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Vidhi Specialty Food Ingredients Ltd.

BSE: 531717 Sector: Industrials
NSE: VIDHIING ISIN Code: INE632C01026
BSE 00:00 | 24 Apr 2020 Vidhi Specialty Food Ingredients Ltd
NSE 05:30 | 01 Jan 1970 Vidhi Specialty Food Ingredients Ltd

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OPEN 59.75
PREVIOUS CLOSE 60.85
VOLUME 17617
52-Week high 83.00
52-Week low 38.75
P/E 9.47
Mkt Cap.(Rs cr) 300
Buy Price 60.00
Buy Qty 1331.00
Sell Price 63.00
Sell Qty 100.00
OPEN 59.75
CLOSE 60.85
VOLUME 17617
52-Week high 83.00
52-Week low 38.75
P/E 9.47
Mkt Cap.(Rs cr) 300
Buy Price 60.00
Buy Qty 1331.00
Sell Price 63.00
Sell Qty 100.00

Vidhi Specialty Food Ingredients Ltd. (VIDHIING) - Auditors Report


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Company auditors report

To the Members of Vidhi Specialty Food Ingredients Limited

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying Ind-AS financial statements of Vidhi Specialty FoodIngredients Limited ("the Company") which comprises of the Balance Sheet asat 31 March 2019 the Statement of Profit and Loss (including other comprehensiveincome) the Statement of Changes in Equity and the Statement of Cash Flows for the yearended a summary of the significant accounting policies and other explanatory information(hereinafter referred to as "Ind AS financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements gives a true and fair view inconformity with the aforesaid accounting standard and other accounting principlesgenerally accepted in India prescribed under Section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended and other accountingprinciples generally accepted in India of the state of affairs of the Company as at 31March 2019 the profit and total comprehensive income changes in equity and its cashflows for the year ended on that date.

Basis for Opinion

We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Ind AS Financial Statements section of our report.We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the Ind AS financial statements under theprovisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the financial statements.

Key Audit Matters

Sr. No. Key Audit Matter Auditor’s Response
1. Inventory Existence:
The Company recognized inventory of Rs.3528.07 Lakhs as at 31 March 2019. We attended inventory counts at factory which we selected based on financial significance and risk
We performed the following procedures at each site:
Within each location inventory is stored in packet drums at factory and third party locations. • Selected a sample of inventory items and compared the quantities we counted;
• Observed a sample of managements inventory count procedures to assess compliance with Company Policy and
This is a key audit matter because of the • Made enquiries regarding obsolete inventory items and inspected the condition of items counted.
• Significance of the inventory balance to the statement of financial position and
• Complexity involved in determining inventory quantities on hand due to the number conversion from Ltr. to Kgs. location and diversity of inventory storage locations inventories lying with third parties etc. We have also evaluated a selection of controls over inventory existence across the Company. Also obtained confirmation for inventories held with third parties.
2. Trade Receivables: We assessed the validity of material long outstanding receivables by obtaining third-party confirmations of amounts receivable. We also considered payments received subsequent to year- end insurance held for overseas trade receivables past payment history and unusual patterns to identify potentially impaired balances. The assessment of the appropriateness of the allowance for trade receivables comprised a variety of audit procedures across the Company including:
Trade receivables comprise a significant portion of the current assets of the Company and serve as security for a majority of the Company short-term debt. As indicated in Note 4.2 to the financial statements. The receivables provision has made based on
Expected Credit Loss method. Accordingly the estimation of the allowance for trade receivables is a significant judgement area and is therefore considered a key audit matter. • Assessing the appropriateness and reasonableness of the assumptions applied in the managements' assessment of the receivables allowance;
• Consideration of the creditworthiness of significant trade receivables over 90 days;
• Consideration and concurrence of the agreed payment terms;
• Verification of receipts from trade receivables subsequent to year-end;
• Inspection of credit insurance policies; and
• Considered the completeness and accuracy of the disclosures.
To address the risk of management bias we evaluated the results of audit procedures on other key balances to assess whether or not there was an indication of bias. We were satisfied that the Company's trade receivables are fairly valued and adequately provided. We further considered whether the provisions were misstated and concluded that they were appropriate in all material respects and disclosures related to trade receivable in the financial statements are appropriate.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the financial statements and our report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.

Responsibility of Management for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance cash flows and changes in equity of the Companyin accordance with the accounting principles generally accepted in India read withrelevant rules issued thereunder. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of the financial statements. As part of an audit in accordance with SAs we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe 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'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe 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 2016 ("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 B" a statement on the mattersspecified 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 bestof 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 theCompany so far as it appears from our examination of those books.

c. The Balance Sheet the Statement of Profit and Loss Statement of Changes in Equityand the Statement of Cash Flow dealt with by this Report are in agreement with therelevant books of account.

d. In our opinion the aforesaid financial statements comply with the specifiedrelevant accounting standard read with Rule 7 of the Companies (Accounts) Rules 2014.

e. On the basis of the written representations received from the directors as on 31March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on March 312019 from being appointed as a director in terms of Section164 (2) of the Act.

