We have audited the accompanying Standalone financial statements of Kohinoor Foods Limited ("the Company") v/hich comprise the Standalone Balance Sheet as at March 31 st. 2024. the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Cash Flow Statement and the standalone Statement of Changes in equity for the year ended, andasummaryofthe Significantaccounting policiesandotherexplanatory information
In our opinion and to the best of our information and according to the explanations given to us. except for the effects/possible effects of the matters described in paragraph under 'Basis for Qualified Opinion', the aforesaid standalone 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 including the Ind AS, of the financial position of the Company as at March 31st, 2024, anditsstandaloneprofit/lossincludingothercomprehensiveincome.itsstandalone cash flows and thechangesin equity for theyearendedonthatdate.
Basis for Qualified opinion
1. In reference to Note No. 38 in the statement discloses the management's assessment of the company’s ability to continue as going concern. The management's assessment of going concern is based on the OTS by the lead bank PNB and the interest shown by prospective investors in the company. However, in view of default in re-payment of borrowings, continuous losses, negative net worth and due to financial constraints, material uncertainty exists about the company’s ability to continue as going concern and the decision of the management of the company to prepare the accounts of the company on going concern basis. There may arise a need to adjust the realizable value of assets and liabilities in the event of failure of assumption as to going concern. Further, the company had made a provision of Interest for last quarter ended March-23 for Rs. 359 Lacs on OTS amount and Rs. 1756.89 Lacs for the year ended 31 st March 2024 on OTS amount, which makes a total Provision of Rs 2116 Lacs uptoyearended 31 st Mar 2024. The company isin advanced stage of discussion with the prospective investor. The deal with the prospective investor is likely to be finalized very soon and the company is hopeful to meet its OTS obligation within the bank granted stipulated time.
2. As stated in Note No.26 of Standalone Audited Financial Results, Loss of the company is understated by Rs.12,984 lacs (approx.) due to non-provisioning of interest on bank loans for the period from 01/04/2023 to 31/03/2024 and Rs.58,630 lacs (approx.) from the date on which the account of the company was classified as NPA to the period covered under audit, due to non-provisioning of interest on bank loans after the accounts of the company were classified as NPA. Also, towards revoked corporate guarantee of the wholly owned subsidiary in USA, the company has not provided interest to the extent of Rs 265 lacsfortheyearended31 03.2024andRs.925.64lacsupto31.03.2024fromthedateofrevocationofcorporateguaranteein the books of account. Further no provision has been made tov/ards penal interest any other penalty etc. as may be charged by lenders. In the absence of complete statement of account from the bank, the above amount has been arrived as per calculation made by the company. With the limited information the aggregate amount un-provided in books of account of the company is not ascertainable with accuracy.
EmphasisofMatters
We draw your attention to the following matters in the Notes to the financial statements:
(1) The company has not made Provision for the demand raised by various authorities (Such as Income Tax. Vat etc.) as the matters are pending before various appellate forums We are unable tocomment upon possible impact of non-provision in the standalonefinancialstatementfortheyearended31stMarch 2024.
(2) We draw attention to Note No. 15 of the statement of the company. The Secured Creditors of the Company have filed petition under Section 7 of Insolvency and Bankruptcy Code, 2016. before the Hon’ble court of NCLT, Chandigarh Bench, which are not yet admitted. The Next Date of Hearing has been scheduled for 11 th July 2024. The company has filed an appeal before Hon’ble High Court Punjab & Haryana for stay. The Hon'ble High Court has granted intenm stay till the Next Date of Hearing 2Slh Oct 2024.
(3) With reference to Note no. 15 against amount payable to Bank, management has raised certain disputes tov/ards overcharging of Interest. As on date company has paid INR 40.09 crores to banks in the no-lien account, the said amount has
been netted off in the total outstanding of Loan repayable on Demand from Banks.
(4) In reference to Note No.46,balancesofsomedebtorsandcreditcrsaresubjecttotheirconfirmations.
(5) In reference to Note no. 35D, The Company's vendor has filed an execution petition before Fandabad District & Session Judge. The company is contesting the matter. The next date of hearing is 17th July 2024. The Company filed a petition before the Hon'ble High Court Delhi with regard to contesting of proceeding before District and Session Court, Faridabad. The Next Date of Hearing is 10th July 2024. The Company also filed a petition before the Hon'ble High Court Punjab & Haryana with regard tocontesting of proceeding before District and Session Court Faridabad The nextdate of hearing is 17th Sep2024
(6) Note no. 15(d) of the financial result stating that the company has received Ex-parte Interim Order dated 25-06-2020 from Debt Recovery Tribunal-Ill, Delhi restraining the company from transferring/ alienating or otherwise dealing with, or disposing off or encumbering or creating any third-party interest with respect of the hypothecated assets/immovable properties of Company until further orders. The company is contesting the matter and has filed its reply before DRT-I. Delhi, The next date of hearing is 28 Aug 2024.
Note no. 15 (f) of the financial resuit stating that the Lead Bank has filed petition before DRT-III, New Delhi under section 19(4) of the Act The Company is contesting the matter. The next date of hearing is 31 May 2024
(7) In reference to Note no.41 read with Note no. 42 of the Balance Sheet which explains the management's assessment of impairment of assets due to COVID 1S pandemic situations. As per the assessment of the management, the recoverable amount of assets is higher than it carrying value and hence no impairment of assets needs to be recorded in the financial statements.
