2

• Verifying for a sample of individual products that costs have been correctly recorded.

• Comparing the net realisable value to the cost price of inventories to check for completeness ofthe associated provision.

To ensure that all inventories owned by the entity are recorded and recorded inventories exist as at the year-end and valuation has been done correctly

• Re viewing the his tori cal acc ur acy o f in ven tory provisioning and the level of inventory writeoffs during the year.

Our Conclusion:

Based on the audit procedures performed we did not identify any materialExceptions in the Inventory valuation.

Information other than the Financial Statements and Auditors Report Thereon

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Boards Report including Annexure to the Boards Report, hut does not include the financial statements and our auditors report thereon. The Companys annual report is expectedto he made available to us after the date of thisauditors report

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact We have nothing to report in this regard.

Responsibility of Management for the Standalone Financial Statements

The Companys Management and 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 including other comprehensive income, cash flows and changes in equityof 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 otheT 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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection, application, implementation and maintenance of appropriate of 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 statement that give a true and fair view and are free from material misstatement; whether due to fraud ot error.

In preparing the financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Management and Board of Directors are also responsible for overseeing the companys financial reporting process.

Auditors Responsibilityfor the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free froin material misstatement whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it existe. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit We also:

* Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

* Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, Under section 143[3J(0 of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

* Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management

* Conclude on the appropriateness of managements use of the going concern hasis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion, Our conclusions are based on the audit evidence obtained up to the date of our auditors report However, future events or conditions may cause the Company to cease to continue as a going concern.

* Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative

factors in (i) planning the scope of our audit work and in evaluating the results of our work; and

(ii) to evaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those chargedwith governance, we determine those mattersthat were of most significance In the audit of thestandalone financial statements of the currentpedod and are therefore the key audit matters.We describe these matters in our auditors reportunless law or regulation precludes puhlic disclosureabout the matter or when, in extremely rarecircumstances, we determine that a matter shouldnot be communicated in our report because theadverse consequences of doing so would reasonablyhe expected to outweigh the public interest benefitsof such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies [Auditors Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 14-3 of the Companies Act, 2013, we give in the "Annexure A" statement on the matters specified in paragraphs 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 helief were necessary for the purposes of our audit

b. Except for the effect of the matters described in basts of qualified opinion paragraph above,

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 EquLtyand the Statement of Cash Flow dealtwith by this Report are in agreement with the books of account.

d. In our opinion, the aforesaid financial statements comply with the Indian Accounting Standards 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 31st March, 2Q23taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2023 from being appointed as a director in terms of Section 164 [2) of the Act,

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure B". Our Report expresses an Qualified opinion on the adequacy and operating effectiveness of the companys internal financial controls over financial reporting.

g. With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors] Rules, 2014, as amended, In our opinion and to the best of our information and according to the explanations given to us:

i. The Company hasdisclosed the impact of pending litigations which could impact its financial position as mentioned in note no.32 to financial statement

h. The Company did not have any long-term contracts including derivatives contracts for which there .were any material foreseeable losses.

Hi. The amount which was required to be transferred to the Investor Education and Protection

Fund has been transferred by the company on time and there has been no delay in transferrins amount &

iv. a. The management has rep resented that, to the best of its knowledgeand belief, no funds have beenadvanced or loaned or investedfeither from borrowed fundsor share premium or any other source or kind of funds] hy theCompany to or in any otherpersons or entities, includingforeign entities (Intermediaries11), with the understanding, whetherrecorded in writing or otherwise that the Intermediary shall:

• directly or indirectly lendor invest in other personsor entities identified many manner whatsoever("Ultimate Beneficiaries1) byor on behalf of the Companyor

* Provide any guarantee,security or the like to oron behalf of the UltimateBeneficiaries,

b. The management has represented, that, to the best of its knowledge and belief, no funds have been received by the company from any person 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 Beneficiaries1) or

- provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c. Based on audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to helieve that the representations under subclause iv(a) and iv(b) contain any material mis-statement.

v. The company has declared dividend during the year in compliance with section 123 of the Companies Act, 2013.

vi. 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 w.e,f. 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.

h. With respect to the matter to be includedin the Auditors Report under Sectionl97(16) of the Act as Amended:

In our opinion and according to theinformation and explanations given to us,the remuneration paid by the Company toits directors during the current year is inaccordance with the provisions of Sectionl97 of the Act, The remuneration paid toany director is not in excess of the limitlaid down under Section 197 of the AcLThe Ministry of Corporate Affairs has notprescribed other details under Sectionl97(16) of the Act which are required tohe commented upon by us.

