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, 2025, the Statement of Profit and
Loss(including Other Comprehensive Income), the Statement of changes in Equity and the Statement of Cash
Flows for the year then ended and notes to the financial statements, including a summary of Material
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 so required and give a true and fair
view in conformity with the accounting principles generally accepted in India, of the state of affairs of the
Company as at 31 March 2025, and its Loss, total comprehensive Loss, the changes in equity and its cash
flows for 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 Auditor’s Responsibilities for the Audit of the Financial Statements section of our
report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of
Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the
financial statements under the provisions of the Companies Act, 2013 and 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 97.57 lakhs (PY Rs.97.57 lakhs) in case of
one debtor Maiyas Beverage and Foods Private Limited which was referred to NCLT under Indian
Bankruptcy Code and NCLT has passed the order on 10th May, 2019. As per NCLT order only
15.14% amount is payable to all the Sundry Creditors of Maiyas Beverage and Foods Private
Limited. The Company’s 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 Company’s Loss
is understated and Sundry debtors are overstated by Rs.97.57 lakhs (PY Rs.97.57 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
|
|
Refer to note 6 to the financial statements.
|
the management’s
|
|
The value of inventory is a key audit matter
due to involvement of high risk, basis the
nature of the food industry wherein value per
unit is relatively insignificant but high volumes
are involved which are dispersed across
different point of sales.
|
assumptions applied in calculating the value of the
inventories and related provisions by:
• Completed a walkthrough of the inventory valuation
process and assessed the design and
implementation of the key controls addressing the
risk.
|
|
Our audit procedures on the valuation and
|
|
existence of inventories consisted mainly of
|
• Verifying the effectiveness of key inventory controls
|
|
the following:
|
operating over inventories; including sample based
physical verification.
|
|
• The inventories of the Company amounted
|
•
|
Verify that the adequate cut off procedure has been
|
|
to 4,984.56 lakhs as on 31st march 2025.
|
|
applied to ensure that purchased inventory and sold
inventory are correctly accounted.
|
|
• Our audit of inventories was focused
|
|
|
around the risk that there would be a
|
•
|
Reviewing the document and other record related to
|
|
material misstatement relating to the
|
|
physical verification of inventories done by the
|
|
existence of inventories and that the
|
|
management during the year.
|
|
valuation of inventories which involves
|
•
|
Verify that inventories are valued in accordance with
|
|
judgement of the management.
|
|
Ind AS 2
|
| |
•
|
As for the valuation of inventories, we assessed and
|
|
• According to the standalone financial
|
|
reviewed the controls relating to valuation. For
|
|
statements’ accounting policies in note 47
|
|
materials and supplies, we compared the price
|
|
(2.2) to the financial statements,
|
|
recognized in the balance sheet to the latest purchase
|
|
inventories are measured at the lower of
|
|
invoice, to ensure that the inventory of materials and
|
|
cost or net realizable value. The company
has procedures for identifying risk for
obsolescence inventories based on
|
|
supplies is valued in accordance with the accounting
policies applied.
|
|
estimated usage and shelf life of products.
|
•
|
Verifying for a sample of individual products that costs
have been correctly recorded.
|
|
• To ensure that all inventories owned by
the entity are recorded and recorded
inventories exist as at the year-end and
|
•
|
Comparing the net realisable value to the cost price of
inventories to check for completeness of the
associated provision.
|
|
valuation has been done correctly.
|
•
|
Reviewing the historical accuracy of inventory
provisioning and the level of inventory write-offs during
the year.
|
| |
|
Our Conclusion:
Based on the audit procedures performed we did not
identify any material Exceptions in the Inventory valuation
|
|
B. Revenue Recognition
|
|
|
|
Refer to Note 23 to the financial statements.
|
|
Our key audit procedures around revenue recognition
|
|
The revenue of the Company consists
primarily of sale of food products that are
sold through distributors, modern trade
and direct sale channels amongst others.
Revenue is recognized when the control
of products is transferred to the customer
and there is no unfulfilled obligation.
Depending on the contractual terms with
|
•
|
included, but were not limited to, the following:
Performed substantive testing on selected samples of
revenue transactions recorded during the year by
testing the underlying documents including contracts
for conversion charges and soudha settlement,
invoices, goods dispatch notes, shipping documents
and customer receipts, wherever applicable;
|
|
the customers, this can be either at the
time of dispatch or delivery of goods.
|
•
|
Performed analytical review procedures on revenue
recognised during the year to identify any unusual
and/or material variances;
|
|
The Company has large number of
customers and the sales contracts with
|
•
|
Performed confirmation and alternative procedures on
|
|
customers have different terms relating to
|
|
selected invoices outstanding as at the year-end; and
|
|
transfer of control of underlying goods and
|
|
examining whether money is actually received or
|
|
the right of return.
|
|
income is reversed back in case of settlement
|
|
Owing to the volume of sales
|
|
contracts;
|
|
transactions, size of the distribution
|
•
|
Tested a select sample of revenue transactions
|
|
network and varied terms of contracts with
|
|
recorded before the financial year end date to
|
|
customers, revenue is determined to be
|
|
determine whether the revenue has been recognised
|
|
an area involving significant risk in line
with the requirements of the Standards on
|
|
in the appropriate financial period;
|
|
Auditing and hence, requiring significant
|
•
|
Examine a sample of manual journal entries posted to
|
|
auditor attention.
