to the Members
Mukand Engineers Limited
Report on the Financial Statements
We have audited the accompanying financial statements of M/s Mukand engineersLimited ("the Company") which comprise the Balance Sheet as at March 312017 the Statement of Profit and Loss Cash Flow Statement for the year then ended and asummary of significant 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 Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements to give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards referred to inSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities;selection and application of appropriateaccounting policies; making judgments andestimates that are reasonable and prudent; anddesign implementation andmaintenance of adequate internal financial controls that areoperating effectively forensuring the accuracy and completeness of the accounting recordsrelevant to thepreparation and presentation of the financial statements that give a trueand fairview and are free from material misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based onouraudit. We have taken into account the provisions of the Act and the Rules made there underincluding the Accounting and Auditing Standards and matters which are required to beincluded in the audit report.
We have conducted our audit in accordance with the Standards on Auditing specifiedunder Section 143(10) of the Act. Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditors'judgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give true and fair view in order to design audit procedures thatare appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2017 and its Loss and its cash flows for the year ended on that date.
Emphasis of Matter
We draw attention to the following matter in notes to Financial Statements:
(i) Note No. 28 to the financial statements relating to overdue loans aggregating Rs.44300000/- (Previous Year Rs. 58800000/-) and Interest
Receivable thereon aggregating Rs. 22271683 /- (Previous Year Rs. 29228810/-)at the end of the year that are due from investment companies whose net worth haveeroded. The Management's assessment on the recoverability from the financial assets ofthese companies is subject to uncertainties and which if do not materialize couldsignificantly impact the carrying values of the aforesaid loans & interest thereon.Our report is not modified in respect of the above matter.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of sub-section (11) of the section 143 of the Act(hereinafter referred to as "the Order") and on the basis of such checks of thebooks and records of the Company as we considered appropriate and according to theinformation and explanations given to us we give in the "Annexure A" astatement on the matters specified in 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 bestof our knowledge and belief were necessary for the purpose of our audit.
b. 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.
c. The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account.
d. In our opinion the Balance Sheet Statement of Profit and Loss and Cash FlowStatement comply with the Accounting Standards specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014.
e. On the basis of written representations received from the Directors as on March 312017 and taken on record by the Board of Directors none of the Directors is disqualifiedas on March 31 2017 from being appointed as a Director in terms of Section 164(2) of theAct.
f. 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".
g. With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our knowledge and belief and according to the information andexplanations given to us:
i. The Company has disclosed the impact if any of pending litigations as at 31stMarch 2017 on its financial position in its financial statements as referred to in Note27 to the financial statements.
ii. The Company has made provision as at March 31 2017 as required under theapplicable law or accounting standards for material foreseeable losses if any onlong-term contracts. The Company has not entered in to any Derivative Contracts during thefinancial year.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company uring the year ended March 312017.
iv. The Company has provided requisite disclosures in the standalone financialstatements as to holding as well as dealings in Specified Bank Notes during the periodfrom 8th November 2016 to 30th December 2016 on the basis ofinformation available with the Company. Based on audit procedures and relying onmanagement's representation we report that disclosures are in accordance with the booksof accounts maintained by the Company and as produced to us by the Management.- Refer NoteNo.39
GIRISH M. PATHAK
Membership No. 102016
For and on behalf of
K.K. MANKeSHWAR & co.
Mumbai May 24 2017
ANNEXURE A TO INDEPENDENT AUDITORS' REPORT
(The Annexure referred to in our report to the members of Mukand engineers Limited(the Company') for the year ended March 31 2017.)
(i) In respect of its Fixed Assets:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As per the explanation given to us the Fixed Assets were physically verified bythe Management in accordance with a regular programme covering all the assets over aperiod of three years which in our opinion is reasonable having regard to the size ofthe Company and the nature of its assets. Pursuant to the program the management duringthe year has physically verified a portion of the fixed assets and no materialdiscrepancies were noticed on such verification. In our opinion this periodicity ofphysical verification is reasonable having regard to the size of the Company and nature ofis assets.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company does not hold any immovableproperties in its name.
(ii) The physical verification of inventory excluding stocks with third parties andcontractors has been conducted at reasonable intervals by the Management during the year.In respect of inventory lying with third parties these have substantially been confirmedby them. In our opinion the frequency of verification is reasonable.
(iii) In our opinion and according to information and explanations given to us theCompany has not granted any loans secured or unsecured to Companies firms or otherparties covered in the register maintained under Section 189 of the Act during the year.Consequently clauses (iii) (a) (iii) (b) and (iii) c of paragraph 3 of the Order are notapplicable to the Company.
