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Kohinoor Foods Ltd.

BSE: 512559 Sector: Agri and agri inputs
NSE: KOHINOOR ISIN Code: INE080B01012
BSE 00:00 | 21 Aug 15.35 -0.35
(-2.23%)
OPEN

16.00

HIGH

16.00

LOW

14.60

NSE 00:00 | 21 Aug 15.15 -0.45
(-2.88%)
OPEN

16.10

HIGH

16.10

LOW

15.05

OPEN 16.00
PREVIOUS CLOSE 15.70
VOLUME 3521
52-Week high 39.00
52-Week low 13.20
P/E
Mkt Cap.(Rs cr) 57
Buy Price 15.00
Buy Qty 502.00
Sell Price 15.50
Sell Qty 1.00
OPEN 16.00
CLOSE 15.70
VOLUME 3521
52-Week high 39.00
52-Week low 13.20
P/E
Mkt Cap.(Rs cr) 57
Buy Price 15.00
Buy Qty 502.00
Sell Price 15.50
Sell Qty 1.00

Kohinoor Foods Ltd. (KOHINOOR) - Auditors Report

Company auditors report

TO THE MEMBERS OF

KOHINOOR FOODS LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying Standalone financial statements of Kohinoor FoodsLimited ("the company") which comprises the Balance Sheet as at 31st March2018 the Statement of Profit and Loss (including Other Comprehensive Income) the CashFlow Statement and the Statement of Change in Equity for the year then ended and asummary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone 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 standalone financial statements that give a true and fair viewof the financial position financial performance (including other comprehensive income)cash flows and change in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards("Ind AS") specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial control that were operating e3ectively 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.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company’s Directors as well as evaluating theoverall 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 standalone financial statements.

Opinion

In our opinion based upon information and explanation given to us the aforesaidstandalone financial statements give the information required by the Act in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India including Ind AS specified under Section 133 of the Act ofthe state of affairs (financial position) of the Company as at 31st March 2018 and itslosses (financial performance including other comprehensive income) its cash flows andthe changes in equity for the year ended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

(1) As stated in Note 4 to the standalone financial statements the company hasadjusted the value of inventories by Rs 24445.09 Lacs as at the date of transition i.e.April 1 2016 by reducing the amount of Borrowing cost included in the value ofinventories.

(2) As stated in Note 6 (c) to the standalone financial statements regardingcompany’s investment in its wholly owned subsidiary Kohinoor Foods USA Inc.amounting to Rs 3978.45 Lacs. This subsidiary company has been incurring continuous lossesand its net worth is fully eroded. However based on factors regarding future businessplan growth prospects of subsidiary as described in the said note Management believesthat the realizable value is higher than the carrying value of the investment due to whichInvestments are recognised at carrying value.

(3) As stated in Note 41 to the standalone financial statements the company has notmade Provision for the demand raised by various authorities as the matters are pendingbefore various Appelatte forum.

(4) As stated in Note 44 of standalone financial statement as per information andexplanation given to us the company has not paid interest to banks and its outstandingbalance in loan accounts has exceeded its drawing power since February 2018.

(5) As stated in Note No. 50 of standalone financial statement balances of debtorscreditors loan and advances are subject to confirmation.

(6) As stated in Note No. 5 of standalone financial statement the management hasupwardly revalued the carrying amount of Fixed assets by Rs 15885.18 Lacs as at the dateof transition i.e. April 1 2016 which consequently resulted in increase of revaluationreserve.

(7) We draw your attention to clause (ii) of Annexure-A to our report we did not haveoccasion to overview the physical stock taking done by the management during the financialyear 2017-18 and have relied on the information and explanations provided to us by themanagement.

Our opinion is not modified in respect of these matters.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub - section (11) ofsection 143 of the Act we give in the Annexure A a statement on the Matters specified inthe paragraph 3 and 4 of the Order.

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 standalone financial statement dealt with in the report are in agreement withthe books of account and return;

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules;

e) On the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on 31st March2018 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 financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and

g) With respect to the other matters to be included in the Auditor’s Report inaccordance with Rule 11of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

I. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements. Refer Note 41 to the financial statements;

ii. Except for the possible effects of the matter described in the basis for emphasisof mater paragraph the company has made provision as required under the applicable lawor Ind AS for material foreseeable losses if any on long-term contracts includingderivative contracts- Refer Note 19 and 24 to the financial statements;

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

For RAJENDER KUMAR SINGAL & ASSOCIATES LLP
(CHARTERED ACCOUNTANTS)
FRN NO.: 016379N
Sd/-
(Pankaj Gupta)
Place: New Delhi Partner
Date: 30th May 2018 Membership No. 94909

Annexure - A to the Auditors’ Report

The Annexure referred to in Independent Auditors’ Report to the members of theCompany on the standalone financial statements for the year ended 31st March 2018 wereport that:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets

(b) According to explanation given to us fixed assets have been physically verified bythe management at reasonable intervals and no material discrepancies were noticed on suchverification.

