The members of
M.K. EXIM (INDIA) LIMITED
Report on the Consolidated Financial Statements
We have audited the accompanying Consolidated financial statements of M.K. EXIM (INDIA)LIMITED (" hereinafter referred to as the Holding Company") and its subsidiary(the Holding Company and its subsidiary together referred to as "the Group")which comprise the Consolidated Balance Sheet as at 31st March 2017 the ConsolidatedStatement of Profit and Loss and Consolidated Cash Flow Statement for the year then endedand a summary of significant accounting policies and other explanatory information("hereinafter referred to as the Consolidated financial statements")
Management's responsibility for Consolidated Financial Statements
The Holding Company's Board of Directors is responsible for preparation of theseconsolidated financial statements in terms of the requirements of the Companies Act 2013("the Act") that give a true and fair view of the consolidated financialposition consolidated financial performance and consolidated cash flows of the group inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. The holding company's Board of Directors is alsoresponsible for ensuring accuracy of record including financial information considerednecessary for the preparation of Consolidated Financial Statements. The respective Boardof Directors of the companies including its subsidiary are responsible for maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Group its subsidiary and for preventing and detecting frauds and otherirregularities ; the selection and application of appropriate accounting policies ; makingjudgements and estimates that are reasonable and prudent; and the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error which has beenused for the purpose of preparation of the consolidated financial statements by Directorsof the Holding company as aforesaid.
Our responsibility is to express an opinion on these consolidated financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions 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 and other applicable authoritative pronouncements issued by theInstitute of Chartered Accountants of India. Those standards and pronouncements requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the consolidated financial statements are free ofmaterial misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the consolidated financial statements. The procedures selected depend onthe auditor's judgement including the assessment of the risks of material misstatementsof consolidated financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Holdingcompany's preparation of the consolidated financial statements that give a true and fairview in order to design audit procedures that are appropriate in the circumstances. Anaudit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Holding company's Board ofdirectors as well as evaluating the overall presentation of the consolidated financialstatements.
We believe that the audit evidence obtained by us and audit evidence obtained by otherauditors in terms of their auditor's report referred to in sub-paragraph on Other Matterbelow is sufficient and appropriate to provide a basis for our audit opinion on theconsolidated financial statements.
Emphasis of Matters
We draw attention to the following matters in the Notes to the financialstatements:AS-15 for Employees Benefits (Revised 2005) in respect of Provision forGratuity. The Provision for Gratuity provided by the company is inadequate and its effecton liabilities and profit of the Company is unascertainable. Further requisitedisclosures are not made in respect of retirement benefits
Our opinion is not modified in respect of this matter.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid consolidated financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the consolidated state of affairs ofthe Group as at 31st March 2017 and its consolidated profit and consolidatedcash flows for the year ended on that date.
We did not audit the financial statements of its subsidiary Kolba Farm Fab PrivateLimited refecting total assets of Rs. 645.31 lacs total revenue of Rs.337.09 lacs netprofit of Rs.79.42 lacs and net cash flow amounting to (Rs. -1.01 Lakh) for the year endedon that date as considered in consolidated financial statements and our report in termsof sub sections 3 & 11 of section 143 of the Act in so far as it relates to theaforesaid subsidiary is based only on the report of other auditors.
Our opinion on the consolidated financial statements and our report on Other Legal andRegulatory requirements below is not modified in respect of the above matters withrespect to our reliance on the work done and the report of the other auditors andfinancial statements certified by the management.
Report on Other Legal and Regulatory Requirements
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 purposes of our audit of the aforesaidconsolidated financial statements.
b. In our opinion proper books of account as required by law have been kept by theholding company and its subsidiary including relevant records relating to preparation ofthe aforesaid consolidated financial statements have been kept so far as appears from ourexamination of those books of the Holding Company and the report of the other auditors.
c. The Consolidated Balance Sheet the Consolidated Statement of Profit and Loss andthe Consolidated Cash Flow Statement dealt with by this report are in agreement withrelevant books of account maintained by holding company and its subsidiary relating to thepreparation of Consolidated Financial Statements
d. In our opinion the aforesaid Consolidated Financial Statements comply with theAccounting Standards referred to in Section 133 of the Companies Act 2013 read with rule7 of the Companies (Accounts) Rules 2014.
e. On the basis of written representations received from the Directors as on 31stMarch 2017 and taken on record by the Board of Directors of the Holding Company andthe report of statutory auditors of subsidiary company we report that none of thedirectors is disqualified as on 31st March 2017 from being appointed as adirector in terms of Section 164(2) of the Act.
f. With respect to the adequacy of the internal financial controls over financialreporting of the Holding company and its subsidiary and the operating effectiveness ofsuch controls refer to our separate report in Annexure A.
g. With respect to the other matter 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 Group does not have any pending litigation which would impact its financialposition.
ii. The Group 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.
For Vimal Agrawal & Associates
(V. K. Agrawal)
Place : Jaipur
Date : 30th May 2017
ANNEXURE A TO INDEPENDENT AUDITORS' REPORT
Referred to in paragraph in the Independent Auditors' Report of even date to themembers of M.K. Exim (India) Limited on the consolidated financial statements for the yearended 31st March 2017.
Report on the Internal Financial Controls under Cause (i) of Sub-section 3 of
Section 143 of the Act
1. We have audited the internal financial controls over financial reporting of M.K.Exim (India) Limited ("the Holding Company") & its subsidiary company as of31st March 2017 in the conjunction with our audit of the consolidatedfinancial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
2. The respective Board of Directors of the Holding Company and its subsidiary areresponsible for establishing and maintaining internal financial controls based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India (ICAI). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence torespective company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under the Act.
3. 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 deemed to be prescribedunder section 143 (10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining and 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.
5. We believe that the audit evidence we have obtained and the audit evidence obtainedby other auditors in terms of their report referred to in the Other Matters paragraphbelow is sufficient and appropriate to provide a basis for our audit opinion on theCompany's internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that
i. Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
ii. Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
iii. Provide reasonable assurance regarding prevention of timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of internal Financial Controls Over Financial Reporting
7. 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.
8. In our opinion the Holding Company and its subsidiary have in all materialrespects an adequate internal financial controls system over financial reporting and suchinternal financial controls over financial reporting were operating effectively as at 31stMarch 2017 based on the internal control over financial reporting criteria establishedby the Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants of India.
9. Our aforesaid reports under section 143(3)(i) of the Act adequacy and operatingeffectiveness of the internal financial controls over financial reporting insofar as itrelates to the subsidiary company is based on the corresponding report on the auditors ofsubsidiary company. Our opinion is not qualified in respect of this matter.
For Vimal Agrawal & Associates
(V. K. Agrawal)
Place : Jaipur
Date : 30th May 2017