| We have audited the accompanying financial statements of KORE FOODS
LIMITED (Formerly known as PHIL CORPORATION LIMITED) ("the Company"),
which comprise the Balance Sheet as at March 31,2015, and the Statement
of Profit and Loss and Cash Flow Statement for the year then ended, and
a summary of significant accounting policies and other explanatory
information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these financial statements that give a true and
fair view of the financial position, financial performance and cash
flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
there under.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the financial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31st March, 2015, and its Statement of profit and loss and its cash
flows 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
uncertainty related to the outcome of the lawsuit filed against the
Company.
(b) Note 22(2) in the financial statement which indicates that the
Company has accumulated losses and its net worth has been fully eroded,
the Company has incurred a net loss during the year and cash loss
during the current and previous year and, the Company's current
liabilities exceeded its current assets as at the Balance sheet date.
These conditions, along with other matters set forth in Note 22,
indicate the existence of a material uncertainty that may cast
significant doubt about the Company's ability to continue as a going
concern. However, the financial statements of the Company have been
prepared on a going concern basis for the reasons stated in the said
Note and consequently no adjustments have been made to carrying values
or classification of Balance sheet accounts.
c) Note no 22(3) in the financial statement regarding non provisioning
of demand of Rs. 1,91,24,546/- including interest of Rs. 1,21,36,564/-
raised by commercial tax Department of Government of Karnataka on
reversal of decision of Karnataka High Court by Supreme Court of India
on applicability of commercial tax on photographic development activity
by photo processing Labs.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. 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 best of 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 the Company 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 to be audited under section 143(8) of the Act,.
(d) The Balance sheet, the statement of profit and loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(e) In our opinion, the aforesaid financial statements comply with the
Accounting Standards Specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
(f) The going concern matter described in sub- paragraph (b) under the
Emphasis of Matters paragraph above, in our opinion, may have an
adverse effect on the functioning of the Company.
(g) On the basis of the written representations received from the
directors as on 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act.
(h) In our opinion and according to the information and explanations
given to us, there are adequate internal financial controls over
financial reporting which have effective control over its operation
considering the size of the Company.
(i) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and 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
financial position in its financial statements - Refer Note 22(1) to
the financial statements.
(ii) The Company is not required to make any provision for material
foreseeable losses in respect of long-term contracts including
derivative contracts as it has not entered into any such contract.
(iii) There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
2. As required by the Companies (Auditor's Report) Order, 2015 issued
by the Central Government in exercise by powers conferred by
sub-section (11) of Section 143 of Companies Act, 2013 we enclosed in
the Annexure a statement on the matters specified in paragraphs 3 and 4
of the said order.
ANNEXURE TO THE AUDITOR'S REPORT
(Referred to in Report on Other Legal and Regulatory Requirements of our
Report of even date)
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) A substantial portion of the fixed assets has been physically
verified by the management during the year and in our opinion the
frequency of verification is reasonable having regard to the size of
the Company and the nature of its assets. No material discrepancies
were noticed on such physical verification.
(ii) (a) The inventories have been physically verified during the year
by the management. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company is maintaining proper records of inventory.
The discrepancies noticed on verification between the physical stocks
and the book records were not material and these have been properly
dealt with in the books of account.
(iii) The Company has not granted any loans, secured or unsecured
to/from Companies, firms or other parties covered in the register
maintained under Section 189 of the Companies Act, 1956. Accordingly,
Sub- Clause (a) and (b) are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchases of inventory, fixed assets and with regard to the sale of
goods. During the course of our audit, we have not observed any
continuing failure to correct major weakness in internal system.
(v) In our opinion and according to the information and explanations
given to us, the Company has not accepted any Deposits from the public
during the year.
(vi) We are informed that the Central Government has not prescribed
maintenance of cost records under sub- section (l) 148 of the Companies
Act, 2013 for any of the products of the Company.
(vii) (a) According to the records of the Company, in respect of
Provident Fund, Employees State Insurance Fund, Income Tax, Sales Tax
Wealth Tax, Service Tax, Cess have been generally, regularly deposited
during the year with the appropriate authorities. As per the
explanations given to us, no undisputed amounts payable in respect of
above were in arrears, as at 31st March 2015 for a period of more than
six months from the date on which they became payable.
(b) According to the records of the Company, Sales Tax, Income Tax,
Customs Duty, Wealth Tax, Excise Duty and Cess In respect of Gratuity
payments the extent of arrears of outstanding dues, as at the last day
of the financial year for a period of more than six months from the
date they became payable are given below :
Name of the Period to A Forum where Amount
statute which the dispute is (Rs.)
(nature of dues) amount pending
relates
Duty Drawback 1989-1990 High Court, 7,04,000
Rules Mumbai
Foreign Trade 1999-2000 DGFT/Jt.DGFT 86,58,000
(Development &
Regulation)
Act, 1992
State Sales Tax\ 1993-2004 Appellate 3,35,58,458
Central Sales Tax Authorities
Central Excise\ 1990-2004 Appellate 15,72,000
Service Tax Authorities
(c) According to the information and explanations given to us, the
Company has transfer to investor education and protection fund, in
accordance with the relevant provisions of the Companies Act, 1956 (1
of 1956) and rules made there under, has been transferred to such fund
within time.
(viii) The accumulated losses at the end of the financial year are
above Company net worth. The Company has incurred cash loss of Rs.
1,45,70,987/-. In the current financial year and Rs. 85,58,111/- in the
preceding financial year.
(ix) According to the information and explanations given to us, the
Company has not defaulted in repayment of dues to a Bank.
(x) During the course of our examination of books and records of the
Company carried out in accordance with generally accepted accounting
practices followed in India, and based on the audit procedures
performed to report the true and fair view of the financial statements
and as per the information and explanation given by the management, we
report that we have neither come across any material fraud on or by the
company noticed or reported during the year, nor we have been informed
of such case by the management.
For V. C. Shah & Co.
Chartered Accountants
Firm Reg. No. 109818W
Place : Mumbai V.C. Shah
Date : 7th May, 2015 Partner
Membership No. 10360
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