Milkfood Ltd Auditor Reports

TO THE MEMBERS OF MILKFOOD LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Milkfood Limited ("the Company"), which comprise the standalone Balance Sheet as at March 31,2024, the standalone Statement of Profit and Loss (including Other Comprehensive Income), the standalone Statement of Changes in Equity and the standalone Statement of Cash Flows for the year ended on that date, notes to the standalone financial statements and summary of the 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 31,2024, the profit including total comprehensive income, changes in equity and its cash flows 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 Act. Our responsibilities under those Standards are further described in the Auditor?s 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 ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI?s Code of Ethics. 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.

Emphasis of matter:

Attention is drawn to the Note no 3C(i) regarding Scheme of Arrangement, Note no 6(ii) regarding Trade Receivables, Note No 8(iii) regarding advance to suppliers, Note No 12(ii) regarding GST, Note No 24(ii) regarding write back of security deposits, Note No 24(iii) item of exceptional nature, Note No 35(iii) where the Company has published standalone and consolidated financial results for the year ended 31.03.2024 and we have issued the report dated 30.05.2024 in pursuance of regulation 33 of SEBI (Listing obligation and disclosure Requirements) Regulations 2015. After publishing the results, certain adjusting events have occurred, which has resulted in deletion of contingent liabilities by Rs 2582 Lakhs. In the published results, the demand of ITC of IGST of Rs 1291 Lakhs created with an equivalent amount of penalty aggregating to Rs 2582 Lakhs under sec 74(1) r.w sec 122(i)(vii) of CGST Act, 2017 in respect of Moradabad plant was disclosed as contingent liability pursuant to the order of Additional Commissioner CGST (Meerut) dtd 13.03.2024. The Company had preferred an appeal against the said demand before CGST Appeals Meerut who vide order dtd 07.06.2024, has set aside the entire demand along with penalty. Therefore, the financial statements have been amended to that extent vide resolution of the Board dtd 25.06.2024 and the amount is shown as Nil. Company is of the view that it is neither required to adopt revised Financial Results for the period ended March 31,2024 under Regulation 33 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 nor the Company is required to revise the Financial Statements for the said period under section 131 of the Companies Act, 2013. We have relied upon the Company?s view.

Our opinion is not qualified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the year ended March 31,2024. These matters were addressed in the context of our audit of the standalone 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 addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor?s responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.

