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Man Industries (India) Ltd.

BSE: 513269 Sector: Metals & Mining
NSE: MANINDS ISIN Code: INE993A01026
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NSE 00:00 | 17 Jan 54.25 -1.40
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OPEN 55.10
PREVIOUS CLOSE 55.50
VOLUME 15033
52-Week high 74.30
52-Week low 34.55
P/E 10.50
Mkt Cap.(Rs cr) 309
Buy Price 53.55
Buy Qty 2000.00
Sell Price 54.20
Sell Qty 1.00
OPEN 55.10
CLOSE 55.50
VOLUME 15033
52-Week high 74.30
52-Week low 34.55
P/E 10.50
Mkt Cap.(Rs cr) 309
Buy Price 53.55
Buy Qty 2000.00
Sell Price 54.20
Sell Qty 1.00

Man Industries (India) Ltd. (MANINDS) - Auditors Report

Company auditors report

To

The Members of

Man Industries (India) Limited

Report on the Audit of the standalone financial statement's opinion

1. We have audited the accompanying standalone financial statements of Man Industries(India) Limited (the ‘Company') which comprise the Balance Sheet as at 31st March2019 the Statement of Profit and Loss (including Other Comprehensive Income) the CashFlow Statement and the Statement of Changes in Equity for the year then ended and asummary of the significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (the ‘Act') in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in Indiaincluding Indian Accounting Standards (‘Ind AS') specified under Section 133 of theAct of the state of affairs (financial position) of the Company as at 31 March 2019 andits profit (financial performance including other comprehensive income) its cash flowsand the changes in equity for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (‘ICAI') togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the provisions of the Act and the rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

Key Audit Matter

4. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

5. We have determined the matters described below to be the key audit matters to becommunicated in our report

Assessment of the carrying value of investment in and loans granted to its subsidiaryMerino Shelters Private Limited.

(Refer to note 6 and note 15 to the financial statements)

Description of Key Audit Matter

As at 31st March 2019 the carrying amount of a) investment is ' 10229.83 lakhs and b)loan advanced is ' 858.15 lakhs to its wholly owned subsidiary Merino Shelters PrivateLimited. The aggregate exposure of the Company in respect of (a) and (b) above is '11087.98 Lakhs which is significant to the standalone financial statements of theCompany.

Merino Shelters Private Limited is in the process of development of residential /IT/Commercial real estate project at Nerul Navi Mumbai. Considering the current situation ofthe Real Estate industry there are indicators of potential impairment of the Investmentsin subsidiary as set out on (a) and (b) above.

The Management has assessed the impairment by reviewing the business forecasts usingthe “DCF” valuation method which involves the use of management estimates thatare dependent on future economic circumstances and noted that no provision for impairmentis required to be made in respect of these investment in subsidiary and loans advanced(including interest accrued) are considered good.

Considering the materiality of the amounts and due to the management judgement requiredin estimating the quantum of diminution in the value of investment and such estimatesbeing subjective this matter has been identified as a key audit matter.

How our audit addressed the key audit matter

Obtained an understanding of the matter with the management.

Considered the business forecasts with the current market position relating to thedemand and supply of the product.

Considered the work of the external independent valuation expert engaged by the companyand assessed their methods and objectivity.

Examined terminal value of the subsidiary used in the valuation report and tested themathematical accuracy of the underlying calculations.

Based on the above procedures the Management ‘s assessment of impairment in thecarrying value of investments in the subsidiary is reasonable.

Assessment of the carrying value of investment in its subsidiary Man Overseas MetalDMCC

(Refer to note no. 6 to the financial statements)

As at 31st March 2019 the carrying amount of investment is ' 2824.13 lakhs to itswholly owned subsidiary Man Overseas Metal DMCC which is significant to the standalonefinancial statements of the Company.

The Management has assessed the impairment by reviewing the business forecasts usingthe “DCF” valuation method which involves the use of management estimates thatare dependent on future economic circumstances and noted that no provision for impairmentis required to be made in respect of these investment in subsidiary and loans advanced(including interest accrued) are considered good.

Considering the materiality of the amounts and due to the management judgement requiredin estimating the quantum of diminution in the value of investment and such estimatesbeing subjective this matter has been identified as a key audit matter.

How our audit addressed the key audit matter

Obtained an understanding of the matter with the management.

Considered the business forecasts with the current market position relating to thedemand and supply of the product.

Considered the work of the external independent valuation expert engaged by the companyand assessed their methods and objectivity.

Examined terminal value of the subsidiary used in the valuation report and tested themathematical accuracy of the underlying calculations.

Based on the above procedures the Management ‘s assessment of impairment in thecarrying value of investments in the subsidiary is reasonable.