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

g. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.

iii. There were no amounts which were required to be transferred to Investor Educationand Protection Fund by the Company.

For JMR & Associates LLP
Chartered Accountants
Firm Registration No. 106912W / W100300
sd/-
CA. Nikesh Jain
Place: Mumbai Partner
Date: May 21 2019 Membership No. 114003

"Annexure B"

To the Independent Auditors' Report on the financial statements of Vidhi Specialty FoodIngredients Limited for the

year ended 31st March 2019

(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our report to the Members of Vidhi Specialty Food Ingredients Limited ofeven date.)

i. In respect of property plant and equipment:

a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.

b) As informed to us the property plant and equipment have been physically verifiedby the management during the period according to a phased programme. In our opinion suchprogramme is reasonable having regard to the size of the Company and the nature of itsassets. As informed no material discrepancies were noticed on such verification by themanagement.

ii. In respect of its inventories:

As explained to us inventories have been physically verified during the year by themanagement and in our opinion the frequency of verification is reasonable. In our opinionand on the basis of our examination of the records the Company is generally maintainingproper records of its inventories. No material discrepancy was noticed on such physicalverification of stocks.

iii. The Company has not granted loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Act and accordingly the provisions of Clause (iii) (a) to (c) of Para3 of the Order are not applicable to the Company.

iv. The Company has not granted any loan under Section 185 of the Act. The Companyhas complied with the provisions of Section 186 of the Act with respect to the investmentand guarantees. The Company has neither given any security nor given any loans during theyear.

v. According to the information and explanations given to us the Company has notaccepted any deposits from the public as per the provisions of Section 73 to 76 of the Actand rules framed thereunder and accordingly the provisions of Clause (v) of Para 3 ofthe Order are not applicable to the Company.

vi. According to the information and explanation given to us Central Governmenthas not prescribed the maintenance of cost records under section (1) of Section 148 of theAct for any of the services rendered by the company.

vii. In respect of statutory dues:

a) According to the information and explanations given to us and according to therecords of the Company examined by us in our opinion the Company is generally regular indepositing with the appropriate authorities undisputed statutory dues including providentfund Employees' State Insurance Income-tax Goods and Service tax cess or /and anyother material statutory dues wherever applicable.

b) Also according to the information and explanations given to us there were nooutstanding statutory dues as on 31 March 2019 for a period of more than six months fromthe date they became payable.

c) According to the information and explanation given to us there are no duesoutstanding in respect of Income-tax Custom duty Goods and Service tax Cess or/and anyother material statutory dues wherever applicable which have not been deposited onaccount of any dispute except the following:

Name of the Statute Nature of the Dues Amount Period to which the amount relates Forum where dispute is pending
Central Sales Tax Act1956 Central Sales Tax 868350 2005-06 Central Sales Tax Appellate Authority
Value Added Tax Act 2002 Value Added Tax 288377 2012-13 Value Added Tax Appellate Authority
Value Added Tax Act 2002 Value Added Tax 36839 2013-14 Value Added Tax Appellate Authority
Central Sales Tax Act1956 Central Sales Tax 358975 2013-14 Central Sales Tax Appellate Authority

viii. In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of dues to banks. The Company did not haveany borrowings from financial institutions government or dues to debenture holders.

ix. Based on our audit procedures and on the basis of information and explanationsgiven to us the Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. According to the informationand explanations given to us the Company did not raise any money by way of term loans.

x. Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year.

xi. Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid / provided inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to usthe Company is not a Nidhi company. Accordingly the provisions of Clause (xii) of Para 3of the Order are not applicable to the Company.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with the directors requiring compliancewith Section 192 of the Companies Act.

xvi. The Company is not required to be registered under section 45-IA of theReserve Bank of India Act 1934. Accordingly clause 3 (xvi) of the Order is notapplicable to the Company.

For JMR & Associates LLP
Chartered Accountants
Firm Registration No. 106912W / W100300
sd/-
Nikesh Jain
Place: Mumbai Partner
Date: May 21 2019 Membership No. 114003

"Annexure A"

To the Independent Auditors' Report on the financial statements of Vidhi Specialty FoodIngredients Limited for the year ended 31 March 2019

(Referred to in paragraph 2(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Vidhi Specialty Food IngredientsLimited of even date)

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of VidhiSpecialty Food Ingredients Limited ("the Company") as of 31 March 2019 inconjunction with our audit of the financial statements of the Company for the year endedon 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 ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to 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 Act.

Auditors' Responsibility

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 issued by ICAI and deemedto be prescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively 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 and testing and evaluating the designand operating 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 Company's internal financial controls systemover financial 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the Company have in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31 March 2019 based on the internalcontrol over financial reporting criteria established by the respective companiesconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For JMR & Associates LLP
Chartered Accountants
Firm Registration No. 106912W / W100300
sd/-
Nikesh Jain
Place: Mumbai Partner
Date: May 21 2019 Membership No. 114003


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