|
|
revenue ledgers to identify any unusual items; and
|
|
The management is required to make
|
•
|
Evaluated the appropriateness and adequacy of
|
|
certain key judgements around
|
|
disclosures in the financial statements in respect of
|
|
determination of transaction price in
|
|
revenue recognition in accordance with the applicable
|
|
accordance with the requirements of Ind
AS
|
|
requirements.
|
|
115, Revenue from Contracts with
Customers along with Conversion
Charges and settlement of Soudha on
cancellation of the contract, and on
account of consideration payable to
customers in the form of various discount
schemes, returns and rebates.
|
Our conclusion:
Based on the audit procedures performed we did not
identify any material exceptions in the recognition of
revenue and incentives and discount expenses.
|
|
The Company and its external
stakeholders focus on revenue as a key
performance indicator and this could
create an incentive for revenue to be
overstated or recognized before control
has been transferred. Considering the
aforesaid significance to our audit and the
external stakeholders, revenue
recognition has been considered as a key
audit matter for the current year’s audit.
|
|
Information other than the Financial Statements and Auditor's Report Thereon
The Company’s Board of Directors is responsible for the other information. The other information comprises the
information included in the Board’s Report including Annexure to the Board’s Report, but does not include the
financial statements and our auditor’s report thereon. The Company’s annual report is expected to be made
available to us after the date of this auditor’s 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 Company’s 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 equity of the Company in accordance with the Indian Accounting standards (Ind AS)
prescribed under section 133 of the Act, read with the Companies (Indian Accounting standards)Rules, 2015,
as amended, and 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 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 or error.
In preparing the financial statements, management 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 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 company’s financial reporting
process.
Auditor’s Responsibility for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the 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 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(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.
• Conclude on the appropriateness of management’s 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 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 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 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.
Emphasis of Matter
1. We draw attention to the following:
a) The Company is having Debtors outstanding for more than 1 year amounting to Rs. 27.02 lakhs, for
more than 2 years amounting to Rs. 32.73 lakhs and more than 3 years amounting to Rs. 377.59 lakhs
(including disputed debtors of Rs. 178.86 lakhs) but no provision for Bad Debt has been made on the
same as the Company is confidence of receiving the amount.( Refer Note No.7 of the Financial
statements).
b) The company has consumed Packing material during the year for Rs. 278.09 Lakhs (PY Rs. 259.49
Lakhs), where as stock at the year end of packing material is Rs. 1,076.03 Lakhs ( PY of Rs. 953.05),
which is very high compared to the consumption (Refer Note No. 6 and 25 of the financial statements).
Our Audit opinion is not modified for the above matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”), issued by the Central
Government of India in terms of sub-section (11) of section 143 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 belief were necessary for the purposes of our audit.
b. Except for the effect of the matters described in basis 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 Equity and the Statement of Cash Flow dealt with by this Report are in
agreement with the books of account.
d. In our opinion, the aforesaid 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, 2025
taken on record by the Board of Directors, none of the directors is disqualified as on 31st March,
2025 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 company’s internal financial controls over financial reporting.
g. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule
11 of the Companies (Audit and Auditors) Rules, 2014, as amended, 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 which could impact its financial
position as mentioned in Note No.34 to financial statement
ii. The Company did not have any long-term contracts including derivatives contracts for which
there were any material foreseeable losses.
iii. 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
transferring amount.
iv. a. The management has represented that, to the best of its knowledge and belief, no funds
have been advanced or loaned or invested (either from borrowed funds or share premium or
any other source or kind of funds) by the Company to or in any other persons or entities,
including foreign entities (“Intermediaries”), with the understanding, whether recorded in
writing or otherwise ,that the Intermediary shall:
• directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever(“Ultimate Beneficiaries”) by or on behalf of the Company or
• provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
b. The management has represented, that, to the best of it’s 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 Beneficiaries”) 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 believe that the
representations under sub-clause iv(a) and iv(b) contain any material mis-statement.
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
v. The company has not declared dividend during the year.
vi. Based on our examination, which included test checks, the company has used accounting
software for maintaining its books of account which has a feature of recording audit trail (edit
log) facility and the audit trail has been made operational during the year for all relevant
transactions recorded. Further, during the course of our audit we did not come across any
instance of audit trail being been tampered with.
Additionally, the audit trial has been preserved by the company as per the statutory
requirements for records retention.
h. With respect to the matter to be included in the Auditor’s Report under Section 197(16) of the Act
as Amended:
In our opinion and according to the information and explanations given to us, the remuneration paid
by the Company to its directors during the current year is in accordance with the provisions of
Section197 of the Act. The remuneration paid to any director is not in excess of the limit laid down
under Section 197 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.
For G R V & P K.
Chartered Accountants
FRN.008099S
Kamal Kishore
Partner
M N.205819
UDIN: 25205819BMKUHY5883
Place: Bangalore
Date: 29-05-2025
| 