The Members of Source Natural Foods and Herbal Supplements Limited Report on theFinancial Statements
We have audited the accompanying financial statements of SOURCE NATURAL FOODS ANDHERBAL SUPPLEMENTS LIMITED (the Company) which comprise the Balance Sheet asat 31st March 2019 and the Statement of Profit and Loss for the year thenended and a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors are responsible for the matters stated in Section134(5) of the Companies Act 2013 with respect to the preparation and presentation of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance of the Company in accordance with the Accounting Standards referredto in Section 133 of the Act read with Rules 7 of the Companies( Accounts Rules 2014 Thisresponsibility maintenance of adequate accounting records in accordance with theprovisions of the Act for safeguarding the assets of the company and preventing anddetecting frauds and other irregularities selecting and application of appropriateaccounting policies : making judgements and estimates that are reasonable and prudent: anddesign implementation of adequate internal financial controls that were operatingeffectively for ensuring accuracy and completeness of the accounting records relevant tothe preparation and presentation of the financial statements that give a true and fairview and free from material misstatement whether due to fraud or error
Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal control relevant to the Company's preparation and fair presentation ofthe financial statements in order to design audit procedures that are appropriate in thecircumstances but not for the purpose of expressing an opinion on the effectiveness of theCompany's internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made bymanagement as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements
a) Predecessor auditor to audit transition adjustments
The comparative financial information of the company for the transition date openingbalance sheet as at 1st April 2015 prepared in accordance with Ind AS included in thesestandalone Ind AS financial statements have been audited by the predecessor auditor whohad audited the financial statements for the relevant period. The report of thepredecessor auditor on the opening balance sheet dated 27th May 2015 expressedan unmodified opinion.
In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
(a) in the case of the Balance Sheet of the state of affairs of the Company as at 31stMarch 2019; and
(b) In the case of the Statement of Profit and Loss of the PROFIT for the year endedon that date and the cash flows for the year ended on that date
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2015 (the Order)issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure a statement on the matters specified inparagraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act we report that:
a. we have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit;
b. in our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;
c. the Balance Sheet and Statement of Profit and Loss dealt with by this Report are inagreement with the books of account and returns ;
d. in our opinion the Financial Statements comply with the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies ( Accounts) Rules2014:
e. On the basis of written representations received from the directors as on 31st March2019 and taken on record by the Board of Directors none of the directors is disqualifiedas on 31st March 2019 from being appointed as a director in terms ofsub-section (2) of section 164 of the Act.
f. With respect to the adequacy of the internal financial Controls over Financialreporting of the Company and the operating effectiveness of the controls refer toseparate report in Annexure B
g. With respect to the other matters to be reported in the Auditors Report inaccordance with Rule 11 of the Companies ( Audit and Auditors ) Rules 2014 in our opinionand to the best of our information and according to explanation given to us .
(i) The company has disclosed in its notes to accounts the pending litigations and itseffect on the financial position of the company and the financial statement.
(ii) In our opinion as required by law or under the accounting standards there was nofurther material losses for which any provision was required and there were no long termcontracts including derivative contracts for which any provision for losses was required.
(iii) There were no monies that needed to be deposited in the Investor Education andProtection Fund of the Company
| ||For Srinaga & Giridharan |
| ||Chartered Accountants |
| ||Firm No.004013S |
| ||Sd/- |
| ||S.Giridharan |
|Place: Bangalore ||Partner (M. No.024011) |
|Dated: 29.05.2019 || |
ANNEXURE A TO THE AUDITORS' REPORT
The Annexure referred to in Independent Auditors' Report to the members of the Companyon the financial statements for the year ended 31 March 2019 we report that:
1. a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b. The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets.
c. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
2. a. The inventories have been physically verified during the year by the managementin our opinion and explanations furnished to us the frequency of verification isreasonable.
b. As explained to us information furnished to us there were no materialdiscrepancies reported on physical verification of inventories as compared to the recordsof stocks maintained by the company
3. The Company has not granted loans to any firms or any other parties covered in theregister maintained under section 189 of the Companies Act 2013 (the Act'.
4. The Company has not granted any loans investments guarantees and securitiescovered in the register maintained under sec. 185 and 186 of the Companies Act 2013.
5. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.
6. The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the services rendered by the Company.
7. a. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income-taxsales tax value added tax duty of customs service tax cess and other materialstatutory dues have been regularly deposited during the year by the Company with theappropriate authorities. As explained to us the Company did not have any dues on accountof employees' state insurance and duty of excise. According to the information andexplanations given to us no undisputed amounts payable in respect of provident fundincome tax sales tax value added tax duty of customs service tax cess and othermaterial statutory dues were in arrears as at 31 March 2019 for a period of more than sixmonths from the date they became payable.
b. According to the information and explanations given to us there are no dues of dutyof customs which have not been deposited with the appropriate authorities on account ofany dispute. However according to information and explanations given to us the followingdues of income tax sales tax duty of excise and value added tax have not been depositedby the Company on account of disputes:
|Sl. No. ||Name of the statute ||Nature of Dues ||Amount in Rs. ||Period to which amounting to ( FY) ||Forum Where dispute is pending |
|1. ||CST ||Non submission of Forms ||648161/- ||2014-15 ||CTO Commercial tax department |
8. The company has not defaulted in repayment of borrowings or loans to financialinstitutions banks Government according to explanation and information
provided to us for verification. There are no dues to debenture holders during theyear.
9. The company has not raised any moneys by way of initial public offer further publicoffer (including debt instruments) and term loans during the year as per information andexplanation furnished to us.
10. Based on the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and as per information and explanations given by themanagement we report that no fraud on or by the company has been noticed or reportedduring the course of our audit .
11. The Company has paid Managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Sec. 197 read with Schedule V of the Companies Act2013 as per information and explanations furnished to us for verification.
12. The Company is not a Nidhi Company hence this clause is not applicable.
13. According to information and explanations given to us and based on ourverification of the books all the related Party transactions are in compliance with theprovisions of Sections 177 and 188 of the Companies Act 2013 wherever applicable and allthe related party transaction have been properly disclosed in the financial statements forthe year as required by the applicable accounting standards.
14. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year.
15. The company has not entered into any non-cash transaction s with the directors orpersons connected with them during the year and hence the provisions of Section 192 ofthe Companies Act 2013 are not applicable.
16. The company is not required to be registered under Section 45-IA of the RBI Act asper information and explanations furnished to us.
| ||For Srinaga & Giridharan |
| ||Chartered Accountants |
| ||Firm No.004013S |
| ||Sd/- |
| ||S.Giridharan |
|Place: Bangalore ||Partner (M. No.024011) |
|Dated: 29.05.2019 || |
ANNEXURE B -TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONEFINANCIAL STATEMENTS
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
The Members of Source Natural Foods and Herbal Supplements Limited.
We have audited the internal financial controls over financial reporting of SourceNatural Foods And Herbal Supplements Limited (the Company) as of March 312019 in conjunction with our audit of the standalone financial statements of the Companyfor the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the Guidance Note) and the Standards on Auditing as specified under section143(1)) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists testing and evaluating the design andoperating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls system overfinancial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For Srinaga & Giridharan
Partner (M. No.024011)