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M M Rubber Co Ltd.

BSE: 509196 Sector: Others
NSE: N.A. ISIN Code: INE159E01026
BSE 00:00 | 23 Sep 30.40 -1.60
(-5.00%)
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NSE 05:30 | 01 Jan M M Rubber Co Ltd
OPEN 30.40
PREVIOUS CLOSE 32.00
VOLUME 30
52-Week high 74.25
52-Week low 22.00
P/E
Mkt Cap.(Rs cr) 19
Buy Price 30.40
Buy Qty 300.00
Sell Price 32.95
Sell Qty 300.00
OPEN 30.40
CLOSE 32.00
VOLUME 30
52-Week high 74.25
52-Week low 22.00
P/E
Mkt Cap.(Rs cr) 19
Buy Price 30.40
Buy Qty 300.00
Sell Price 32.95
Sell Qty 300.00

M M Rubber Co Ltd. (MMRUBBER) - Auditors Report

Company auditors report

To The Members of M M Rubber Company Limited Report on the Audit of the FinancialStatements:

Qualified Opinion

We have audited the accompanying financial statements of M M Rubber Company Limited(The Company) Bangalore which comprise the Balance Sheet as at 31st March 2019 theStatement of Profit & Loss (including Other Comprehensive income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofsignificant accounting policies and the other explanatory information. (Hereinafterreferred to as “Financial Statements”). In our opinion and to the best of ourinformation and according to the explanations given to us except for disclosure of theinformation referred to in the Basis for Qualified Opinion section of our report theaforesaid financial statements give the information required by the Companies Act2013(“the Act”) in the manner so required and give a true and fair view inconformity with the Indian Accounting Standards) Rules 2015 as amended (“IndAS”) and other accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2019 and profit/loss total comprehensive incomeits cash flows and the changes in equity for the year ended on that date.

Basis for Qualified Opinion

As discussed in

1 . Note No. 35 to the Ind AS financial statements the Company's valuation of finishedgoods for the reasons stated in Note is not valued as per Indian Accounting Standard No.2as at 31 March 2019.

2. Note No.36 to the Ind AS financial statements Ind AS Accounting Standard No.19 onEmployees Retirement Benefits has been complied with except that the Company neither hasascertained nor provided for actuarial value of its gratuity liability and LeaveEncashment as at 31 March 2019.

3. Note No.37 to the Ind AS financial statements in the absence of updation of FixedAsset Register the company is in the process of ascertaining the impairment if any onany of the fixed assets to this extent Ind AS Accounting Standard No.36 (Impairment offixed assets) has not been complied.

4. The balances in Sundry Debtors and Sundry Creditors is subject to confirmation.

5. In the absence of sufficient appropriate evidence we are unable to comment upon theconsequential impact if any on the accompanying Ind AS financial statements.

The financial statements do not adequately disclose this matter. We conducted our auditin accordance with the Standards on Auditing (SAs) specified under section 143(10) of theCompanies Act 2013. Our responsibilities under those Standards are further described inthe Auditor's Responsibilities for the Audit of the Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of theCompanies Act 2013 and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Inaddition to the matter described in the Basis for Qualified Opinion section we havedetermined the matters described below to be the key audit matters to be communicated inour report.

Sl No. Key Audit Matters Auditor's Response
1 Contingent liability on account of Indirect Taxes Principal Audit Procedures
Payable The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes We have involved our Internal experts to review the nature of the amounts payable the sustainability and the likelihood of liability upon final resolution.
Refer Note No. 29(a) of the Financial Statements Company's appeal against the liability has been allowed as per the Final order No. 43171/2018 Dated 31.12.18 passed by Customs excise & service Tax Appellate Tribunal South Zonal bench Chennai.
2 Shifting of Operations to Ranipet Tamil Nadu Principal Audit Procedures
The Company is in process of closing its operation in Chennai factory and shifting of Machinery to the Company owned plant at Ranipet to reduce the burden of overheads Obtained an understanding of the significant management judgements applied in shifting of operations from Chennai to Ranipet and assessed and tested the reasonableness of these judgements.
Refer Note No. 29(b) of the Financial Statements Assessed the appropriateness of the disclosure in the financial statements in accordance with the applicable financial reporting framework.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

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 of these Ind ASfinancial statements that give a true and fair view of the financial position financialperformance including other comprehensive income cash flows and changes in equity of theCompany in accordance with the Accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) . This responsibility also includesmaintenance of adequate accounting records in accordance with the provision of the Act forsafeguarding the assets of the Company and for preventing and detecting frauds and otherirregularities: selection and application of appropriate accounting policies: makingjudgments 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 Ind AS financial statements that give a true and fairview and are free from material misstatements whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit we report to theextent applicable 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.

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 & Loss including other comprehensiveincome the Cash Flow statement and statement of changes in Equity dealt with by thisreport are in agreement with the relevant books of account maintained for the purpose ofpreparation of the financial statements.

d) In our opinion the aforesaid financial statements comply with the Indian AccountingStandards specified under section 133 of Act except for disclosure of the informationreferred to in the Basis for Qualified Opinion section of our report read with relevantRules thereunder:

e) On the basis of the written representations received from the directors as on 31stMarch 2019 and taken on record by the Board of Directors we report that none of thedirectors is disqualified as on 31st March 2019 from being appointed as a director interms of Section 164(2) of the Companies Act 2013.

