To The Members of KORE FOODS LIMITED
Report on the Audit of the Financial Statements Opinion
We have audited the financial statements of Kore Foods Limited ("theCompany") which comprise the balance sheet as at 31st March 2020 and the statementof Profit and Loss (including Other Comprehensive Income)statement of changes in equityand statement of cash flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 in the manner so required and give a true and fair view in conformitywith the Indian Accounting Standards prescribed under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended ("Ind AS") andother accounting principles generally accepted in India of the state of affairs of theCompany as at March 312020 and its loss total comprehensive income statement ofchanges in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the ICAI's Code of Ethics. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
We draw attention to the following matters in the Notes to the financial statements:
(a) Note 20(1)(ii) to the financial statements which describes the uncertainty relatedto the outcome of the lawsuit filed against the Company.
(b) Note 20(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 20 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 10(B).
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 mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
Information Other than the Financial Statements and Auditor's Report Thereon.
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Board's report including Annexuresto Board's report Business Responsibility Report Corporate Governance and Shareholder'sInformation but does not include the financial statements and our auditor's reportthereon.
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 in theaudit 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 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 financial statements that give a true and fair view of the financial positionfinancial performance including other comprehensive income changes in equity and cashflows of the Company in accordance with the I nd AS and other accounting principlesgenerally accepted in India. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statement that give a true and fair view and are free frommaterial 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.
Those Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibilities 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 these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain 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
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 A" a statement on thematters specified in paragraphs 3and 4 of the Order to the extent applicable.
As required by Section 143(3) of the Act we report that:
We have sought and obtained all the information and explanations which to the best ofour knowledge and belief were necessary for the purposes of our audit.
(a) 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.
(b) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.
(c) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act.
(d) On the basis of the written representations received from the directors as on 31stMarch2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of Section164 (2) of the Act.
(e) 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" to this report.
(f) 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 as at 31 March 2020 onits financial position in its financial statements - Refer Note 20 to the financialstatements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
|Place : Mumbai ||For S. V. Shah & Associates Chartered Accountants Firm Reg. No. 139517W Sheetal V. Shah |
|Date : 25th June 2020 ||Partner |
| ||Membership No. 102140 UDIN: 20102140AAAACX4282 |
"ANNEXURE A" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in Report on Other Legal and Regulatory Requirements of our Report of evendate)
(I) In respect of the Company's Property Plant and Equipment:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment.
(b) All Property Plant and Equipment have been physically verified by the managementduring the year.
(c) According to the information and explanations given to us the title deeds ofimmovable properties are held in the name of the Company.
(ii) There are no inventories with the company therefore the said clause is notapplicable.
(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under Section 189 of theAct. Hence clause (iii) (iii)(a)(iii)(b)(iii)(c) of paragraph 3 of the Order is notapplicable.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable.
(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. Hence clause (v)of paragraph 3 of the Order is not applicable.
(vi) We are informed that the Central Government has not prescribed maintenance of costrecords under sub-section (1) of Section 148 of the Companies Act 2013 in respect of theactivities carried on by the Company. Hence clause (vi) of paragraph 3 of the Order isnot applicable.
(vii) According to the information and explanations given to us in respect ofstatutory dues:
(a) The Company has generally been regular in depositing undisputed statutory duesincluding provident fund employees' state insurance income tax sales tax service taxduty of customs duty of excise value added tax cess Goods & Services Tax and othermaterial statutory dues applicable to it with the appropriate authorities.
(b) As per the explanations given to us no undisputed amounts payable in respect ofabove were in arrears as at 31st March 2020 for a period of more than six months from thedate on which they became payable except the following:-
|Name of the statute ||Nature of dues ||Amount (?.) ||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 || |
(b) According to the records of the Company Sales Tax Income Tax Customs
Duty Wealth Tax Excise Duty and Cess which have not been deposited on account of anydispute are given below:
|Name of the statute (nature of dues) ||Period to which the amount relates ||A Forum where dispute is pending ||Amount (?.) |
|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 Authorities ||24292531 |
(viii) Based on our audit procedures and according to the information and explanationsgiven by the management the Company has not defaulted in repayment of loans or borrowingto bank. The Company did not have any outstanding dues in respect of a financialinstitute government or debenture holders during the year.
(ix) In our opinion and according to the information and explanations given by thecompany the Company has no term loans and has not raised any money by way of initialpublic offer / further public offer / debt instruments.
(x) To the best of our knowledge and according to the information and explanations
given to us no fraud by the Company or on the Company by its officers or employees hasbeen noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us theCompany has paid /provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.
(xii) The Company is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order isnot applicable.
(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 Act 2013 as applicable and the details have been disclosed in the financialstatements as required by the applicable accounting standards.
(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures. Accordingly paragraph3(xiv) of the Order is not applicable.
(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its Directors and hence provisions of Section 192 of theAct are not applicable.
(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934. Hence clause (xvi) of paragraph 3 of the Order is not applicable.
| ||For S. V. Shah & Associates Chartered Accountants Firm Reg. No. 139517W |
|Place : Mumbai Date : 25th June 2020 ||Sheetal V. Shah Partner Membership No. 102140 UDIN: 20102140AAAACX4282 |
ANNEXURE B' TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2(e) under Report on Other Legal and RegulatoryRequirements' of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (the Act')
We have audited the internal financial controls over financial reporting of Kore FoodsLimited (the Company') as of March 31 2020 in conjunction with our audit of thefinancial statements of the Company for 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 (the Guidance Note').These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.
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 issued by ICAI and deemed to beprescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls and both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with the ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 auditors' 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 that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorizations of management and directors of the Company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the Company's assets that could have amaterial 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 controlsover 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 2020 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 Financials Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||For S. V. Shah & Associates |
| ||Chartered Accountants |
| ||Firm Reg. No. 139517W |
| ||Sheetal V. Shah |
|Place : Mumbai ||Partner |
|Date : 25th June 2020 ||Membership No. 102140 |
| ||UDIN: 20102140AAAACX4282 |