The Key Audit Matter	How the matter was addressed in our audit
The company operates in various states within India, exposing it to a variety of different Central and State Laws, regulations and interpretations thereof. In this regulatory environment, there is an inherent risk of litigation and claims.	Our procedures included:
Consequently, provisions and contingent liability disclosures may arise from direct and indirect tax proceeding, legal proceedings including regulatory and other government/ department proceedings, as well as investigations by authorities and commercial claims.	Understanding the process followed by the Company for assessment and determination of the amount of provisions and contingent liabilities relating to taxation, litigations and Claims.
	Evaluating the design and implementation and testing operating effectiveness of key internal controls around the recognition and measurement of provisions and re-assessment of contingent liabilities
	Reviewing the outstanding litigations against the Company for consistency with the previous years, enquire and obtain explanations for movement during the year.
	Discussing the status of significant known actual and potential litigations with the Company?s in-house officials and other senior management personnel who have knowledge of these matters and assessing their responses.
Sales Tax case pending with Rajasthan Tax Board
At March 31,2024, the Company?s contingent liabilities for legal matters were Rs. 78 Lakhs (refer Note 35 to the standalone financial statement) and provision for legal matters aggregated Nil. This represents tax of Rs.71 Lakhs levied u/s 47 of Rajasthan Sales Tax Act. 1994. The tax has been levied on account of non-deposit of sale tax by the consignment agent of the company. Department is of the view that liability of principal and agent is joint and several. The remaining Rs 7 Lakhs represent the claim against the company that have not been acknowledged as debt.	Perusing the latest correspondence between the Company and the various tax/legal authorities being the order passed by Appellate Authority-1 Jaipur, CTO Dated 22.12.2021 against which the company has filed a petition before the Rajasthan Tax Board Ajmer and review of correspondence with / legal opinions obtained by the management, from external legal advisors, wherever applicable, for significant matters and considering the same in evaluating the appropriateness of the Company?s provisions or disclosures on such matters.
	Examining the Company?s legal expenses and perusing the minutes of the board meetings, in order to ensure that all cases have been identified.
	Assessing the decisions and rationale for provisions held or for decisions not to record provisions or make disclosures.
	For those matters where management concluded that no provisions should be recorded, considered the adequacy and completeness of the Company?s disclosures.
GST Receivable
The Goods and Services Department had visited the premises of the company on 24.08.2020 to verify the transactions of the company with certain dealers who had supplied the raw materials to the company. The case was subsequently transferred to CGST Commissionerate at Meerut and CGST Commissionerate at Ludhiana.	We have verified the show cause notices received by the company in respect of the Moradabad range and Patiala Range, the order passed by Additional Commissionerate (CGST) Meerut dtd 13.03.2024 in case of Moradabad range creating the demand of 1291 Lakhs with an equivalent amount of penalty under Section 74(1) r.w Section 122(i)(vii) of CGST Act, 2017, the appeal filed by the company against the same and the appellate order passed dtd 07.06.2024 by CGST (Appeals) Meerut set aside the above demand and penalty amount.
The CGST Commissionerate at Meerut issued a Show-Cause Notice amounting to Rs. 25.51 crores for transactions in Moradabad Plant. During proceedings at Meerut the Additional Commissioner CGST was pleased to reduce the demand from Rs.25.51 crores to Rs.12.91 crores with an equivalent amount of penalty against which the company had filed an appeal before Commissioner CGST Appeals.	In respect of the Show Cause Notice of Rs. 7404 Lakhs received by the company from CGST Commissionerate Ludhiana for Patiala range, we have verified the detailed reply filed by the company. We have relied upon the assertions of the management.
The entire demand along with penalty has been set aside by the Commissioner CGST Appeals vide order dated 07.06.2024. CGST Commissionerate at Ludhiana has issued Show Cause Notice for Rs. 74.04 crores for transactions in Patiala Plant and CGST Commissionerate at Delhi issued Show cause notice of Rs.0.41 Cr and Jaipur CGST Commissionerate issued SCN of Rs.0.02 Cr. The Company is confident that the Show Cause Notices at Ludhiana, Delhi and Jaipur will also be vacated as the case is in parity with Meerut.
The judgment and estimates of the Company could change substantially overtime as new facts emerge as each legal case progresses.
Given the inherent complexity and magnitude of potential exposures and the judgment necessary to estimate the amount of provisions required or to determine required disclosures, this is a key audit matter.
Scheme of Amalgamation
During the year, scheme of Amalgamation between Triputi Infrastructure Pvt Ltd (Transferor Company) with Milkfood Ltd (Transferee Company) was duly approved by NCLT vide its order dated 16th April 2024 u/s 230 to 232 and other applicable provisions of the Companies Act, 2013 with effect from appointed date i.e. 01.04.2023, in pursuance of which the company is required to allot 9,66,960 equity shares in lieu of acquisition of the assets (including brand) and liabilities of the transferor company at a fair value in accordance with Ind AS 103- Business Combinations (acquisition method).	We have perused the scheme of amalgamation between the transferor company and transferee company approved by NCLT and verified that the accounting treatment of the merger of Assets and Liabilities including the Brand value has been done in accordance with Ind AS 103 - Business Combination (Acquisition Method).
Assets Held for Sale
During the year, company has reclassified the assets (previously classified as held for sale) into Property Plant and equipment at a carrying amount of Rs 143 Lakhs (WDV) and has disposed off equipment of Rs 100 Lakhs. Balance equipment which is held for sale is expected to be disposed off in the next financial year.	We have verified the agreement for sale of the assets held for sale for checking the advance received against the sale, items of the assets that have been disposed off, Board resolutions approving the said sale and have verified the accounting treatment in accordance with Ind AS 105 - Non Current Assets held for sale and discontinued operations.

