We have audited the financial statements of M/s Jhandewalas Foods Limited ("the Company"), which
comprise the balance sheet as at 31st March 2025, and the statement of Profit and Loss and statement of
cash flows for the year ended, and notes to the financial statements, including a summary of significant
accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the
aforesaid financial statements give the information required by the Act in the manner so required subject
to matter specified in basis of qualification paragraph 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 31st March,
2025, its profit and its cash flows for the year ended on that date.
Basis for Qualified Opinion
i. The company's decision not to provision for interest on the credit facility from Axis Bank,
Acme Resources Pvt. Ltd., and Dewan Housing Finance Ltd. is based on the classification of
its account as a Non-performing Asset (NPA). According to the Reserve Bank of India's
guidelines, interest on NPAs is not recognized on an accrual basis but is booked as income
only when it is actually received. This means that if the account is classified as NPA, the
interest cannot be accrued in the financial statements. In the case of Axis Bank, which has
initiated a recovery suit with the Debt Recovery Tribunal (DRT) in Jaipur, the outcome of this
legal action may influence the company's financial reporting and provisioning practices. The
status of the suit, still pending, suggests that the financial implications are yet to be
determined. It is crucial for companies to closely monitor such proceedings and update their
financial records in accordance with the evolving legal situation and regulatory guidelines.
We conducted our audit 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 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 there under. 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
qualified opinion.
Emphasis of Matters
Emphasis of matters are those matters that, in our professional judgment which considers it necessary to
Draw Users attention to a matter or matters presented or disclosed in the financial statements that are of
such importance that they are fundamental to users'.
We have determined the matters described below to be the Emphasis of matters to be communicated in
our report which are as follows: -
i. During the period from April 1, 2024 to September 30, 2024, the Company undertook a
preferential allotment of 30,00,000 equity shares and 29,50,000 convertible warrants to both
non-promoters and promoters at an offer price of ^71 per instrument. The Company received
^2,130 lakhs towards equity shares and ^524 lakhs towards warrants (being 25% of the total
warrant consideration) between June 1, 2024 and June 8, 2024.
Subsequently, during the period from June 2024 to September 2024, the Company extended
loans and advances aggregating ^393.19 lakhs to certain relatives of directors who were also
shareholders and allottees of the said preferential warrants. These transactions indicate a
potential linkage between the funds received from the preferential allotment and the
subsequent advances to related parties.
Based on the information available, it appears that such transactions fall within the purview of
Section 185 of the Companies Act, 2013, which restricts the Company from advancing loans to
directors or to any person in whom a director is interested, without obtaining the requisite prior
approval through a special resolution. While the Company has taken steps to recover the said
advances before March 31, 2025, the contravention of Section 185 occurred during the financial
year under audit.
ii. The financial analysis of the balance sheet reveals a significant concern regarding asset
ownership. With fixed assets reported at Rs. 9.33 Crores, the distinction between Immovable
and Movable assets is crucial. Immovable assets account for Rs. 5.92 Crores, yet a staggering Rs.
5.76 Crores of these assets lack proper title deeds in the company's name. This discrepancy
suggests that the company does not have legal claim over the majority of its Immovable assets.
Consequently, the actual assets held by the company amount to Rs. 2.50 Crores, all of which are
Movable assets. It is essential for the company to address this issue promptly to ensure accurate
representation of asset ownership and to maintain financial integrity.
iii. We draw attention to Note No. 10 of the Notes to accounts, which states that during the year,
the Company has written off certain trade payables. A portion of these pertains to parties with
whom the balances are disputed and remain unresolved as at the reporting date. As represented
by the management, the said reversals have been effected on account of quality differences and
stock damage.
Our opinion is not modified 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 of the current period. 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. We have determined the matters
described below to be the key audit matters to be communicated in our report.
Key Audit Matter
|
Key audit matters
|
How our audit addressed the key audit matter
|
|
1. Trade receivables and contract assets (as described in note 6 of the standalone financial
statements)
|
|
As at March 31, 2025, the V
Company has outstanding trade
receivables of Rs. 607.71 Lakhs
which represents approximately
10% of the total assets of the
Company.