Other Matter

6. We did not audit the financial statements/information of Dubai Branch included inthe standalone financial statements of the Company whose financial statements/financialinformation reflects total assets of ' 12228.85 Lakhs as at March 31 2oi9 (previous year' 8543.55 lakhs) and total operating revenues of ' 6666.29 Lakhs (previous year '49335.21 lakhs) for the year ended on that date as considered in the standalonefinancial statements. The financial statements/information of this branch have beenaudited by the branch auditor whose report has been furnished to us and our opinion in sofar as it relates to the amounts and disclosures included in respect of this branch issolely on report of such branch auditor

Information other than the financial statements and Auditor's Report thereon

7. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe 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 in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the standalonefinancial statements

8. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the state of affairs (financial position) profit orloss (financial performance including other comprehensive income) changes in equity andcash flows of the Company in accordance with the accounting principles generally acceptedin India including the Ind AS specified under Section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

9. 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.

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

Auditor's Responsibilities for the Audit of the financial statements

11. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance withStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.

12. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act we are also responsible for explaining our opinion on whether the Companyhas adequate internal financial controls system in place and the operating effectivenessof 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 financial statements or if such disclosures are Inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa 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.

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

14. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

15. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when 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

16. As required by Section 197(16) of the Act we report that the Company has paidexcess remuneration of Rs 246.12 lakhs to its director during the year in accordance withthe provisions of and limits laid down under Section 197 read with Schedule V to the Act(refer note 41 to accompanying standalone financial statement).

17. As required by the Companies (Auditor's Report) Order 2016 (the ‘Order')issued by the Central Government of India in terms of Section 143(1i) of the Act and onthe basis of such checks of the books and records of the company as we considered andaccording to the information and explanation given to us we give in the Annexure A astatement on the matters specified in paragraphs 3 and 4 of the Order.

18. Further to our comments in Annexure A as required by Section 143(3) of the Act. wereport 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 standalone financial statements dealt with by this report are in agreement withthe books of account;

d) in our opinion the aforesaid standalone financial statements comply with Ind ASspecified under Section 133 of the Act;

e) on the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on 31 March2019 from being appointed as a director in terms of Section 164(2) of the Act;

f) With respect to the adequacy of the internal financial control over financialreporting of the company and the operating effectiveness of such control refer to ourseparate report in ‘Annexure B'.

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

i. the Company has disclosed the impact of pending litigations as at march 312019 onits financial position in the standalone financial statements;

ii. the Company has made provision as at march 312019 as required under theapplicable law or Ind AS for material foreseeable losses if any on long-term contractsincluding derivative contracts;

iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31 March2019;

iv. the disclosure requirements relating to holdings as well as dealings in specifiedbank notes were applicable for the period from 8 November 2016 to 30 December 2016 whichare not relevant to these standalone financial statements. Hence reporting under thisclause is not applicable.

For M H Dalal & Associates

Chartered Accountants

Firm Registration Number: - 112449W

Devang Dalal Partner

Membership Number:- 109049

Place: Mumbai

Date: May 28 2019

ANNEXURE A TO INDEPENDENT AUDITOR'S REPORT

The Annexure referred to in Independent Auditor Report to the members of the company onthe standalone financial statement for the year ended 31 March 2019.

Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the Company and taking into considerationthe information and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:

(i) (a) The Company is in the process of updating records showing full particularsincluding quantitative details and situation of property plant and equipment.

(b) According to the information and explanation provided to us all property plantand equipment have been physically verified by the management during the year and we arefurther informed that no material discrepancies were noticed on such verification. In ouropinion the frequency of physical verification of property plant and equipment isreasonable having regards to the size of the company and nature of its fixed assets.

(c) According to the information and explanation given to us and on basis of ourexamination of the records of the Company the title deeds of all the immovable propertiesas disclosed in property plant and equipment are held in the name of the Company.

(ii) In our opinion the management has conducted physical verification of inventory atreasonable intervals during the year. The discrepancies noticed on physical verificationof inventory as compared to book records were not material and have been appropriatelydealt with the books of accounts.

(iii) The Company has granted unsecured loans to two bodies corporate in the registermaintained under Section 189 of the Act; and closing yearend balance is ' 1938.53 lakhs.

(a) in our opinion the terms and conditions of grant of such loans are not primafacie prejudicial to the Company's interest;

(b) the schedule of repayment of principal and payment of interest has been stipulatedrepayment of principal is regular but the receipts of interest is not regular.

(c) Further interest amount of ' 996.10 lakhs has been overdue for more than 90 days.

(iv) In our opinion and according to the information and explanations given to usduring the year the company has given loan company in which directors are interested whichis in violation of the provision of section 185 of the Companies Act 2013. The amount ofloan granted during the year is ' 1080.38 Lakhs and year- end balance outstanding is '1080.38 Lakhs.

(v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Rules framed there under.

(vi) Pursuant to the rules made by the central government of India the company isrequired to maintain cost records as specified under section 148(1) of the act in respectof its products.

We have broadly reviewed the same and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. We have not however madea detailed examination of the records with a view to determine whether they are accurateor complete.