(iv) In our opinion and according to the information and explanations given to us theCompany has not granted any loans or provided any guarantees or security in respect of anyloans to any party covered under Section 185 and 186 of the Act. The Company has compliedwith the provisions of Section 186 of the Act in respect of investments made in bodycorporate.
(v) In our opinion and according to the information and explanations given to us theCompany has generally complied with the directives issued by the Reserve Bank of India andthe provisions of Sections 73 to 76 or any other provisions of the Act and the Companies(Acceptance of Deposits) Rules 2014 to the extent notified with regard to depositsaccepted from the public. The Company not being an "Eligible Company" as definedin Companies (Acceptance of Deposits) Rules 2014 sought and obtained the approval fromthe Company Law Board for extension in time limit for repayment of Public Depositsoutstanding as on March 31 2015 on the respective due dates of maturity.
(vi) The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the services rendered by the Company.
(vii) In respect of Statutory Dues:
(a) According to the information and explanations given to us and the records of theCompany examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues including Provident Fund Investor Education and ProtectionFund Employees' State Insurance Income Tax Sales Tax including Value Added Tax ServiceTax Entry Tax Cess and other material statutory dues as applicable to it with theappropriate authorities. As explained to us there were no dues towards Custom DutyWealth Tax and Excise Duty during the year.
According to information and explanations given to us there were no undisputed amountspayable in respect of Income Tax Service Tax Entry Tax Value Added Tax Cess and othermaterial statutory dues in arrears as on 31st March2017 for a period of more than sixmonths from the date they become payable.
(b) According to information and explanations given to us upon our enquiries in thisregard and records of the Company the following statutory dues in respect of Income TaxWorks Contract Tax Entry Tax and Service Tax as at 31st March 2017 have notbeen deposited by the Company on account of disputes:
|Nature of dues ||Amount Rs. ||Period to which the amount relates ||Forum where the dispute is pending |
|Income Tax ||8622250 ||2000-2001 2001-2002 ||High Court of Bombay |
|Income Tax ||8455448 ||1999-2000 ||Income Tax Appellate Tribunal |
| || ||2005-2006 || |
|Income Tax ||1613533 ||2011-2012 to 2012-2013 ||Commissioner of Income Tax |
|Income Tax ||9895634 ||2002-2003 to 2012-2013 ||Income Tax Department Authorities |
|Works Contracts Tax ||7583974 ||2001-2002 and 2002-2003 ||High Court |
|Works Contracts Tax ||18891961 ||2001-2002 to 2004-2005 2011-2012 2012-2013 2014-2015 ||Sales Tax Department Authorities |
|Entry Tax ||811173 ||1999-2000 to 2002-2003 ||High Court Odisha |
|Entry Tax ||127835 ||2003-2004 ||Asst. Commissioner (Sales Tax) |
| || ||1999-2000 || |
(viii) According to the records of the Company examined by us and information andexplanations given to us the Company has not defaulted in repayment of dues to anyfinancial institution or bank during the year. There are no dues to any debenture holders.
(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyclause (ix) of paragraph 3 of the Order is not applicable.
(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud on or by the Company noticed or reported during the year norhave we been informed of such case by the Management.
(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly clause (xii) of paragraph 3 of the Order isnot applicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable. The details of relatedparty transactions have been disclosed in the financial statements as required underAccounting Standard (AS)18 related party disclosures as specified under section 133 ofthe Act read with Rule 7 of the Companies (Accounts) Rules 2014.
(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with Directors or persons connected with him. Accordingly clause (xv) ofparagraph 3 of the Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of clause (xvi) of paragraph 3 of theOrder are not applicable to the Company.
GIRISH M. PATHAK
Membership No. 102016
For and on behalf of
K.K. MANKESHWAR & CO.
Mumbai May 24 2017
ANNEXURE B TO INDEPENDENT AUDITORS' REPORT
Report on the internal Financial controls under clause
(i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of MukandEngineers Limited ("the Company") as of March 31 2017 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.
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 Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India(ICAI'). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to Company's policiesthe safeguarding 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 Companies Act 2013 ("theAct").
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on audit. We conducted our audit in accordancewith the Guidance Note and the Standards on Auditing deemed to be prescribed under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and both issued by ICAI. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand 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 auditor's 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 thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorizations ofmanagement and Directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany's assets that could have a material 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 controlover 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 31st March 2017based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
GIRISH M. PATHAK
Membership No. 102016
For and on behalf of
K.K.MANKeSHWAR & co.