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Notes to Accounts of Kore Foods Ltd.

Mar 31, 2015

2015 2014 Rs. Rs.

1. Contingent Liabilities not provided for:

(i) Claims for Sales Tax/Excise/Service tax not accepted by the Company for which appeals are pending. 3,51,30,458 3,14,50,973

(ii) Claims against the Company not acknowledged as debts. 10,02,740 11,33,669

(iii) Export obligations not fulfilled against EPCG licences. 86,58,000 1,92,73,000

(iv) Duty drawback claim granted and later revoked. (The Company has effected transfer in financial year 12-13 of lease hold rights) 7,04,000 7,04,000

(v) Capital Commitments on unexecuted Contract. - 8,68,545

(vi) The Income Tax Assessments have been completed upto the Assessment year 2013-14 and there is no demand raised by Income tax Department.

2. In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value stated, if realised in the ordinary course of business. The provision for depreciation and all known liabilities is adequate and not in excess of the amount reasonably necessary. The financial statements indicate that the Company has accumulated losses and the net worth has been fully eroded. The Company has decided to focus on growth of sale in food products and has plans to develop the presence and share in the food market and in view of the projections in growth, the financial statements have been prepared on a going concern basis.

3. The Company has received a notice of demand from Commercial tax Department of Government of Karnataka of Rs. 1,91,24,546/- including interest of Rs. 1,21,36,564/- on reversal of decision of the Karnataka High Court by the Supreme Court of India. The Company has not made any provision for the same as it will be approaching through the Karnataka Photographic Association by representing before the Authorities for relief.

4. The Companies Act, 2013 requires Companies to compute the Depreciation based on useful lives of assets prescribed in schedule II to the Companies Act, 2013. In current year the company has provided for the depreciation considering the balance of useful lives of assets as per the schedule II in terms of section 123 of the Companies Act,

2013. Accordingly the depreciation charged includes of Rs. 1,15,35,618/- due to revision in provisioning requirement as per Companies Act 2013.

5. In respect of Fixed Assets the provision for Impairment loss has been revised to Rs. 44,14,254/- (Previous year Rs. 61,48,923/-) on existing Fixed Assets.

6. The Company has effected transfer of Lease Hold rights of the plot obtained from GIDC and the sale of factory building built thereon. However formal consent of GIDC is awaited.

7. The Company has continued the Gratuity Scheme of LIC and has made provision for Gratuity, after considering the corpus with LIC under the scheme, on actual ascertainment of liability.

8. The Company has unabsorbed depreciation and carried forward losses etc available for set off under Income Tax Act 1961. However in view of present uncertainty regarding generation of sufficient future taxable income, Net Deferred Tax Asset in respect of related credit for the year has not been recognised in the accounts on prudent basis.

9. The names of Micro, Small and Medium Enterprises to whom the company owes sums exceeding Rs. 1 Lakh each and which are outstanding for more than 30 days as at 31st March, 2015 are NIL as the vendors of the company have not filed intimation about their recognition as "Supplier" under the provisions of The Micro Small & Medium Enterprises Development Act 2006.

10. The company operates mainly in food processing segment.

11. Related party relationships have been identified by the management and relied upon by the auditors.

Transaction with Related Parties a) List of Related Parties

With whom transactions have taken place during the year

Associate Company

New Vision Imaging Private Limited

New Vision Printing Services Private Limited

La Costa Enterprises Private Limited

Cherish Specialties Limited

Key Management Personnel

A. Y Fazalbhoy

B. S. Sridhara

P. Padmanabhan


Mar 31, 2014

2014 2013 Rs. Rs.

1. Contingent Liabilities not provided for:

(i) Claims for Sales Tax/Excise/Service tax not accepted by the Company for which appeals are pending. 3,14,50,973 3,34,93,973

(ii) Claims against the Company not acknowledged as debts. 11,33,669 11,33,669

(iii) Export obligations not fulfilled against EPCG licences. 1,92,73,000 1,92,73,000

(iv) Duty drawback claim granted and later revoked. 7,04,000 7,04,000

(v) Capital Commitments on unexecuted Contract. 8,68,545 -

(vi) The Income Tax Assessments have been completed upto the Assessment year 2010-11 and there is no demand raised by Income tax Department.