Information Other than the Standalone Financial Statements and Auditor?s Report Thereon

The Company?s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Annual Report through Management Discussion and Analysis, Board?s Report including Annexures thereto, Business Responsibility Report, Corporate Governance and Shareholder?s Information, but does not include the standalone financial statements and our auditor?s report thereon. The Annual report. is expected to be made available to us after the date of this auditor?s report.

Our opinion on the standalone financial statements does not cover the other information and we will 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 identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and describe actions applicable under the applicable laws and regulations.

Management?s and Board of Directors Responsibility for the Standalone Financial Statements

The Company?s management and Board of Directors are 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 state of affairs, profit and total comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 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, the Management and Board of Directors are is responsible for assessing the Company?s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company?s financial reporting process.

Auditor?s Responsibilities for the Audit of the 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 auditor?s 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 scepticism 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 the Management and Board of Directors.

• Conclude on the appropriateness of Management and Board of Directors 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 Company?s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor?s 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 auditor?s 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.

Materiality is the magnitude of misstatements in the standalone 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 charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the year ended March 31,2024 and are therefore the key audit matters. We describe these matters in our auditor?s 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 purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books read with our remarks for certain matters in respect of audit trail as stated in paragraph 1(vi) below.

(c) The standalone balance sheet, the standalone statement of profit and loss including other comprehensive income, the standalone statement of changes in equity and the standalone 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 specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

(e) On the basis of the written representations received from the directors taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2024 from being appointed as a director in terms of Section 164 (2) of the Act;

(f) The modifications relating to the maintenance and other matters connected therewith in respect of audit trail are as stated in the paragraph 1(b) above on reporting under section 143 (3) (b) of the Act and paragraph 1 (vi) below on reporting under Rule 11 (g) of the Companies (Audit and Auditors) Rules,2014.

(g) With respect to the adequacy of the internal financial controls with reference to the standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B"; and

(h) With respect to the matters to be included in the Auditor?s Report under section 197(16) of the Act, in our opinion and according to information and explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under section 197 read with schedule V of the Act, The Ministry of Corporate Affairs has not prescribed other details under section 197(16) of the Act which are required to be commented upon by us.

(i) with respect to the other matters to be included in the Auditor?s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at 31 st March, 2024 on its financial position in its standalone financial statements. (Refer note 35 of financial statements)

ii. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;

iii. There has been no delay in transferring amounts which were required to be transferred, to the Investor Education and Protection Fund by the Company.

iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in any 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 (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("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;

(c) Based on the 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) of Rule 11 (e), as provided under (a) and (b) above, contain any material misstatement.

v. The interim dividend declared and paid by the Company during the year and until the date of this audit report is in compliance with Section 123 of the Act to the extent it applies to payment of dividend. (Refer Note 40 to the standalone financial statements.)

vi. Based on our examination which included test checks and in accordance with requirements of the Implementation Guide on Reporting on Audit Trail under Rule 11 (g) of the Companies (Audit and Auditors) Rules, 2014, the Company has used accounting software?s for maintaining its books of account, which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the respective software. Further, where audit trail (edit log) facility was enabled and operated throughout the year. We could not verify instance of audit trail feature being tampered with during the financial year 2023-24, during the course of audit and for this we relied upon the certificate of the management.

2. As required by the Companies (Auditor?s Report) Order, 2020 (the "Order") issued by the Central Government in terms of

Section 143(11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the

Order to the extent applicable.