(8) In reference to Note no. 15(c) to the standalone financial statement the Banks have classified the company’s accounts as non-Performing asset and served recall Notice under section 13(2) & 13(4) of The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The Company has given reply of said notices within the stipulated time.
(9) In reference to Note no. 35 (viii)(b). The Municipal Corporation has issued notice to the Builder of Pinnacle Tower for vacating of premises Pinnacle Tower at Surajkund Faridabad. The Builder obtained interim stay on the order of Municipal Commissioner, Faridabad from Hon'ble High Court Punjab and Haryana The Company also filed a petition before the civil judge, senior division, Faridabad with regard to stay of proceeding against order of Municipal Corporation, Faridabad. The Hon'ble Faridabad Court has stated that already interim stay have been granted by the Hon'ble High Court, hence no ground togrant relief prayed for is made out at this stage. The next date of hearing is 11 th July 2024.
(10) In reference to Note no. 35(iv), Joint Director (Investigation) cum Deputy Commissioner State Tax. Bhatinda had served notice for hearing regarding Company appeal under section 62 of the PVAT Act 2005 for the additional demand created under the PIDB Act 2002 for the FY 2009-10, FY 2010-11 & FY 2011-12 amounting to Rs. 4.55.67.487/-The Company has filed appeal inChandigarhTribunal and the matter is yet to be listed.
(11) In reference to Note no. 48 to the financial statement. Company's Rice manufactunng unit is not running up to its full capacity duetonon-availability/shortageoffunds.
(12) In reference to Note no. 47 corresponding figures for the previous year have been regrouped/rearranged, wherever necessary to confirm to current yearclassification.
(13) In reference to Note no. 15©, The Secured Creditors (IDBI Bank) of the Company have filed petition under Section 7 of Insolvency and Bankruptcy Code, 2016, before the Hon'ble court of NCLT, Chandigarh Bench, which is yet to be admitted. The NextDateof Hearing is 15 July 2024.
(14) In reference to Note no.35D, The Company filed a petition before the Hon'ble Apex Court with regard to contesting of proceeding before District and Session Court. Faridabad. The Hon'ble Apex Court had allowed the company petition with granting relief to the Company and parties againstthe impugned orderof Faridabad District Court and asked the Company to deposit INR 50 Lakhseach in two tranches in a gap of two weeks before the Hon'ble High Court forseekmg direction forfurther relief.
Ouropmion is not modified in respect of these matters.
Koy Audit Matters.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period These matters were addressed in the context of our audit of the financial statements as a whole, and in formingour opinion thereon, and we do not provide a separate opinion on these matters. In addition, the matters described in the basisforqualifiedopimon’and'emphasisofmatter"paragrapharebytheirnaturearekeyauditmatters.
Responsibility of Management's andThose Charged with Governance forthe Standalone 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 standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance
including other comprehensive income, cash flows and changes in equity of the Company In accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules. 2015, as amended, and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities: selection and application of appropriate implementation and maintenance of 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 Ind AS financial statementsthatgiveatrueandfairviewandarefreefrom material misstatement, whetherduetofraudorerror
In preparing the financial statement, management is responsible for assessing the company's ability to continue as a going concern, disclosing, as application matters related to going concern and using the going concern basis of accounting unless managementeitherintendstoliquidatethecompanyortocease operations, orhas no realistic alternative but to do so.
Thus, board ofdirectors are also responsible for overseeing the company’sfmancial reporting process.
Auditor's Responsibility
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whetherdue to fraud orerror, and to issue an auditor’s report that includes ouropimon Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered matenal if. individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order,2020 issued by the Central Government of India in terms of subsection (11) of section 143 of the Act, we give in the Annexure A, a statement on the matters specified in the 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 best of our knowledge and belief were necessary forthe purposesofouraudit.exceptasstated in paraunderthe head’Basis forQualified Opinion".
b) Except forthe effects/possible effects of the matters described in the "Basis for Qualified Opinion" paragraph above, in our opinion, proper books of account as required by law have been kept by Ihe Company so far as il appears from our examination of those books;
c) The standalone financial statementdealt within the report are in agreement with the books of accountand return;
d) Except for the effects/possible effects of the matters described in the "Basis for Qualified Opinion" paragraph, in our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act. read with Rule 7 of the Companies (Accounts) Rules;
e) The matters described in the "Basis for Qualified Opinion" paragraph above, in our opinion, may have an adverse effect onthefunctioningoftheCompany.
f) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the director's is disqualified as on March 31 st. 2023, from being appointed as a director in terms of Section 164(2) of the Act ;
g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refertoourseparatereport in'AnnexureA" and
h) The company has maintained audit trail in the books of accounts maintained as per the proviso to rule 3( 1) of Companies (Accounts) Rules. 2014 as applicable with effectfrom 1 st April 2023.
i) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules, 2014. In ouropinionand to the best of our information and according totheexplanationsgiventous:
i The Company has disclosed the impact of pending litigations on its financial position in its financial statements. Refer Note 35 to the financial statements;
ii. Except as matter described under ‘basis for qualified opinion" and "Emphasis of matter" paragraph, the company has made provision, as required under the applicable law or Ind AS. for material foreseeable losses, if any, on long-term contracts including derivative contracts- Refer Note 28,33,34 and 39 to the financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection FundbytheCompany.
Place: Delhi For M/s N C Raj & Associates
Date: 29-05-2024 Chartered Accountants
UDIN: 24088636BKARIL700 Firm Reg. No. 002249N
(CA.SanjayGarg)
Partner M.No.088636
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