The Members of KORE FOODS LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of KORE FOODS LIMITED(Formerly known as PHIL CORPORATION LIMITED) ("the Company") which comprisethe Balance Sheet as at March 31 2018 and the Statement of Pro t and Loss Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofsignificant accounting policies and other explanatory information (hereinafter referred toas "standalone Ind AS financial statements").
Management's Responsibility for the IND AS 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 preparation ofthese IND AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income and cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014 and TheCompanies (Accounting Standards) Amendment Rules 2016. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; 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 Ind AS financial statements that give a true and fairview and are free from material misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these Ind AS financial statements basedon 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 of the Ind AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind AS financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give a true and fair view in order todesign audit 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 Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the 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 give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2018 and its pro t total comprehensive income its cash flows and thechanges 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:
(a) Note 22 (1) (ii) to the financial statements which describes the uncertaintyrelated to the outcome of the lawsuit led against the Company.
(b) Note 22 (2) in the financial statement which indicates that the Company hasaccumulated losses and its net worth has been fully eroded the Company has incurred a netloss during the year and cash loss during the current and previous year and the Company'scurrent liabilities exceeded its current assets as at the Balance sheet date. Theseconditions along with other matters set forth in Note 22 indicate the existence of amaterial uncertainty that may cast significant doubt about the Company's ability tocontinue as a going concern. However the financial statements of the Company have beenprepared on a going concern basis for the reasons stated in the said Note and consequentlyno adjustments have been made to carrying values or classification of Balance sheetaccounts
c The financial statement has been prepared as per the IND AS Gaap except for theborrowing from Director as referred in Note 22(12)(3).
Our opinion is not modi ed in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment in exercise by powers conferred by sub-section (11) of Section 143 of CompaniesAct 2013 we enclosed in the Annexure a statement on the matters specified in paragraphs 3and 4 of the said 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) It is informed by the Company that it does not have any Branch office required tobe audited under section 143(8) of the Act.
(d) The Balance sheet the statement of pro t and loss including Other ComprehensiveIncome and the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account.
(e) In our opinion the aforesaid Ind AS financial statements comply with theAccounting Standards Specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 and The Companies (Accounting Standard) Amendment Rules2016.
(f) The going concern matter described in sub-paragraph (b) under the Emphasis ofMatters paragraph above in our opinion may have an adverse effect on the functioning ofthe Company.
(g) On the basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 from being appointed as a director in terms of Section164 (2) of the Act.
(h) With respect to adequacy of the internal financial controls over financialreporting and the operating effectiveness of such controls refer to our separate Reportin "Annexure A"
(i) 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 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 Ind AS financial statements Refer Note 22(1) to the financial statements.
(ii) The Company did not have any long term contracts including derivative contractsfor which there were any material foreseeable losses.
(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
| ||For S. V. Shah & Associates |
| ||Chartered Accountants |
| ||Firm Reg. No. 139517W |
| ||Sheetal V. Shah |
|Place : Mumbai ||Partner |
|Date : 05th May 2018 ||Membership No. 102140 |
ANNEXURE TO THE AUDITOR'S REPORT
(Referred to in Report on Other Legal and Regulatory Requirements of our Report of evendate)
(I) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) A substantial portion of the xed assets has been physically verified by themanagement during the year and in our opinion the frequency of verification is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies were noticed on such physical verification.
(c) In our opinion and according to the information and explanations given to us thetitle deeds of immovable properties are held in the name of the company.
(ii) (a) The inventories have been physically verified at reasonable interval by themanagement. The discrepancies noticed on verification between the physical stocks and thebook records were not material and these have been properly dealt with in the books ofaccount.
(iii) The Company has not granted any loans secured or unsecured to Companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Companies Act 2013. Accordingly Sub-clause (a) (b) and (c) are notapplicable.
(iv) In our opinion and according to the information and explanations given to usthere are no loans investments guarantees and security covered under section 185 and186 of the Companies Act 2013.
(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any Deposits from the public during the year.
(vi) We are informed that the Central Government has not prescribed maintenance of costrecords under sub-section (l) of Section 148 of the Companies Act 2013 for any of theproducts of the Company.