(vii) (a) The Company is regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income-tax sales-tax goods and services taxservice tax duty of customs duty of excise value added tax cess and other materialstatutory dues as applicable with the appropriate authorities. Further no undisputedamounts payable in respect thereof were outstanding at the year-end for a period of morethan six months from the date they became payable.

(b) According to the information and explanation given to us and the records of thecompany examined by us. There are no dues outstanding of sales tax including value addedtax employees state insurance provident fund income tax duty of customs otherstatutory dues on account of any dispute other than following:

Name of the Statue Nature of Dues Period to which the dispute relates Forum where the dispute is pending Amount* (in ')
Central Excise Act 1944 Excise Duty 2006-15 Dy. Comm. GST Gandhidham Comm. GST Gandhidham 74703266
2009-10 CESTAT Ahmedabad 2745400
Excise Duty and Penalty 2002 Comm. GST Indore 200000
Central Excise Act 1944 Total 77648666
Income Tax Act 1961 Income Tax and Interest A.Y. 2009-16 CIT Appeals 201437032
Income Tax Act 1961 Total 201437032
M. P. Entry Tax Entry Tax 2003-10 Tribunal Bhopal 22113839
2005-08 High court Indore 9824815
M. P. Entry Tax Total 31938654
M. P. VAT Sales Tax 2002-06 Supreme court Delhi 1858248
2003-04 High court Indore 2880359
M. P. VAT Total 4738607
Service Tax Service Tax 2009-17 Dy. Comm. GST Indore & Gandhidham Joint Comm. GST Indore Comm GST Gandhidham JC GST Gandhidham Supdt. GST Gandhidham 53001384
2011-16 CESTAT Ahmedabad 42939345
Service Tax and Penalty 2006-07 Comm. LTU Mumbai 42589321
Service Tax Total 138530050
Grand Total 454293009

*amount stated are net of amount paid under protest

(viii) The Company has not defaulted in repayment of loans or borrowings to anyfinancial institution or a bank as at the balance sheet date.

(ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments). In our opinion the term loans were applied for thepurposes for which the loans were obtained.

(x) No fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the period covered by our audit.

(xi) Except for managerial remuneration aggregating to ' 246.12 lakhs the managerialremuneration paid/provided for its chairman by the Company is in accordance with therequisite approvals as mandated by the provisions of section 197 read with schedule V tothe Act. The excess remuneration paid is subject to ratification in general meeting.

(xii) In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the Order are not applicable.

(xiii) According to the information and explanation given to us and based on ourexamination of the records of the Company the transaction with the related parties are incompliance with section 177 and 188 of the Act where applicable and details of suchtransaction have been disclosed in the standalone financial statement as required underInd AS 24 Related Party Disclosures specified under section 133 of the Act read withRule 7 of the Companies (Account) Rules 20l5.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures. Accordingly provisions ofclause 3(xiv) of the Order are not applicable.

(xv) In our opinion the Company has not entered into any non- cash transactions withthe directors or persons connected with them covered under Section 192 of the Act.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For M H Dalal & Associates

Chartered Accountants

Firm Registration Number: - 112449W

Devang Dalal

Partner

Membership Number:- 109049

Place: Mumbai

Date: May 28 2019

ANNEXURE B TO INDEPENDENT AUDITOR'S REPORT

Independent Auditor's report on the Internal Financial Controls under Clause (i) ofsub-section 3 of section 143 of the Companies Act 2013 (the “Act”)

1. We have audited the internal financial controls over financial reporting (IFCoFR) ofMan Industries (India) Limited (” the Company”) as of 31 March 2019 inconjunction with our audit of the Standalone Financial Statements of the Company as ofthat date.

Management's Responsibility for Internal Financial Controls

2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the “Guidance Note”) issued by the Institute of Chartered Accountantsof 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 the Company's business including adherence to Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's IFCoFR based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theICAI and deemed to be prescribed under Section 143(10) of the Act to the extentapplicable to an audit of IFCoFR and the Guidance Note issued by the ICAI. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate IFCoFR wereestablished and maintained and if such controls operated effectively in all materialrespects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the IFCoFR and their operating effectiveness. Our audit of IFCoFR included obtaining anunderstanding of IFCoFR assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's IFCoFR.

Meaning of Internal Financial Controls over financial Reporting

6. A Company's IFCoFR is a process designed to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A Company'sIFCoFR 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

7. Because of the inherent limitations of IFCoFR including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of the IFCoFRto future periods are subject to the risk that IFCoFR may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.

Opinion

8. I n our opinion the Company has in all material respects adequate internalfinancial controls over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31 March 2019 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note issued by the ICAI.

For M H Dalal & Associates

Chartered Accountants

Firm Registration Number: - 112449W

Devang Dalal Partner

Membership Number:- 109049

Place: Mumbai Date: May 28 2019