ForGRV&PK.

Chartered Accountants FRN.008099S

Kamal Kishore Partner M N.205819

[I DIN:23205819BGXZVF3153 Place: Bangalore Date: 27-05-2023

dimeXHre Auditors Renortmi the Financial statement nf Sunil a?™

Limited far the year ended 3l? March. 2023

The Annexure referred to in Independent Auditors Report on other Legal and Regulatory Requirement s section of our report of even date to the members of M/s. Sunil Agro Foods

Limited ("the Company"} on the financial statementsfor the year ended 31 March 2023 we report that;

CO fa) [A] The company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant & Equipment; [B] The company is not having any intangible asset Therefore, the provisions of Clause (i)(a}(B) of paragraph 3 of the order are not applicable to the company.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the company, these Properties, Plant & Equipmenthave been physically verified by the management at reasonable intervals; 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, the title deeds of immovable properties are held in the name of the company.

(d) 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 not revalued its Property, Plant and Equipment during the year.

(e) According to the information and explanations given to us and on the basis oFour examination of the records of the company, there are no proceedings initiated or are pending against the company for holding any benami property under the Benami Transactions (Prohibition] Act, 198B [45 of 1988) and rules made thereunder.

(n) (a}0n basis of information and explanation given to us. Physical verification of

Inventory has been conducted at reasonable intervals by the managementProcedure of physical verification of Inventory followed by the management is reasonable & adequate in relation to the size of company and nature of its business and no material discrepancies were noticed on physical verification of stocks as compared to book records that were 10% or more,

(b) 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 been sanctioned working capital limits in excess of five crores rupees, in aggregate, from banks on the basis of security of current assets. Differences between Quarterly returns or statement filed by the company with banks and books of account are as follows:

Quarter As per bank returnfin Lakhs)

As per books of account fin lakhs) Difference (in lakhs) %age of Differences

Q1 3899.55

3,626.71 272,84 7.00%

Q2 4,203.88

4,044.92 158.96 3.78%

Q3 3,892.10

3,828.42 63.68 1.64%

Q4 3,876.10

3,970.39 (94.29) (2.43%)

(iii) In our opinion and according to the information and explanations given to us, the Company has not made any investments, granted any secured or unsecured loans to companies, firms, Limited LiabilityPartnershipsarto any of the parties. Accordingly, clause

[iii] of paragraph 3 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 provided any loans, guarantees, and Investments to which the provision of sec 185 of the act apply. However regarding loans, guarantees, and Investments to which the provision of sec 186 apply such investment are within the limit provided under Section 186 of the act.

(v) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits or amounts which are deemed to be deposits from public during the year. Accordingly, clause (v)of paragraph 3 of the order is not applicableto the company.

(v!) As informed to us, the Central Government has not prescribed maintenance of cost records under sub-section (1} of Section 148 of the Act, in respect of the activities carried on by the Company Accordingly, clause (vi)of paragraph 3 of the order is not applicableto the company.

(vii) [a] According to the records of the company and 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 Goods and Services Tax, Provident Fund,employees state insurance (ESI), income Tax, Sales 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 Goods and Services Tax, Provident Fund,employees state insurance (ESI), Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other material statutory dues in arrears /wereoutstanding as at 31 March, 2023 for a period of more than six months from the date they became payable.

(b) Details of Statutory dues referred in clause (a) above which have not been deposited as on 31st March, 2023 on account of any dispute are given below:

1 Name of Statute

Nature of the dues Disputed amount pending (Amount in Lakhs) Period to which the amount relates Forum where dispute is pending.

Central Excise Act, 1944

Central Excise duty 195.51 05/08/2010 to 31/10/2013 CESTAT
Excise duty Penalty

Excise duty Interest

195.51

Department yet to quantify the interest liability

Until Payment made

fviii) There were no transactions relating to previously unrecorded income that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961).

(ix) (a) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of any loan or other borrowings or any interest due thereon to any lender.

(b) In our opinion and according to the information and explanations given to us, the

company has not been a declared wilful defaulter by any bank or financial institution or other lender.

(c) In our opinion and according to the information and explanations given to us, the term loanstaken were applied for the purpose for which the loans were obtained.

(d) In our opinion and according to the information and explanations given to us, there are no funds raised on short term basis which have been utilised for long term purposes.

(e) The company does not have Subsidiaries, associates or Joint Ventures, therefore reporting on clause (ix) (e) of paragraph 3 of the order are not applicableto the company.