2. In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value stated, if realised in the ordinary course of business. The provision for depreciation and all known liabilities is adequate and not in excess of the amount reasonably necessary.

3. In respect of fixed assets the provision for impairment loss of Rs. 61,48,923/- on existing Fixed Assets.

The food processing factory was partially working in the past when impairment provision was made in respect of all assets including food processing factory.

During the current year the company has decided to focus on growth in sale of food products and has taken steps to renovate the factory building to get HACCP Certification which certifies maintenance of hygiene and sanitation standards in production of food products. Accordingly, the management has reviewed the realizable value of factory building in use and have written back partially the impairment loss of Rs. 1,11,83,700/-

4. The Company has effected transfer of Lease Hold rights of the plot obtained from GIDC and the sale of factory building built thereon. However formal consent of GIDC is awaited.

5. The Company has continued the Gratuity Scheme of LIC and has made provision for Gratuity, after considering the corpus with LIC under the scheme, on actual ascertainment of liability.

6. The Company has unabsorbed depreciation and carried forward losses etc available for set off under Income Tax Act 1961. However in view of present uncertainty regarding generation of sufficient future taxable income, Net Deferred Tax Asset in respect of related credit for the year has not been recognised in the accounts on prudent basis.

7. The names of Micro, Small and Medium Enterprises to whom the company owes sums exceeding Rs. 1 Lakh each and which are outstanding for more than 30 days as at 31st March, 2014 are NIL as the vendors of the company have not filed intimation about their recognition as "Supplier" under the provisions of The Micro Small & Medium Enterprises Development Act 2006.

8 The company operates mainly in food processing segment.

9. Related party relationships have been identified by the management and relied upon by the auditors.

10. Transaction with Related Parties

a) List of Related Parties

With whom transactions have taken place during the year Associate Company

New Vision Imaging Private Limited

New Vision Printing Services Private Limited

La Costa Enterprises Private Limited

Cherish Specialties Limited

Performance Logistics (India) Private Limited

Key Management Personnel

A.Y. Fazalbhoy

B. S. Sridhara

11. Previous year''s figures have been regrouped where necessary.


Mar 31, 2013

2013 2012 Rs. Rs.

1. Contingent Liabilities not provided for:

(i) Claims for Sales Tax/Excise/Service tax not accepted by the Company for which appeals are pending 3,34,93,973 4,69,81,313

(ii) Claims against the Company not acknowledged as debts. 11,33,669 1,32,25,000

(iii) Export obligations not fulfilled against EPCG licences. 1,92,73,000 1,92,73,000

(iv)Duty drawback claim granted and later revoked. 7,04,000 7,04,000

(v) The Income Tax Assessments have been completed upto the Assessment year 2010-11 and there is no demand raised by Income tax Department.

(vi)Penalty imposed by Commissioner - Customs & Central Excise, Goa, in respect of CVD on bulk (semi-packed / semi-finished) films which were imported by Phil Marketing Services Pvt. Ltd. and given to Company for further packing and in respect of which excise duty has been paid by the Company. Customs, Excise & Service Tax Tribunal, Western Region have passed order in July, 2012 against - 1,70,46,000 the recovery of the penalty.

2. In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value stated, if realised in the ordinary course of business. The provision for depreciation and all known liabilities is adequate and not in excess of the amount reasonably necessary.

3. In respect of fixed assets the provision for impairment loss of Rs. 27116958/- on existing fixed assets is continued. Further the management has reviewed the realisable value of assets in use and are of the opinion that no further provision for impairment of fixed assets is considered necessary.

4. The Company has effected transfer of Lease Hold rights of the plot obtained from GIDC and the sale of factory building built thereon. However formal consent of GIDC is awaited.

5. Gratuity liability in respect of ex-employees and employees transferred to Associate Companies is being paid directly by the Company for which the necessary provision has been made in the Books of Accounts.

6. The Company has unabsorbed depreciation and carried forward losses etc available for set off under Income Tax Act 1961. However in view of present uncertainty regarding generation of sufficient future taxable income, Net Deferred Tax Asset in respect of related credit for the year has not been recognised in the accounts on prudent basis.

