To the members of Megastar Foods Limited Report on the Standalone
Financial Statements
Opinion
We have audited the standalone financial statements of MEGASTAR FOODS
LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March,
2023, the Statement of Profit and Loss (including other comprehensive income), statement
of changes in equity and 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 (hereinafter referred to as the "standalone financial
statements").
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 Companies Act, 2013, as amended ("the Act") in the
manner so required and give a true and fair view in conformity with the Indian Accounting
Standards prescribed under section 133 of the Act read with the Companies ( Indian
Accounting Standards ) Rules ,2015,as amended ( "IND AS") and other accounting
principles generally accepted in India, of the state of affairs of the Company as at March
31, 2023, its profit including other comprehensive profit, its cash flows and the changes
in equity for the year ended on that date.
Basis for 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 Standards are further described in
the Auditors Responsibilities for the Audit of the Standalone 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 (ICAI) together with the
independent requirement that are relevant to our audit of the standalone financial
statements under the provisions of the Act and the rules thereunder, and we have fulfilled
our other ethical responsibilities in accordance with these requirements and the ICAIs
Code of Ethics. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion on standalone fianncial statements.
Key Audit Matters
Key audit matter are those matters that, in our professional jugdement,
were of most significance in our audit of the standalone financial statements of the
current period. These matters were addressed in the context of our audit of the standalone
financial statments as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion in these matters.
Information other than the Standalone Financial Statements and
Auditors Report thereon
The Companys Board of Directors are responsible for the
preparation of the other information. The other information comprises the information
included in the the management discussion and analysis, Boards report including annexure
to Boards Report, Corporate Governance and Shareholders information, but does not include
the standalone financial statements and our auditors report thereon.
Our opinion on the standalone 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 standalone financial statements,
our responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the standalone financial statements or
other information obtained during the course of our 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 Board of Directors is responsible for the matters
stated in section 134(5) of the Act with respect to the preparation of these standalone
financial statements that give a true and fair view of the financial position, financial
performance, changes in equity and cash flows of the Company in accordance with teh IND AS
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 implementation and
maitenance of accounting policies; making judgements 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 these standalone
financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
In preparing the standalone 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.
Those Board of Directors are also responsible for overseeing the
companys financial reporting process.
Auditors Responsibility for the Audit of Standalone Financial
Statements
Our objectives are to obtain reasonable assurance about whether the
standalone financial statements as a whole are free from 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
exists. 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 standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the
standalone 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 financial controls relevant
to the audit in order to design audit procedures that are appropriate in the
circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing
our opinion on whether the 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 management.
• Conclude on the appropriateness of managements use of the
going concern basis 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 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
standalone financial statements, including the disclosures, and whether the standalone
financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
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 charged with governance, we
determine those matters that were of most significance in the audit of the standalone
financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditors report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on Other Legal and Regulatory Requirements
1 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 purpose of our audit.
(b) In our opinion, proper books of accounts 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, the Statement of Changes in Equity 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 Ind AS specified under section 133 of the Act.
(e) On the basis of the written representations received from Directors
as on 31st March, 2023 taken 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 A.
(g) With respect to the matters to be included in the Auditors 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 explanation given to us,
the remuneration paid by the company to its directors during the year is in accordance
with the provision of Section 197 of the Act.
(h) 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, in
our opinion and to the best of our information and according to the explanations given to
us:
i. The Company does not have any pending litigations which would impact
its financial position;
ii. The Company did not have any long-term contracts including
derivatives contracts for which there were any material foreseeable losses;
iii. There were no amounts which required to be transferred by the
Company to the Investor Education and Protection Fund.
iv. Proviso to rule 3(1) of the Companies ( Accounts ) Rules 2014 for
maintaining books of accounts using accounting software which has feature of recording
audit trail ( edit log ) facility is applicable to the Company with effect from April
1,2023 ,and accordinghly reporting under Rule 11(g) of the Companies ( Audit &
Auditors ) Rules 2014 is not appliacble for the financial year ended March 31,2023.
2 As required by the Companies (Auditors Report) Order, 2020 (the
Order) issued by the Central Government of India in terms of sub-sectiom (11) of Section
143 of the Companies Act, 2013 we give in Annexure B a statement on the matters
specified in paragraphs 3 and 4 of the Order, to the extent applicable.
For Avnish Sharma & Associates Chartered Accountants FRN - 009398N
Dinesh Manchanda (M.No. 097591)
Partner
UDIN: 23097591BGSHOG3194 Place : Chandigarh Dated : 16.05.2023
ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 1 (f) under Report on Other Legal and
Regulatory Requirements section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting
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 MEGASTAR FOODS LIMITED (the Company) as of March 31, 2023 in conjunction
with our audit of the standalone 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 establised 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 (the
Guidance Note). These responsibilities include the design, implementation and
maintenance of adequate internal financial controls that were operating effectively for
ensuring the orderly and effective 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 Act.
