Mukesh Strips Ltd.
|BSE: 517374||Sector: Metals & Mining|
|NSE: N.A.||ISIN Code: INE946G01013|
|BSE 00:00 | 04 Mar||Mukesh Strips Ltd|
|NSE 05:30 | 01 Jan||Mukesh Strips Ltd|
|BSE: 517374||Sector: Metals & Mining|
|NSE: N.A.||ISIN Code: INE946G01013|
|BSE 00:00 | 04 Mar||Mukesh Strips Ltd|
|NSE 05:30 | 01 Jan||Mukesh Strips Ltd|
INDEPENDENT AUDITORS' REPORT
To The Members of
MUKESH STRIPS LIMITED
Village Dhandari Khurd
Near Phase VII Focal Point
Report on the Standalone Financial Statements
We have audited the accompanying financial statements of MUKESH STRIPS LIMITED ("theCompany") which comprise the Balance Sheet as at 31st March 2016 the Statement ofProfit & Loss and Cash Flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information.
Management's Responsibility for the Standalone 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 standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theAccounting Principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified underSection 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 misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment 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 a true and fair view in order to design audit proceduresthat are 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 standalone financial statements.
Basis for Qualified Opinion
We report that:
(i) The company has not arranged to make available the confirmations and/orreconciliations to verify the balances stated in the financial statements in respect of:
Trade Receivables ' 765.45 Lacs Advances to Suppliers ' 150.79 Lacs and Trade Payables' 165.58 Lacs.
We have also not been able to perform any alternative procedures with regard toverification of the aforesaid balances and thereby have been unable to obtain sufficientappropriate audit evidence regarding the aforesaid accounts. We are unable to comment uponthe difference if any which may arise upon the receipt of confirmations and/or thecarrying out of such reconciliation.
(ii) The company has not made provision in respect of trade receivables which aredoubtful in nature amounting to Rs. 207.26 Lacs as on the date of financial statements.
(iii) We further report that except for the effect if any of the matters stated inparagraph (i) above which are not ascertainable had the impact of our observation made inparagraph (ii) above
been considered then loss for the year ended 31 March 2016 would have been 1009.21Lacs against reported figure of ' 801.95 Lacs and reserve and surplus would have been ('834.82 Lacs) against reported figure of (' 627.56 Lacs) and current asset would have been' 2183.85 Lacs (against the reported figure of ' 2391.11 Lacs) and
(iv) The earning (loss) per share for the year ended 31 March 2016 would have been(27.57) against reported earning (loss) per share of ('21.91)
In our opinion and to the best of our information and according to explanations givento us subject to our comments in Basis of Qualified Opinion above theaforesaid standalone 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 March312016 and its loss and its cash flows for the year ended on that date.
Emphasis of Matter
Without qualifying our opinion we draw attention to the followings:
(i) We draw attention to Note No. 37 in the financial statement. The manufacturingoperations of the Company have been suspended from the close of 31 March 2016 and thecompany has surrendered its Excise Registration Certificate with the authorities videletter dated 5th April 2016 and the bank has also recalled its debts due fromthe Company.
These events indicate the existence of a material uncertainty that cast significantdoubt about the Company's ability to continue as a going concern. The appropriateness ofthe going concern assumption is dependent on the company's ability to establishedconsistent profitable operations and generate positive cash flows as well as raisingadequate finance to meet its short term and long term obligations.
Based on the mitigating factors stated in the said note the management of the companybelieves that the going concern assumption is appropriate and has prepared the financialstatements on going concern assumption.
Report on Other Legal and Regulatory Requirements
1. As required by the section 143(3) of the Act we report that:
a) We have sought and obtained all the information and explanations subject tomatters stated in Basis of Qualified Opinion' above which to the best ofour 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 theCompany so far as it appears from our examination of those books;
c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;
d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 except as stated in para Basis of QualifiedOpinion' above;
e) On the basis of written representations received from the directors as on March312016 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312016 from being appointed as a director in term of section 164(2) of theAct.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operative effectiveness of such controls refer AnnexureA' to this report; and
g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its financial statements as referred to note no. 29(c) 29(d) 39 42 and 43to the financial statements.
ii. The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central
Government of India in terms of sub-section (11)of section 143 of the Act we give inthe
Annexure B' a statement on the matters specified in paragraphs 3 and 4 of theOrder to the
ANNEXURE A' TO THE INDEPENDENT AUDITOR'S REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of MukeshStrips Limited ('the Company') as of March 31 2016 in conjunction with our audit ofthe standalone financial statements of the Company for the year ended on that date.
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 Reportingissued by the Institute of Chartered Accountants of India (ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls 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 judgement 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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.
Basis of Qualified Opinion
According to the information and explanations given to us and based on our audit thefollowing material weakness has been identified in the operating effectiveness of theCompany's internal financial controls over financial reporting as at March 31 2016.
(i) The Company's internal financial controls with respect to obtaining customer/vendorconfirmations and their reconciliations with the books of accounts at regular intervalswere not operating effectively which could potentially result in misstatement ofreceivables/payables.
(ii) The Company's internal financial controls with regard to making provision inrespect of balances recoverable from Trade Receivables Loans and Advances and otherrecoverables which are doubtful in nature were not effective.
A material weakness' is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the company's annual or interim financialstatements will not be presented or detected on a timely basis.
In our opinion the Company has subject to the possible effects of the materialweakness described above in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31 2016 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.