(vii) ( a) According to the records of the Company in respect of Provident Fundemployees state insurance Fund Income Tax Sales Tax Wealth Tax Service Tax Cess havebeen generally regularly deposited during the year with the appropriate authorities. Asper the explanations given to us no undisputed amounts payable in respect of above werein arrears as at 31st March 2018 for a period of more than six months from the date onwhich they became payable except the following:-
|Name of the statute ||Nature of dues ||Amount (Rs.) ||Period to which the amount relates |
|Central Sales Tax Act 1956 ||Assessment Dues ||201383 ||2011-12 |
|Goa Value Added Tax Act 2005 ||Assessment Dues ||26106 ||2011-12 |
|Goa Tax on Entry of Goods Act 2000 ||Assessment Dues ||24430 ||2011-12 |
|State Sales Tax-Gujarat ||Decision of Appeal ||675000 ||1996-99 |
|Excise duty payable ||Assessment Dues ||31747 || |
|Works contract ||Assessment Dues ||7953173 ||1988-89 to 2004-05 |
(b) According to the records of the Company Sales Tax Income Tax Customs DutyWealth Tax Excise Duty and Cess which have not been deposited on account of any disputeare given below:
|Name of the statute (nature of dues) ||Period to which the amount relates ||A Forum where dispute is pending ||Amount (Rs.) |
|Duty Drawback Rules ||1989-1990 ||High Court Mumbai ||704000 |
|Foreign Trade (Development and Regulation) Act 1992 ||1999-2000 ||DGFT/Jt. DGFT ||8658000 |
|State Sales Tax\ Central Sales Tax ||1993-2004 ||Appellate ||24292531 |
| || ||Authorities || |
|Central Excise\ Service Tax ||1990-2004 || ||1870380 |
| || ||Appellate Authorities || |
(viii) According to the information and explanations given to us the Company has notdefaulted in repayment of dues to a Bank.
(ix) In our opinion and according to the information and explanations given to us thecompany has not raised moneys by way of initial public offer or further public offer andterm loans during the year.
(x) During the course of our examination of books and records of the Company carriedout in accordance with generally accepted accounting practices followed in India andbased on the audit procedures performed to report the true and fair view of the financialstatements and as per the information and explanation given by the management we reportthat we have neither come across any material fraud on or by the company noticed orreported during the year nor we have been informed of such case by the management.
(xi) In our opinion and according to the information and explanations given to usmanagerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.
(xii) In our opinion the Company is not a chit fund or a Nidhi/mutual benefitfund/society. Therefore the provisions of Nidhi Rules 2014 are not applicable to theCompany.
(xiii) In our opinion and according to the information and explanations given to usall transactions with the related parties are in compliance with sections 177 and 188 ofCompanies Act2013 as applicable and the details have been disclosed in the FinancialStatements as required by the applicable accounting standards
(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review thereforethe requirement of section 42 of the Companies Act 2013 is not applicable.
(xv) In our opinion and according to the information and explanations given to us thecompany has not entered into any non-cash transactions with directors or persons connectedwith him.
(xvi) The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
| ||For S. V. Shah & Associates |
| ||Chartered Accountants |
| ||Firm Reg. No. 139517W |
|Place : Mumbai ||Sheetal V. Shah |
|Date : 05th May 2018 ||Partner |
| ||Membership No. 102140 |
ANNEXURE A' TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIALSTATEMENTS OF KORE FOODS LIMITED (Formerly known as PHIL CORPORATION LIMITED)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 ofSection 143 of the Companies Act 2013 ("the Act")
1. We have audited the internal financial controls over financial reporting of KOREFOODS LIMITED (Formerly known as PHIL CORPORATION LIMITED) ("the Company") as ofMarch 31 2018 in conjunction with our audit of the financial statements of the companyfor the year ended on that date.
Management's Responsibility for Internal Financial Controls
2. The Management of the company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the Guidance Note') issued by the Institute of Chartered Accountants ofIndia (ICAI'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and ef cient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
3. 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 and the Standards on Auditing (the Standards') issued by theICAI and deemed to be prescribed under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includesobtaining 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.
5. 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
6. The Company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A Company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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
7. 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.
8. 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 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by theICAI.
| ||For S. V. Shah & Associates |
|Place : Mumbai ||Chartered Accountants |
|Date : 05th May 2018 ||Firm Reg. No. 139517W |
| ||Sheetal V. Shah |
| ||Partner |
| ||Membership No. 102140 |