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 Standards on Auditing prescribed under section 143(10) of the Act and
the Guidance Note, to the extent applicable to an audit of internal financial controls.
Those Standards and the Guidance Note require that we comply with the ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether adequate
internal financial controls over financial reporting was establised and maintained and if
such controls operated effectively in all material respects.
An 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 expeditures 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
Rreporting
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
controls with reference to financial statements 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, to the best of our information and according to the
explanations given to us, 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 March 31, 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.
ANNEXURE B TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 2 under Report on Other Legal and Regulatory
Requirements section of our report of even date)
Reports on Companies (Auditors Report) Order, 2020 (the Order)
issued by the Central Government in terms of Section 143 (11) of the Companies Act, 2013
(the Act) of Megastar Foods Limited (the Company)
(i) (a) The company has maintained proper records showing full
particulars, including quantitative details and situation
of Property, Plant & Equipment on the basis of available
information.
(b) The company, during the year under consideration, did not own any
intangible asset.
(b) As explained to us, the Property, Plant and Equipment of the
Company have been physically verified by the management at reasonable intervals. According
to the information and explanation given to us by the management, no material
discrepancies have been noticed on such verification.
(c) The title deeds of immovable properties are held in the name of the
company.
(d) The Company has not revalued its property, plant and equipment
during the year ended March 31,2023.
(e) As explained to us, no proceedings have been initiated or are
pending against the company for holding any benami property under the Benami Transaction
(Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(ii) (a) Physical verification of inventory has been conducted at
reasonable intervals by the management and in our
opinion, the coverage and procedure of such verification by the
management is appropriate. No discrepancies of 10% or more in the aggregate for each class
of inventory were noticed during such verification.
(b) During the year, the company has been sanctioned working capital
limits in excess of five crores rupees, in aggregate, from banks or financial institutions
on the basis of security of current assets. The quarterly returns or statements filed by
the company with such banks or financial institutions are generally in agreement with the
books of account of the Company, the differences, if any are either not material or minor
in nature.
(iii) During the year, the company had granted unsecured loan to its
wholly owned subsidiary M/s Megapacific Ventures Pvt. Ltd. as covered in the register
maintained under section 189 of the Companies Act, 2013, in respect of which:
(a) The company has extended loan of Rs. 32.04 Crores to its wholly
owned subsidiary M/s Megapacific Ventures Pvt. Ltd. which is received back before the end
of financial year 31st March, 2023.
(b) In our opinion, the investments made and the terms and conditions
of the grant of loans, during the year, prima facie, not prejudicial to the Companys
interest.
(c) The schedule of repayment of principal and payment of interest has
been stipulated for the loans granted to subsidiary and the repayment/receipts are
regular.
(d) There are no amounts of loans granted to subsidiary company, which
are overdue for more than ninety days.
(e) There are no amount of loan outstanding as at year end.
(f) The Company has not granted any loans or advances in the nature of
loans, either repayable on demand or without specifying any terms or period of repayment
to companies, firms, Limited Liability Partnerships or any other parties.
The Company has not provided any guarantee or security or granted any
advances in the nature of loans, secure or unsecured, to companies, firms, Limited
Liability Partnerships or any other parties.
(iv) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Section 185 and 186 of the
Act in respect of grant of loans, making investments and providing guarantees and
securities, as applicable.
(v) In our opinion and according to the information and explanations
given to us, the Company has neither accepted any deposits from the public nor accepted
any amounts which are deemed to be deposits within the meaning of sections 73 to 76 of the
Companies Act and the rules made thereunder, to the extent applicable. Accordingly, the
requirement to report on clause 3 (v) of the Order are not applicable to the Company.
(vi) As informed to us, the maintenance of cost records has not been
specified by the Central Government under section 148(1) of the Companies Act, 2013 for
the business activities carried out by the Company. Thus reporting under clause 3(vi) of
the order is not applicable to the Company.
(vii) (a) According to the records of the company, undisputed statutory
dues including Provident Fund, Employees State
Insurance, Income-tax, Sales-tax, Service Tax, Goods and Service tax,
Custom Duty, Excise Duty, value added tax, cess and any other statutory dues to the extent
applicable, have generally been regularly deposited with the appropriate authorities.
According to the information and explanations given to us there were no outstanding
statutory dues as on 31st March, 2023 for a period of more than six months from the date
they became payable.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of income tax or goods and
service tax, provident fund, employees state insurance, income tax, sales tax,
service tax, custom duty, excise duty, value added tax, Cess and other statutory dues
which have not been deposited on account of any dispute.