(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.

(ii) According to information and explanation given to us physical verification ofinventory has been conducted at reasonable intervals by the management. However we didnot have occasion to overview the physical stock taking. Further according to informationand explanation given to us no material discrepancy was noticed in such verification bymanagement.

(iii) According to information and explanation given to us The Company has grantedunsecured loans to company covered in the register maintained under section 189 of theCompanies Act 2013 (‘the Act’).

(a) according to information given to us the terms and conditions of grant of such loanis not prejudicial to the interest of the Company

(b) according to information given to us the schedule of repayment of loan is notspecified and is repayable on demand.

(c) according to information given to us there is no overdue amounts in respect of theloan granted to a body corporate listed in the register maintained under section 189 ofthe Act.

(iv) 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.

(v) To the best of our knowledge and explanation given to us the company has notaccepted any deposit from the public.

(vi) To the best of our knowledge and explanation given to us the cost recordsspecified by the Central Government under subsection (1) of section 148 of the CompaniesAct have been made and maintained by the company. However we have not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the books of accounts the Company is regular in depositing undisputedstatutory dues including provident fund employees’ state insurance income–taxsales tax service tax duty of customs duty of excise value added tax cess and otherstatutory dues to the appropriate authority.

(b) According to information and explanations given to us the following dues of incometax sales tax service tax duty of excise and value added tax have not been depositedby the Company on account of disputes:

Nature of Dues Amount (Rs. in Lacs) Period to which the Amount relates Forum where dispute is pending
Income Tax 346.70 2002-03 to 2008-09 High Court of Delhi
Income Tax 116.83 2002-03 to 2008-09 ITAT Delhi
Income Tax 127.93 2009-10 Income Tax Appelatte Tribunal- (New Delhi)
Income Tax 3679.11 2010-11 Income Tax Appelatte Tribunal- (New Delhi)
Income Tax 1420.98 2011-12 Income Tax Appelatte Tribunal- (New Delhi)
Income Tax 2294.97 2012-13 CIT (A)
Income Tax 671.21 2013-14 CIT (A)
Income Tax 1251.89 2014-15 CIT (A)
Sales Tax - Delhi 122.00 1991-92 to 2000-01 Commissioner of Sales Tax (Delhi)
Sales Tax - Amritsar 455.82 2009-10 to 2010-11 Deputy Excise & Taxation Commission (Appeal)
Sales Tax - Haryana 732.35 2008-09 VAT Tribunal Haryana
Sales Tax - Haryana 52.64 2014-15 Jt. Excise and Taxation Commissioner (Appeals) Rohtak
Sales Tax - Haryana 98.60 2010-11 Jt. Excise and Taxation Commissioner (Appeals) Rohtak
Sales Tax - Haryana 132.21 2011-12 Jt. Excise and Taxation Commissioner (Appeals) Rohtak
Sales Tax - Haryana 28.51 2009-10 VAT Tribunal Haryana
Sales Tax - Haryana 46.39 2012-13 Jt. Excise and Taxation Commissioner (Appeals) Rohtak
Excise Duty 42.90 April 2005 to February 2006 CCE (Appeals)
Service Tax 9.12 2004-05 to 2008-09 Service Tax Appelatte Tribunal (New Delhi)

(viii) Based on our audit procedure and as per the information and explanation given tous we are of the opinion that the company has not defaulted in repayment of loan orborrowing to a financial institution bank or government.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments). However company raise money by way of termloan which were applied for the purposes for which those are raised.

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

(xi) According to the information and explanations given to us managerial remunerationpaid or provided in accordance with requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Companies Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(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. Accordingly paragraph 3(xiv) of the Order is not applicable.

(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 him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

Place: New Delhi
Date: 30th May 2018 For RAJENDER KUMAR SINGAL & ASSOCIATES LLP
(CHARTERED ACCOUNTANTS)
FRN NO. : 016379N
Sd/-
(Pankaj Gupta)
Partner
Membership No. 94909

Annexure – B to the Auditors’ Report

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 KohinoorFoods Limited ("the Company") as of 31st March 2018 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

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’). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company’s policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

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 Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated 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 controlssystem over 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 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 31st March 2018 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.

Place: New Delhi
Date: 30th May 2018 For RAJENDER KUMAR SINGAL & ASSOCIATES LLP
(CHARTERED ACCOUNTANTS)
FRN : 016379N
Sd/-
(Pankaj Gupta)
Partner
Membership No. 94909