Annexure - A to the Independent Auditors? Report

(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements? section of our report)

To the best of our information and according to the explanations provided to us by the Company and the books of account and records examined by us in the normal course of audit, we state that:

(i) In respect of Company?s Property, Plant and Equipment:

(a) The company is maintaining proper records showing full particulars, including quantitative details and situation of Property, Plant & Equipment.

(b) The Company has a regular programme of physical verification of Property, Plant and Equipment to cover all the items in a phased manner over a period of three years, which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the said programme, certain Property, Plant and Equipment were verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties (other than those that have been taken on lease and the lease agreements are duly executed in favour of the Company) disclosed in the standalone financial statements are held in the name of the Company. Original copies of title deeds have not been produced as the same are deposited as security with banks under loan agreement as confirmed by the management.

(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 any of its Property, Plant and Equipment (including Right of Use Asset) or Intangibles (which have been acquired through Business combination and valued at Fair Value) during the year.

(e) On the basis of the information?s and explanations given to us and examination of records, no proceedings have been initiated during the year or are pending against the Company as at March 31,2024 for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.

(ii) (a) The inventories (except Stock in Transit) were physically verified during the year by the Management at reasonable intervals. For stock in transit subsequent receipts have been linked with the inventory record. In our opinion and according to the information and explanations given to us, the coverage and procedure of such verification by the Management is appropriate having regard to the size of the Company and the nature of its operations. No discrepancies of 10% or more in the aggregate for each class of inventories were noticed on such physical verification of inventories between the physical stocks and book records.

(b) According to the information and explanations given to us, the Company has been sanctioned working capital limits in excess of Rs. 5 crores, in aggregate, throughout the year, from banks or financial institutions on the basis of security of current assets. In our opinion and according to the information and explanations given to us, the quarterly returns and statements comprising (stock statements, book debt statements, and statements on ageing analysis of the debtors) filed by the Company with such banks or financial institutions are in agreement with the unaudited books of account of the Company, of the respective quarters, except for the following:

(All Amounts in Rs Lakhs)

Quarter	Name of the Bank	Name of the Current Asset	As per Unaudited Books of Accounts	Amount as per Quarterly Return & Statements	Amount of Difference	Reason for Discrepancies
Q1	State Bank of India/ Canara Bank	Trade Receivable	4698	4643	55	The figures of outstanding trade receivables of Rs 50 Lakhs is less given in DP Statement and balance diff on account of rounding off .
	State Bank of India/ Canara Bank	Inventory Raw Material	2319	2080	239	On account of difference in adoption of purchase rates on FIFO basis for the purpose of bank whereas the same is considered on weighted average rates as per books.
	State Bank of India/ Canara Bank	Inventory Finished Goods	2251	2201	50	Consequent upon difference in valuation of raw material as stated above.
	State Bank of India/ Canara Bank	Inventory Stores & Spares	612	612	0	NA
Q2	State Bank of India/ Canara Bank	Trade Receivable	5378	5330	48	The figures outstanding trade receivables of Rs. 50 lakhs is less given in DP and balance on account of round off.
	State Bank of India/ Canara Bank	Inventory Raw Material	2582	2031	551	On account of difference in adoption of purchase rates on FIFO basis for the purpose of bank whereas the same is considered on weighted average rates as per books.
	State Bank of India/ Canara Bank	Inventory Finished Goods	994	1043	-49	Consequent upon difference in valuation of raw material as stated above.
	State Bank of India/ Canara Bank	Inventory Stores & Spares	540	540	Nil	N.A
Q3	State Bank of India/ Canara Bank	Trade Receivable	7119	7412	-293	Due to conversion charges receivable given in DP statement and not grouped in trade receivable
	State Bank of India/ Canara Bank	Inventory Raw Material	1760	1465	295	On account of difference in adoption of purchase rates on FIFO basis for the purpose of bank whereas the same is considered on weighted average rates as per books
	State Bank of India/ Canara Bank	Inventory Finished Goods	821	853	-32	Consequent upon difference in valuation of raw material as stated above.
	State Bank of India/ Canara Bank	Inventory Stores & Spares	383	390	-7	Round off diff
Q4	State Bank of India/ Canara Bank	Trade Receivable	7725	7741	-16	Rs 10 Lakhs provision for expected credit loss and Rs. 5 lakhs written off on account of bad debts.
	State Bank of India/ Canara Bank	Inventory Raw Material	1791	1751	40	On account of difference in adoption of purchase rates on FIFO basis for the purpose of bank whereas the same is considered on weighted average rates as per books.
	State Bank of India/ Canara Bank	Inventory Finished Goods	921	941	-20	Consequent upon difference in valuation of raw material as stated above.
	State Bank of India/ Canara Bank	Inventory Stores & Spares	361	373	-12	Rs 4 lakhs packing material W/O and rest on account of estimation difference.