7. The names of Micro, Small and Medium Enterprises to whom the company owes sums exceeding Rs. 1 Lakh each and which are outstanding for more than 30 days as at 31st March, 2013 are NIL as the vendors of the company have not filed intimation about their recognition as "Supplier" under the provisions of The Micro Small & Medium Enterprises Development Act 2006.

8 The company operates mainly in food processing segment.

9. Previous year''s figures have been regrouped where necessary.


Mar 31, 2012

1. Contingent Liabilities not provided for:

(i) Claims for Sales Tax/Excise/Service tax not accepted by the Company for which appeals are pending 4,69,81,313 4,73,85,313

(ii) Claims against the Company not acknowledged as debts. 1,32,25,000 1,32,25,000

(iii) Export obligations not fulfilled against EPCG licences. 1,92,73,000 1,92,73,000

(iv)Duty draw back claim granted and later revoked. 7,04,000 7,04,000

(v) The Income Tax Assessments have been completed upto the Assessment year 2008-09 and there is no demand raised by Income tax Department. - -

(vi) Penalty imposed by Commissioner-Customs & Central Excise, Goa, in respect . of CVD on bulk (semi-packed/semi-finished) films which were imported by Phil .

Marketing Services Pvt. Ltd. and given to Company for further packing And in 1,70,46,000 1,70,46,000 respect of which excise duty has been paid by the Company. Customs, Excise & Service Tax Tribunal, Western Region have granted stay against the recovery of the penalty.

2. In respect of fixed assets the provision for impairment loss of Rs. 5,18,82,172/- on existing fixed assets is continued. Further the management has reviewed the realisable value of assets in use and are of the opinion that no further provision for - impairment of fixed assets is considered necessary.

3. Gratuity liability in respect of bx-employees and employees transferred to Associate Companies is being paid directly by the Company for which the necessary provision has been made in the Books of Accounts.

4. The Company has unabsorbed depreciation and carried forward losses etc available for set off under Income Tax Act 1961. However in view of present uncertainty regarding generation of sufficient future taxable income, Net Deferred Tax Asset in respect of related credit for the year has not been recognised in the accounts on prudent basis.

5. The realisability of Defferred Tax Assets of erstwhile subsidary has been reviwed and adjustment has been made in the previous year.

6. The names of Micro, Small and Medium Enterprises to whom the company owes sums exceeding Rs. 1 Lakh each and which are outstanding for more than 30 days as at 31st March, 2012 are NIL as the vendors of the company have not filed intimation about their recognition as "Supplier" under the provisions of The Micro Small & Medium Enterprises Development Act 2006.

7 On account of uncertainty of restructuring of business no segment reporting can be done.

8. Previous year's figures have been regrouped where necessary.


Mar 31, 2011

1. SCHEME OF AMALGAMATION

In accordance with the Scheme of Amalgamation (the" Scheme") as approved by the Hon'ble High Court of Bombay at Goa vide its orders dated 06-08-2010 the whole business and affairs of the erstwhile GOKHATAK ENTERPRISES LIMITED the Wholly owned Subsidiary of the Company (the "Transferor Company") have been transferred to and vested in the Company with effect from the Appointed Date i.e. 01-04-2008. The scheme has accordingly been given effect to in the accounts.

The amalgamation being in the nature of merger has been accounted for under "Pooling of interests method" of accounting as prescribed by Accounting Standard (AS)

2 "Accounting for Amalgamation" issued by the Institute of Chartered Accountants of India.

As per the scheme all the Assets and Liabilities of the Transferor Company have been taken at book value.

As per the Scheme, w.e.f. 1st April, 2008 upto 6th August, 2010 erstwhile Transferor Company has been carrying its business in "trust" on behalf of the Company. All the Income and Expenditure of the Transferor Company have been included in the Company.

2. Contingent Liabilities not provided for: 2011 2010 Rs. Rs.



(i) Estimated amounts of contract - 5,00,000 remaining to be executed on capital account not . provided for (net of ad vances)

(ii) Claims for Sales Tax / Excise / 4,73,85,313 9,59,72,654 Service Tax not accepted by the Company for which appeals are pending.

