KOHINOOR FOODS LIMITED
Qualified Opinion.
We have audited the accompanying Standalone financial statements of Kohinoor Foods Limited ("the Company"), which comprise the Standalone Balance Sheet as at March 31st, 2025, 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, and a summary of the significant accounting policies and other explanatory 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, 2025, and its standalone profit/loss including other comprehensive income, its standalone cash flows and the changes in equity for the year ended on that date.
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 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.
2. As stated in Note No.15 (C) of Standalone Audited Financial Results, the company has not provided interest on bank loans to the extent of Rs.14596.38 lacs for the Current Year and Rs. 73227.25 lacs from the date on which the bank loans were classified as non-performing assets. Further, towards revoked corporate guarantee of the wholly owned subsidiary in USA, the company has not provided interest to the extent of Rs 284.20 lacs for the Current Year and Rs. 1209.84 lacs up to 31.03.2025 from the date of revocation of corporate guarantee in the books of account. Further no provision has been made towards penal interest, penalties, any other Debit or Credit etc. as may be done by lenders. In the absence of reconciliation and complete statement of account from the banks, the above amount has been arrived as per calculation made by the company. With the limited information the aggregate amount not provided in books of account of the company is not ascertainable with accuracy. However, the company has entered into revised OTS with Consortium of Banks and has paid substantial amount.
Emphasis of Matters
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 to comment upon possible impact of non-provision in the standalone financial statement for the year ended 31st March 2025.
(2) We draw attention to Note No. 15 (C) of the statement of the company, The lead banker, Punjab National Bank has filed petition under section 7 of Insolvency and Bankruptcy Code, 2016, before the Hon'ble Court of NCLT. Chandigarh Bench, which is not yet admitted.
(3) In reference to Note no. 15 (C), 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.
(4) 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. However, the Company has entered into One time settlement (OTS) with the lenders, as per the term and condition of the OTS, the company has deposited Rs 200 Crores with Banks. (Rs. 78.5 Crores till 31-03-2025 and Rs. 121.5 Crores on 15-04-2025).
(5) 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-III, 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.
(6) Note no. 15 (f) of the financial result stating that the Lead Bank has filed petition before DRT, New Delhi under section 19(4) of the Act. The Company is contesting the matter.
(7) In reference to Note no. 35 C (iv), Appeals are lying before the Dy. Excise & Taxation Commissioner-Appeal, Punjab against the Order received from Excise and Taxation Deptt. Punjab in respect of Year 2009-10 and 2010-11 demanding a sum of Rs 4,50,41,414/- towards the cess imposed by the State Govt. on exports. The company has challenged the validity of imposition of cess on export in its appeal as the same in not permissible under article 286 of the Constitution on India. Further demand has been raised for Rs. 5,41,073/- after completing the Sales Tax Assessment for AY 2011-12 against which appeal has been filed.
(8) 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 to grant relief prayed for is made out at this stage.
(9) In reference to Note no. 35 (C)(viii)(c), The Company's vendor has filed an execution petition before Faridabad District & Session Judge. The company is contesting the matter. The company has also approached Hon'ble High Court Chandigarh and Hon'ble High Court Delhi for stay on above matter. Further, 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 against the impugned order of Faridabad District Court and asked the Company to approach the Hon'ble High Court for Seeking Direction for further relief. The Company has also deposited the above amount in compliance with the order of Apex Court.
(10) 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 19 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.
(11) In reference to Note No.46, balances of some debtors and creditors are subject to their confirmations.
(12) In reference to Note no. 47 corresponding figures for the previous year have been regrouped/rearranged, wherever necessary to confirm to current year classification.
(13) In reference to Note no. 15(g) and 48 As per the term of OTS, the company proposed to demonetized its Rice manufacturing Unit, the buyer of the Rice manufacturing Unit has deposited Full consideration Amount of Rs 190.00 Crores to the lenders, the lenders have issued NOC against rice MANUFACTURING UNIT, the company has accorded Approval from lender/ Shareholders in this regard. However, the Company is planning to operate Rice manufacturing unit (on lease basis) at Kandla, Gujrat to sustain its Business.
(14) In reference to Exceptional items of Rs 382.74 crores, based on the One Time Settlement by the Lender Banks, the OTS proposal amount was Rs 227.45 crores, the company has paid substantial amount of Rs 200 crores upto 15-04-2025, The Exceptional items of Rs 382.74 crores is on account of Gain on OTS.
(15) In reference to write off of MAT credit amounting to Rs 4.65 crores, keeping in view of the future business prospect of the company, the company plans to opt for the new tax regime u/s 115 BAA. Considering this, the company has foregone the MAT credit amounting to Rs 4.65 crores and accordingly written of the amount in the books of accounts.
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 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 forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition, the matters described in the "basis for qualified opinion" and "emphasis of matter" paragraph are by their nature are key audit matters.
Responsibility of Management's and Those Charged with Governance for the 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 statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
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 management either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
Thus, board of directors are also responsible for overseeing the company's financial 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, whether due to fraud or error, and to issue an auditor's report that includes our opinion. 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 material 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 for the purposes of our audit; except as stated in para under the head "Basis for Qualified Opinion".
b) Except for the 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 the Company so far as it appears from our examination of those books;
c) The standalone financial statement dealt within the report are in agreement with the books of account and 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 on the functioning of the Company.
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 31st, 2025, 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, refer to our separate report in "Annexure B"; 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 effect from 1st 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 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 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 Fund by the Company.
For N C Raj & Associates Chartered Accountants Firm Reg. No. 002249N
(CA. Sanjay Garg) Partner
Place: Delhi M.No. 088636
Date: 29-05-2025 UDIN: 25088636BMMJCP5013
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