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”. Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid/provided by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act

h) 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 as amended inour opinion and to the best of our information and according to the explanations given tous:

a) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements as of March 312019.

b) The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

c) There has been no delay in transferring amounts required to be transferred to theInvestor Education 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 Section 143(11) of the Act based onthe comments in the Auditor's Report of the Company and on the auditor's reports issued inaccordance with the Order we give in the annexure ‘A' a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

For M/s. Vandana Rao And Company
Chartered Accountants
FRN No 011628S
(CA.VANDANA.S.RAO)
Place : Bangalore Proprietrix
Date : 30.05.2019 Membership No 218797

ANNEXURE ‘A ‘TO THE AUDITOR'S REPORT

Annexure referred to in Independent Auditor's Report to the members of the company onthe financial statements for the year ended 31st March 2019 we report that:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets; however such Fixed Asset records donot show updated value both in respect of Gross Block and Net Block

(b) The Fixed assets were physically verified by the management in accordance with aregular programme of verification which in our opinion provides for physicalverification of all the fixed assets at reasonable intervals. Accordingly to theinformation and explanations given to us no material discrepancies were noticed on suchverification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the company the title deeds of immovable properties areheld in the name of the company.

(ii) The Inventory has been physically verified during the year by the management atreasonable intervals. There were no material discrepancies noticed on such physicalverification.

(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Companies Act2013. Hence sub clauses (a) (b) and (c) are notapplicable.

(iv) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Companies Act 2013with respect to loans making investments and providing guarantees and securities made.

(v) According to information and explanations given to us the Company has not acceptedany public deposit during the year and does not have any unclaimed deposit. There havebeen no instances where order has been passed by Company Law Board or National Company LawTribunal for any contravention.

(vi) Having regard to the nature of the Company's business/activities reporting underclause (VI) of the order with regard to cost records is not applicable.

(vii) (a) According to the information and explanations given to us and on the basisof our examination of the records of the company has generally been regular in depositingamounts deducted/accrued in the books of account in respect of the undisputed statutorydues including Provident Fund Investor Education & Protection Fund Employees StateInsurance Income-Tax GST Customs Duty Excise Duty Service tax Cess and otherstatutory dues with the appropriate authorities. There were no undisputed amounts payablein respect of Provident Fund Investor Education & Protection Fund Employees StateInsurance Income-Tax GST Customs Duty Excise Duty Service tax Cess and otherstatutory dues with appropriate authorities There were no undisputed amount payable inrespect of provident fund Investor Education & Protection Fund Employees StateInsurance Income- Tax GST Customs Duty Excise Duty Service tax Cess and otherstatutory dues were in arrears as at 31st March 2019 for a period of more than six monthsfrom the date they became payable.

(b)The details of due of excise duty which have not been deposited as on 31st March2019 on account of disputes are given below:

Name of the Statue Nature of Dues Amount Rs in lakhs Period to Which it relates Forum where Pending
Central Excise Laws Excise Duty 1/3/1981 to 31/3/1985 Order dated 5/07/2011 96.30 1980/85 CE Tribunal Chennai

(viii) In our opinion and according to information and explanations given to us thecompany has not defaulted in repayment of dues to any financial institutions banks. TheCompany has not issued any debentures.

(ix) The company did not raise any money by way of initial public offer including Debtinstrument or further public offer or term loans during the year.

(x) According to the information and explanations given to us no material fraud by thecompany or on the company by its officers or employees has been noticed or reported duringthe course of our audit.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the company the company has complied with the requisiteapprovals mandated by the provisions of the section 197 read with schedule 5 to the Act.

(xii) In our opinion and according to the information and explanations given to us thecompany is not a Nidhi company. Accordingly paragraph 3 (xii) of the order is notapplicable.

(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 section 177 and 188 of the Act where applicable and details of suchtransactions has been disclosed in the financial statements as required by the applicableaccounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placements of shares or fully or partly convertible debentures duringthe year.

(xv) According to the information and explanations given to us and based on ourexaminations of the records of the company the company has not entered into non -cashtransactions with directors or persons connected with them and hence provisions ofsection 192 of the companies Act 2013 are not applicable to the Company.

(xvi) The company is not required to be registered under section 45 - 1A of the ReserveBank of India Act1934

For M/s. Vandana Rao And Company
Chartered Accountants
FRN No 011628S
(CA.VANDANA.S.RAO)
Place : Bangalore Proprietrix
Date : 30.05.2019 Membership No 218797

ANNEXURE ‘B ‘TO THE AUDITOR'S REPORT:

Report on the Internal Financial Controls Over Financial reporting under clause (i) ofsub section 3 of section 143 of the Companies Act 2013(the Act)

We have audited the internal financial controls over financial reporting of M. M.Rubber Co Ltd (the Company) as of 31st March 2019 in conjunction with our audit of thefinancial 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 the company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of the reliablefinancial information as required under the companies act 2013.

Auditors' Responsibility:

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 Standards on Auditing prescribed under Section 143(10) of the Act and theGuidance Note on Audit of Internal Financial Controls Over Financial reporting issued bythe Institute of Chartered Accountants of India to the extent applicable to an audit ofInternal Financial controls. Those Standards and the Guidance Note require that we complywith the ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 auditors' judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial 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 controlsover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Basis for Qualified Opinion:

a) The Company has in its books fixed assets with Gross block to the tune of Rs.176791996/- and net block of Rs. 85863650/-. However the fixed assets records donot show updated value both in respect of the Gross Block and Net Block.

Opinion:

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an Internal Financial Controls withreference to financial statements over financial reporting subject to qualified opinionabove and such internal financial controls with reference to financial statements wereoperating effectively as at March 31 2019 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on audit of Internal Financial Controls overfinancial reporting issued by the Institute of Chartered Accountants of India.

For M/s. Vandana Rao And Company
Chartered Accountants
FRN No 011628S
(CA.VANDANA.S.RAO)
Place : Bangalore Proprietrix
Date : 30.05.2019 Membership No 218797

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