(iii) Claims against the Company not 1,32,25,000 2,50,42,516 acknowledged as debts. -

(iv) Export obligations not fulfillied 1,92,73,000 1,92,73,000 against advance/EPCG licences.

(v) Duty drawback claim granted and 7,04,000 7,04,000 later revoked.

(vi) Counter Guarantee given to bankers - 15,97,000 against guarantee given by them for Sales . Tax and Deposit for Electricity.

(vii) The Income Tax Assessments have - - been completed upto the Assessment Year 2008-09 and there is no demand raised by Income Tax Department.

(viii)Penalty imposed by Commissioner 1,70,46,000 1,70,46,000 - Customs & Central Excise, Goa, in respect of CVD on bulk (semi-packed / semi-finished) films which were imported by Phil Marketing Services Pvt. Ltd. and given to the Company for further packing and in respect of which Excise Duty has been paid by the Company. Customs,Excise & Service Tax Tribunal, Western Region have granted stay against the recovery of the penalty. 3. 1,00,000 -13.75% Redeemable Cumulative Preference Shares of Rs. 100 each of the Company are held equally by General Insurance Corporation of India and New India Assurance Co. Ltd. These were due for redemption in June 2003. Dividend on Non Convertible Cumulative Redeemable Preference Shares upto the due date of Redemption not provided for, there being no profit : Rs. 41,25,000/-. Proposal for settlement of redemption of the said Preference Shares and waiver of right to cumulative dividend has been submitted by the Company.

4. In respect of Fixed Assets the provision for impairment loss of Rs. 5,18,82,172/- on existing Fixed Assets is continued. Further the management has reviewed the realisable value of assets in use and are of the opinion that no further provision for impairment of fixed assets is considered necessary.

5. During the financial year 2007-08 the Company had funded the actual liability for gratuity in respect of continuing employees amounting to Rs. 28,39,032/-. Further liability in respect of the gratuity based on the actuarial valuation informed by LIC has been provided in the Books of Accounts and funded. Gratuity liability in respect of ex- employees and employees transferred to Associate Companies is being paid directly by the Company for which the necessary provision has been made in the Books of Accounts.

6. The Company has unabsorbed depreciation and carried forward losses etc. available for set off under Income Tax Act 1961. However in view of present uncertainty regarding generation of sufficient future taxable income, Net Deferred Tax Asset in respect of related credit for the year has not been recognised in the accounts on prudent basis.

7. The readability of Deferred Tax Assets of erstwhile subsidiary has been reviewed and adjustment has been made in the current year.

8. Extraordinary items relate to write back of Provision made in earlier year for Sales-tax, arising due to favourable decision of Tribunal and of cessation of liability for customs duty on goods in Bonds.

9. Cost of goods sold includes the value of Rs. 17,98,097/-of obsolete stocks written off during the year.

10. Earning in Foreign Currency Exports of Goods on F.O.B. basis

11. The names of Micro, Small and Medium Enterprises to whom the Company owes sums exceeding Rs. 1 lac each and which are outstanding for more than 30 days as at 31st March, 2011 are nil; as the vendors of the Company have not filed intimation about their recognition as "Supplier" under the provisions of The Micro, Small & Medium Enterprises Development Act, 2006.

12. On account of uncertainty of restructuring of business no segment reporting can be done.

13. Previous year's figures have been regrouped where necessary.


Mar 31, 2010

1. SCHEME OF AMALGAMATION

In accordance with the Scheme of Amalgamation (the" Scheme") as approved by the Honble High Court of Bombay at Goa vide its orders dated 06-08-2010 the whole business and affairs of the erstwhile GOKHATAK ENTERPRISES LIMITED the Wholly owned Subsidiary of the Company (the "Transferor Company") have been transferred to and vested in the Company with effect from the Appointed Date i.e. 01-04-2008. The scheme has accordingly been given effect to in the accounts.

The amalgamation being in the nature of merger has been accounted for under "Pooling of interests method" of accounting as prescribed by Accounting Standard (AS) 14 "Accounting for Amalgamation" issued by the Institute of Chartered Accountants of India.