In assessing the recoverability of
the trade receivables and
determination of allowance for
expected credit loss,
management's judgement
involves consideration of aging
status, historical payment
records, evaluation of claims for
deficiencies/ defective parts, the
likelihood of collection based on
the terms of the contract.
We considered this as key audit
matter due to the materiality of
the amounts and significant
estimates and judgments as
stated above.
|
Our audit procedures included the following:
The process of auditing trade receivables and contract
assets involves a comprehensive examination of the
management's control mechanisms. By assessing the
design and operational effectiveness of these controls,
auditors can determine the accuracy of the recognition
and the potential recoverability of these assets. Detailed
testing of relevant contracts and documentation,
alongside the analysis of subsequent settlements,
provides insight into the material balances and the
fulfillment of future obligations. Ageing analysis of
receivables at year-end, juxtaposed with contractual
payment milestones, aids in the accurate classification of
dues. For balances past due, a deeper dive is warranted,
involving the verification of customer acceptances,
examination of historical payment trends, and direct
correspondence with customers. Additionally, evaluating
the design, implementation, and operational
effectiveness of internal controls over credit loss
allowances is crucial to ensure that the management has
a robust system in place to mitigate credit risk.
|
|
2. Procurement of Raw Materials and Valuation of Inventories
|
|
We identified procurement of
Raw material and valuation of
inventories as a key audit matters
because of significance of costs
incurred during the year, related
inventories as at reporting date
and significant degree of
management judgment involved
|
The evaluation of the design and operating effectiveness
of internal controls over procurement and inventory is a
critical aspect of financial auditing. By employing a
combination of inquiry, observation, re-performance,
and inspection of evidence, auditors can gain assurance
that the controls are functioning as intended.
Substantive testing of purchase transactions through
verification of underlying documents like supplier
|
|
|
in verification and valuation
thereof considering perishable
nature of inventory.
|
invoices and goods receipt notes further substantiates
the reliability of financial records. Observing the
inventory valuation process and re-computing inventory
rates ensure that the accounting policies are consistently
applied and that the financial statements reflect a true
and fair view. Understanding the data and estimates
used in calculating yield ratios, especially in comparison
with prior periods, allows for the assessment of
consistency and reasonableness in inventory accounting.
Cut-off testing is essential to verify that transactions are
recorded in the correct accounting period, which is
crucial for the accuracy of period-end financial reporting.
Lastly, scrutinizing manual journal entries for purchases
helps in identifying any unusual or non-recurring items
that may require further investigation. These procedures
collectively contribute to a thorough audit and help in
maintaining the integrity of financial reporting.
|
|
|
3. Related Party Transaction
|
|
The Company has entered into
several transactions with related
parties during the year 2024-25.
We identified related party
transactions as a key audit
matter because of risks with
respect to completeness of
disclosures made in the financial
statements including
|
In view of the significance of the matter we applied the
following audit procedures in this area, among others to
obtain sufficient appropriate audit evidence:
The audit procedures we have outlined are
comprehensive and adhere to the stringent
requirements necessary for a thorough examination of
related party transactions. By assessing key controls and
compliance with relevant regulations, we are ensuring
|
|
recoverability thereof;
compliance with statutory
regulations governing related
party relationships such as the
Companies Act, 2013 and SEBI
Regulations and the judgment
involved in assessing whether
transactions with related parties
are undertaken at arms' length.
|
that all related party relationships and transactions are
properly identified and disclosed. The reliance on legal
opinions for matters of interpretation is a prudent
approach, adding an extra layer of scrutiny to the audit
process. Furthermore, the inspection of ledgers,
agreements, and statutory registers for completeness
and existence of related party transactions demonstrates
a meticulous attention to detail. This rigorous approach
not only satisfies the requirements of the Companies
Act, 2013, but also instills confidence in the accuracy and
transparency of the financial statements.
|
|
|
4. Litigations, provisions and contingencies
|
|
|
The Company recognizes a
provision when it has a present
obligation (legal or constructive)
as a result of a past event, it is
probable that an outflow of
resources embodying economic
benefits will be required to settle
the obligation and a reliable
|
In view of the significance of the matter we applied the
following audit procedures in this area, among others to
obtain sufficient appropriate audit evidence:
1. We tested the effectiveness of key controls around the
recording and assessment of litigations, provisions and
contingent liabilities.