(iii) (a) The Company has not made 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 partnership or any other parties during the year except an aggregate amount Rs 22 Lakhs as interest free loan given to the employees in the ordinary course of business. The Balance outstanding as at the end of the year are Rs 26 Lakhs. Further company has not given any advance in the nature of loan to any party during the year.

(b) Loan to employees of Rs 22 Lakhs granted during the year are in the ordinary course of the business as per policy of the company and hence prima facie not prejudicial to the interest of the company.

(c) Stipulations in respect of loans granted to the employees have been laid out and the repayments are regular.

(d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there are no overdue amounts outstanding for a period more than ninety days in respect of loans given to employees as stated above.

(e) No loan granted by the Company during the year which has fallen due has been renewed or extended or fresh loans granted to settle the over dues of existing loans given to the same parties.

(f) 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 granted any loans or advances in the nature of loan either payable on demand or without specifying the terms or period of payments. and hence reporting under this clause is not applicable.

(iv) According to the information and explanations given to us and on the basis of our examination of the records of the Company, it has not provided any guarantee or security as specified under section 185 or 186 of the Act. In respect of loans given, in our opinion the provisions of section 185 and 186 are complied with. Company has not made any investment during the year.

(v) The Company has not accepted any deposit during the year. There are no amounts which are deemed to be deposits. Hence, reporting under clause 3(v) of the Order is not applicable. It is also confirmed by the company that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal.

(vi) According to the information and explanations given to us and on the basis of our broad review of the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2014 prescribed by the Central Government under Section 148(1) of the Companies Act, 2013 in respect of manufacture of Milk Powder we are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

(vii) In respect of statutory dues:

(a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the company has generally been regular in depositing undisputed statutory dues including Goods and Service tax, Provident Fund, Employees State insurance, income tax, cess and other material statutory dues applicable to it with the appropriate authorities. The Company does not have a liability during the year in respect of sales tax, service tax, duty of customs, duty of excise, value added tax, since they have been subsumed in GST with effect from 1st July 2017. According to the information and explanations given to us and on the basis of examination of records of the Company, there were no undisputed amounts payable in respect of the aforesaid statutory dues in arrears as at 31.03.2024 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no statutory dues as referred to in sub clause (a) which have not been deposited as at 31.03.2024 on account of any dispute other than disclosed as below:

Name of the Statute	Nature of Dues	Net Amount (Rs. in Lakhs]	Amount paid under protest (Rs. In Lakhs)	Period to which the Amount Relates	Forum where dispute is pending
FSSAI Act	Fine	4.50	Nil	2021-22	Court of ADJ (Jaipur)
FSSAI Act	Fine	2.00	1	2021-22	Court of ADJ (Agra)

(viii) According to the information and explanations given to us and on the basis of our examination of the records 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

(ix) (a) The Company has not defaulted in the repayment of the Loans and interest thereon to any lender.

(b) The Company has not been declared wilful defaulter by any bank or financial institution or any other lender.

(c) According to the information and explanations given to us, Company has applied the term loans (Including working capital term loans) for the purposes for which the same have been obtained.