(viii) According to the records of the company examined by us and as
per the information and explanation given to us, 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) According to the records of the company examined by us and as
per the information and explanations given to us,
the company has not defaulted in repayment of loans or other borrowings
or in the payment of interest thereon to any financial institution or banks or lender.
(b) According to the records of the company examined by us and as per
the information and explanations given to us, the Company has not been declared willful
defaulter by any bank or financial institution or government or any government authority.
(c) According to the records of the company examined by us and as per
the information and explanations given to us, the term loans were applied for the purpose
for which the loans were obtained.
(d) According to the records of the company examined by us and as per
the information and explanations given to us, on an overall examination of the financial
statements of the Company, no funds raised on short-term basis have been used for
long-term purposes by the Company.
(e) According to the records of the company examined by us and as per
the information and explanations given to us, on an overall examination of the financial
statements of the Company, the Company has not taken any funds from any entity or person
on account of or to meet the obligations of subsidiary company.
(f) According to the records of the company examined by us and as per
the information and explanations given to us, the Company has not raised loans during the
year on the pledge of securities held in its subsidiary company. Hence, the requirement to
report on clause (ix) (f) of the Order is not applicable to the Company.
(x) (a) According to the information and explanations given to us and
based on our examination of the records of the
company, the Company has not raised moneys by way of initial public
offer or further public offer (including debt instruments) during the year and hence
reporting under clause 3(x)(a) of the Order is not applicable.
(b) According to the information and explanations given to us, the
Company has not made any preferential allotment or private placement of shares or fully,
partially or optionally convertible debentures during the year. Accordingly, reporting
under Clause 3(x)(b) of the Order is not applicable to the Company.
(xi) (a) 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.
(b) No report under Section 143(12) of the Act has been filed with the
Central Government for the period covered by our audit.
(c) According to the information and explanations given to us, during
the year there are no whistle blower complaints received by the company during the year.
(xii) The Company is not a Nidhi Company and hence reporting under
clause 3(xii) of the Order is not applicable.
(xiii) In our opinion and according to the information and explanations
given to us, the Company is in compliance with Section 177 and 188 of the Act, where
applicable, for all transactions with related parties and the details of related party
transactions have been disclosed in the financial statements as required by the applicable
accounting standards.
(xiv) (a) In our opinion the Company needs strenghtening internal audit
system to commensurate with the size and the
nature of its business.
(b) We have considered the reports issued by the Internal Auditors of
the Company till date for the period under audit.
(xv) In our opinion during the year the Company has not entered into
any non-cash transactions with its directors or persons connected with its directors.
Hence provisions of section 192 of the Companies Act, 2013 are not applicable to the
Company.
(xvi) (a) In our opinion, the Company is not required to be registered
under section 45-IA of the Reserve Bank of India Act,
1934. Hence, reporting under clause 3(xvi)(a), (b) and (c) of the Order
is not applicable.
(b) According to the information and explanations given to us and based
on our examination of the records of the company, the Company has not conducted any
Non-Banking Financial or Housing Finance activities without obtained a valid Certificate
of Registration (CoR) from the Reserve Bank of India as per the Reserve Bank of India Act,
1934.
(c) According to the information and explanations given to us and based
on our examination of the records of the company, 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 3(xvi) (c) of the Order is not applicable to the Company.
(d) In our opinion, there is no core investment company within the
Group (as defined in the Core InvestmentCompanies (Reserve Bank) Directions, 2016) and
accordingly reporting under clause 3(xvi)(d) of the Order is not applicable.
(xvii) The company has not incurred cash losses in the financial year
and in the immediately preceding financial year.
(xviii) There has been no resignation of the statutory auditors during
the year. Accordingly, reporting under Clause 3(xviii) of the Order is not applicable to
the Company.
(xix) On the basis of the financial ratios, ageing and expected dates
of realization of financial assets and payment of financial liabilities, other information
accompanying the financial statements and 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 causes us to believe that any material
uncertainty exists as on the date of the audit report indicating 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 that
this is not an assurance as to the future viability of the Company. We further state that
our reporting is based on the facts up to the date of the audit report and we neither give
any guarantee nor any assurance that all liabilities falling due within a period of one
year from the balance sheet date, will get discharged by the Company as and when they fall
due.
(xx) According to the information and explanations given to us, the
Company does not have any unspent amount in respect of any ongoing or other than ongoing
project as at the expiry of the financial year. Accordingly, reporting under clause 3(xx)
of the Order is not applicable to the Company.
For Avnish Sharma & Associates Chartered Accountants FRN - 009398N
Dinesh Manchanda (M.No. 097591)
Partner
UDIN: 23097591BGSHOG3194 Place : Chandigarh Dated : 16.05.2023
+91-9892691696