(f) The company does not have Subsidiaries, associates or Joint Ventures, therefore reporting on clause (ix) (f) of paragraph 3 of the order are not applicableto the company.

DO (a) The Company has not raised money by way of initial public offer or further public offer (including debt instrumentsjduring the year. Therefore, the provisions of Clause

(x) [a) of paragraph 3 of the order are not applicable to the Company.

[b] The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, clause (x)(b)of paragraph 3 of the order is not applicableto the company.

(xi) (a) No fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

[b] During the year no report under sub-section (12) of section 143 of the Companies Act has been filed by the auditors in Form ADT-4 as prescribed under rule 13 of Companies [Audit and Auditors) Rules, 2014 with the Central Government

(c) As auditor, we dtd not receive any whistle- blower complaint during the year.

(xii) In our opinion and according to the information and explanations given to us, the company is not a Nidhi Company. Accordingly, clause (xii) of paragraph 3 of the order is not applicableto the company.

(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 Indian Accounting Standards.

[xiv] (a) Based on information and explanationsprovided to us and our audit procedures, inour opinion, the Company has an internalaudit system commensurate with the sizeand nature of its business.

[b] We have considered the internal auditreports of the Company issued till date forthe period under audit

[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 any non-cash transactions with directors or persons connected with him. Accordingly, clause (xv) of paragraph 3 of the order is not applicableto the company.

(xvi) [a) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, clause [xvi)[a] and (b) of paragraph 3 of the order is not applicableto the company.

[b) The company is not a Core Investment Company [C1C] as defined in the regulations made by the Reserve Bank of India.

[c] As per the information and explanations received, the group does not have any CIC as part of the group.

(xvu) The company has not incurred cash loss in current financial year as well in immediately preceding financial year.

(xviii] There has been no resignation of the statutory auditors of the company during the

year.

(xix) On the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of Financial liabilities, other information accompanying the financial statements, the auditors knowledge of the Board of Directors and management plans, nothing has come to our attention which causes us to believe that any material uncertainty exists as on the date of the audit report that company is not 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. We, however, state thatthis is not an assurance as to the future viabilityof the Company. We further state that out-reporting is based on the facts up 1to the dateof the audit report and we neither give anyguarantee nor any assurance that all liabilitiesfalling due within a period of one year from thebalance sheet date, will get discharged by theCompany as and when they fell due.

(xx) There is not liability of the company under the provisions of section 135 of the Companies Ad; relating to Corporate Social Responsibility. Therefore, the provisions of Clause (xx) (a) and (b) of paragraph 3 of the order are not applicable to the Company.

(xxi) The company does not require toprepare consolidated Financial statement. Therefore

the provisions of Clause (xxi) of paragraph 3 of the order are not applicable to the Company.

For GRV&P K.

Chartered Accountants FRN.008099S

Kamal Kishore

Partner

MN.Z05819

UDIN:2 32 05819BGXZVF3153 Place: Bangalore Date: 27-05-2023

Afanexure - B to the Independent Auditors Report

(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements seetion of our report to the Members of Sunil Agro Foods Limited of even date)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of M/s. Sunil Agro Foods Limited("the Company") as of 31 March 2023 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys 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 (‘ICAT). 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 companys 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.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys 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 "Guidance Note") and the Standards on Auditing issued by ICAl 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 auditors 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 Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A companys 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 companys 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 companys 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. According to the information and explanation given to us and based on our audit, the following material weaknesses have been identified as at March 31st, 2023

a) The company did not have art appropriate internal contra/ system for obtaining external balance confirmation on periodic basis. This could potentially result in inaccurate assets and liabilities disclosed in the books of accounts.

A "material weakness" is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a materia] misstatement of the companys annual or interim financial statements will not be prevented or detected on a timely basis.

Qualified Opinion

In our opinion, except for the effects/possible effects of the material weaknesses described above on the achievement of the objectives of the control criteria ,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 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.

We have considered the material weaknesses identified and reported above in determining the- nature, timing, and extent of audit tests applied in our audit of the March 31, 2023 standalone financial statements of the Company, and our aforesaid report and opinion on Internal Financial Control over Financial Reporting should be read in conjunction with our report of even date issued on the standalone Financial statements of the Company.

ForGRV&PK.

Chartered Accountants FRN.008099S

Kapial Kish ore

Partner

MN.20S819

UD1N;23205819BGXZVF31S3

Place: Bangalore Date: 27-05-2023

SUM1L AG BO FOODS LIMITED

CIN: l01111KA19SBPLCOOBg61