(d) The long term sources of funds comprising of Share capital, Reserves and Surplus and long term loans (including security deposits payable after one year) are higher than the Long term application of funds comprising of PPE, CWIP and Biological assets. However, the current ratio is 1.25 times. Therefore, in our opinion on overall examination of balance sheet of the company, no funds raised on short term basis have been utilised for long term purposes.

(e) According to the information and explanations given to us and on overall examination of standalone financial statements, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiary, associates or joint ventures as defined under the Act.

(f) According to the information and explanations given to us, the Company has not raised any loan on the pledge of securities held in its subsidiary, associates or joint ventures, hence the requirement of reporting under this clause is not applicable.

(x) (a) The Company has not raised any 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 and on examination of records, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully or partly or optionally) during the year, hence reporting under clause 3(x)(b) of the Order is not applicable.

(xi) (a) According to the information and explanations given to us and on examination of records, considering the principle of materiality outlined in the Standards of Auditing, to the best of our knowledge no fraud by or on the Company has been noticed or reported during the year.

(b) According to the information and explanations given to us, no report under sub-section (12) of section 143 of the Companies Act has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year and up to the date of this report.

(c) As represented by the Management, there was no whistle blower complaints received by the Company during the year (and upto the date of this audit report).

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

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company and as certified by the management, 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 notes to standalone financial statements, as required by the applicable accounting standards.

(xiv) a) In our opinion the Company has an adequate internal audit system commensurate with the size and the nature of its business. However, the system needs to be further strengthened in terms of scope and coverage.

b) We have considered, the internal audit reports for the year under audit, issued to the Company during the year and till date, in determining the nature, timing and extent of our audit procedures. As per internal audit reports, internal controls in respect of certain areas need to be further strengthened.

(xv) As per the information available and to the best of our knowledge 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 and 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) and (b) of the Order is not applicable. The company is not a core investment company (CIC) as defined in the Regulations framed by RBI and hence, reporting under clause 3(xvi) (c) of the Order is not applicable.

(b) In our opinion and as certified by the management, there is no core investment company within the Group (as defined in the Core Investment Companies (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 during the financial year covered by our audit and in the immediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors of the Company during the year. Accordingly, clause 3 (xviii) of the order is not applicable.

(xix) On the basis of the financial ratios disclosed in note 42 of the standalone financial statements, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the standalone 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) (a) There are no unspent amounts towards Corporate Social Responsibility (CSR) on other than ongoing projects requiring a transfer to a Fund specified in Schedule VII to the Companies Act in compliance with second proviso to sub-section (5) of Section 135 of the said Act. Accordingly, reporting under clause 3(xx)(a) of the Order is not applicable for the year.

(b) The Company has spent the required amount u/s 135(5) towards corporate social responsibility by way of contribution to Prime Minister?s National Relief Fund as prescribed under schedule VI of the Companies Act 1956 (disclosed in note 41) of the standalone financial statements) and hence reporting under the clause 3(xx)(b) is not applicable.

Annexure - B to the Auditors? Report

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 Milkfood Limited ("the Company") as of 31 March 2024 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management?s Responsibility for Internal Financial Controls

The Company?s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI?). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company?s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors? Responsibility

Our responsibility is to express an opinion on the Company?s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing as prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor?s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company?s internal financial controls system over financial reporting with reference to these standalone financial statements.

Meaning of Internal Financial Controls over Financial Reporting

A company?s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A company?s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company?s assets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting with reference to these standalone financial statements and such internal financial controls over financial reporting were operating effectively as at 31 March 2024, except in certain areas which need to be further strengthened, 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 Madan and Associates
	Chartered Accountants
	Firm?s registration number: 000185N
	M.K. Madan
Place : New Delhi	(proprietor)
Date : 25-06-2024	Membership number: 082214
	UDIN: 24082214BKEIWO2663