2. We used subject matter experts, wherever required to
assess the value of the provisions and contingent
|
|
|
estimate can be made of the
amount of the obligation. A
disclosure for contingent
liabilities is made where there is a
possible obligation or a present
obligation that may probably not
require an outflow of resources.
When there is a possible or a
|
liabilities in light of the nature of the exposures,
applicable regulations and related correspondences with
the authorities.
3. Obtained Company's assessment of the open cases
and compared the same to the assessment of subject
matter experts, wherever necessary, to assess the
reasonableness of the provision or contingency.
4. Considered the adequacy of the Company's
|
|
present obligation where the
|
disclosures made in relation to related provisions and
|
|
likelihood of outflow of resources
|
contingencies in the financial statements.
|
|
is remote, no provision or
disclosure is made. We have
identified litigations, provisions
and contingencies as a key audit
matter because it requires the
Company to make judgments and
estimates in relation to the
exposure arising out of litigations.
The key judgment lies in the
estimation of provisions where
they may differ from the future
obligations.
|
|
Information other than the financial statements and auditors' 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 Director's Report and Corporate Governance Compliances but does not
include the financial statements and our auditor's report thereon.
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 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.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial
Statements
The Company's 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 and cash flows of the Company in accordance with the accounting principles generally
accepted in India, including the Accounting Standards (Ind AS) specified under section 133 of the Act. 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 and application
of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring
the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
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.
That Board of Directors are also responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities 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
skepticism 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)® of the Companies Act, 2013, 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 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 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 standalone financial statements that, individually or in
aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the
standalone 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 standalone 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.
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 B', 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) 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 and the Cash Flow Statement dealt with
by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid financial statements comply with the Accounting Standards (Ind
AS) specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts)
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 with reference to financial
statements of the Company and the operating effectiveness of such controls, refer to our
separate Report in 'Annexure A'.
g) With respect to the matter to be included in the Auditor's Report under section 197(16), 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
section 197 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) which are required to be commented upon by us.
h) 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 pending litigations and the impact on its financial position -
refer note 8 to the Standalone 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 were no 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 it's knowledge and belief, other
than as disclosed in the notes to the accounts, no funds 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(s) or entity(ies), including foreign entities
("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that
the Intermediary shall, whether, directly or indirectly lend or invest in other persons or
entities identified in any manner whatsoever by or on behalf of the company ("Ultimate
Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries;
(b) The management has represented, that, to the best of it's knowledge and belief, other
than as disclosed in the notes to the accounts, no funds have been received by the
company from any person(s) or entity(ies), including foreign entities ("Funding Parties"),
with the understanding, whether recorded in writing or otherwise, that the company shall,
whether, directly or indirectly, lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
(c) Based on such audit procedures 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 mis-statement.
v.
i. The company has not proposed any Final dividend during the year.
ii. The company has not proposed any interim dividend during the year.
iii. The board of directors of the company has not proposed any final dividend which
requires approval of member at the ensuing annual general meeting.
vi. As proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the
company w.e.f. April 1, 2023, the Company has used accounting software 'Tally Prime
System' for maintaining its books of account which has a feature of recording audit trail
facility. The feature of recording of audit trail was enabled by the company from 31st
October 2022 and the same has been operated thereafter for all transactions recorded in
the software and the audit trail feature has not been tampered with and the audit trail has
been preserved by the Company as per the statutory requirements for record retention.
For,Jain Chowdhary& Co.
Chartered Accountants
FRN: 0113267W
Place:- Jaipur CA Yogendra Kumar Lokanda
Date: - 15.05.2025 (Partner )
UDIN:25416484BMJBAW4593 Membership No:416484
| 