As per the scheme all the Assets and Liabilities of the Transferor Company have been taken at book value.

As per the Scheme, w.e.f. 1st April, 2008 upto 6th August, 2010 erstwhile Transferor Company has been carrying its business in "trust" on behalf of the Company. All the Income and Expenditure of the Transferor Company have been included in the Company.

The audited Consolidated Accounts of the Company for the year ended 31st March, 2009, which were circulated to the members of the Company for the 26th AGM held on 25th September, 2009, have become merged accounts of the Company andhave therefore been incorporated in the previous years figures for F. Y. 2008-09 in the statement of Accounts for the financial year ended 31st March, 2010. While giving effect to the amalgamation of the Subsidiary Company capital reserve on consolidation has been adjusted against the brought forward losses.

2. Contingent Liabilities not provided for:

(i) Estimated amounts of contract remaining to be executed on capital account not 5,00,000 provided for (net of advances)

(ii) Claims for Sales Tax / Excise / Service Tax not accepted by the Companies for 9,59,72,654 8,87,28,784 which appeals are pending.

(iii) Claims against the Company not acknowledged as debts. 2,50,42,516 2,50,42,516

(iv) Export obligations not fulfillied against advance /EPCG licences. 1,92,73,000 1,92,73,000

(v) Duty drawback claim granted and later revoked. 7,04,000 7,04,000

(v) Counter Guarantee given to bankers against guarantee given by them for Sales 15,97,000 15,97,000 Tax and Deposit for Electricity.

(vii) The Income Tax Assessments have been completed upto the Assessment Year - 10,99,583

2006-07 and there is no demand raised by Income Tax Department. The Liability for A. Y. 1998-99 of Rs. 10,99,593/- stands deleted.

(viii) Penalty imposed by Commissioner - Customs & Central Excise, Goa, in respect of 1,70,46,000 1,70,46,000 CVD on bulk (semi-packed / semi-finished) films which were imported by Phil Marketing Services Pvt. Ltd. and given to the Company for further packing and in respect of which Excise Duty has been paid by the Company. Customs, Excise & Service Tax Tribunal, Western Region have granted stay against the recovery of the penalty.

3. 1,00,000 -13.75% Redeemable Cumulative Preference Shares of Rs. 100 each of the Company are held equally by General Insurance Corporation of India and New India Assurance Co. Ltd. These were due for redemption in June 2003. Dividend on Non Convertible Cumulative Redeemable Preference Shares upto the due date of Redemption not provided for, there being no profit Rs. 41,25,000/-. Proposal for settlement of redemption of the said Preference Shares and waiver of right to cumulative dividend has been submitted by the Company.

4. In respect of Fixed Assets the provision for impairment loss of Rs. 5,18,82,172/- on existing Fixed Assets is continued. Further the management has reviewed the realisable value of assets in use and are of the opinion that no further provision for impairment of fixed assets is considered necessary. During the year the impairment loss of the erstwhile wholly owned subsidiary Gokhatak Enterprises Limited which has been merged with the Company has been reversed due to the sale / scrap of Assets.

5. During the financial year 2007-08 the Company had funded the actual liability for gratuity in respect of continuing employees amounting to Rs. 28,39,032/-. Further liability in respect of the gratuity based on the actuarial valuation informed by LIC has been provided in the Books of Accounts and Funded. Gratuity liability in respect of ex-

6 employees and employees transferred to Associate Companies is being paid directly by the Company.for which the necessary provision has been made in the Books of Accounts.

7. The Company has unabsorbed depreciation and carried forward losses etc: available for set off under Income Tax Act 1961. However in view of present uncertainty regarding generation of sufficient future taxable income, Net Deferred Tax Asset in respect of related credit for the year has not been recognised in the accounts on prudent basis.

8. The names of Small Scale Industrial Undertaking and to whom the Company owes sums exceeding Rs. 1 lac each and which are outstanding for more than 30 days as at 31 st March, 2010 are nil; as the vendors of the Company have not filed intimation about their recognition as "Supplier" under the provisions of the Small Scale Industrial Undertaking Development Act, 2006.

9. Previous years figures have been regrouped where necessary.

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