The Members of
Man Industries (India) Limited
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of Man Industries(India) Limited (Rs. the Company') which comprise the Balance Sheet as at March 312017the Statement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
2. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 (Rs. the Act') with respect to the preparation of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance (including other comprehensive income) cash flows and changes inequity of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards specified in the Companies (IndianAccounting Standards) Rules 2015 (as amended) under Section 133 of the Act. Thisresponsibility also includes the maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
3. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
4. We have taken into account the provisions of the Act and the Rules made thereunderincluding the accounting and auditing standards and matters which are required to beincluded in the audit report under the provisions of the Act and the Rules madethereunder.
5. We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act and other applicableauthoritative pronouncements issued by the Institute of Chartered Accountants of India.Those Standards and pronouncements require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the standalonefinancial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the standalone financial statements. The procedures selected dependon the auditors' judgment including the assessment of the risks of material misstatementof the standalone financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal financial control relevant to theCompany's preparation of the standalone 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 the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone financial statements.
7. 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.
8. 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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2017 and it's profit (including other comprehensive income) its cashflows and the changes in equity for the year ended on that date.
Emphasis of Matter
9. We draw attention to note 39 to the standalone financial statements relating toremuneration paid in respect of the Chairman and Executive Director of the Company for thefinancial year 2016-17 in excess of the limits prescribed under section 197 of the Actdue to inadequacy of profits which is subject to the approval of Central Government. Ouropinion is not qualified in respect of this matter.
10. We draw attention to note 52 to the standalone financial statement with regards tothe scheme of arrangement for the merger/ demerger (scheme) between the Company and ManInfraprojects Limited (MIPL). The Company has given effect to the scheme in the financialstatement of year 2014-15 based on approval of Hon'ble Bombay High Court. As representedto us by the management MIPL has made frivolous claims on the Company and also challengedthe valuation of assets against which the Company has filed an application for withdrawalof claims and for modification of scheme. Since the matter is sub-judice and looking tothe contingencies in this regards we are unable to comment on the same.
11. The financial information of the Company for the year ended March 312016 and thetransition date opening balance sheet as at April 1 2015 included in these standalonefinancial statements are based on the previously issued statutory financial statementsfor the years ended March 31 2016 and March 31 2015 prepared in accordance with theCompanies (Accounting Standards) Rules 2006 (as amended) which were audited by us onwhich we expressed an unmodified opinion dated May 27 2016 and April 29 2015respectively. The adjustments to those financial statements for the differences inaccounting principles adopted by the Company on transition to the have been audited by us.
12. We did not audit the financial statements/ information of Dubai Branch included inthe standalone financial statements of the Company whose financial statements/ financialinformation reflect total assets of Rs. 3413.02 lakhs as at March 312017 and the totalrevenues of Rs. 36088.04 lakhs for the year ended on that date as considered in thestandalone financial statements. The financial statements/ information of this branch havebeen audited by the branch auditor whose reports have been furnished to us and ouropinion in so far as it relates to the amounts and disclosures included in respect of thisbranch is solely on report of such branch auditor.
Report on Other Legal and Regulatory Requirements
13. As required by the Companies (Auditors' Report) Order 2016 issued by the CentralGovernment of India in terms of sub-section (11) of section 143 of the Act ("theOrder") and on the basis of such checks of the books and records of the Company aswe considered appropriate and according to the information and explanations given to uswe give in the Annexure B a statement on the matters specified in the paragraph 3 and 4of the Order.
14. 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.
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 (including other comprehensiveincome) the Cash Flow statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.
d. In our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act.
e. On the basis of the written representations received from the directors as on March312017 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312017 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 A'.
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 information and theexplanations given to us:
i. The Company has disclosed the impact if any of pending litigations as at March 312017 on its financial position in its standalone financial statements.
ii. The Company has made provision as at March 312017 as required under theapplicable law or accounting standards for material foreseeable losses if any onlong-term contracts including 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 March312017.
iv. The Company has provided requisite disclosures in its standalone financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom November 8 2016 to December 30 2016 on the basis of information available with theCompany. Based on audit procedures and relying on management's representation we reportthat disclosures are in accordance with the books of account maintained by the Company andas produced to us by the Management. Refer to Note 50.
For Rohira Mehta & Associates
Firm Registration Number: 118777W
Date: May 30th 2017
Annexure A to 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 ManIndustries (India) Limited("the Company") as of 31 March 2017 in conjunctionwith our audit of the Standalone Financial Statements of the Company for the year ended onthat 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 (Rs. 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 judgment including the assessment of the risks ofmaterial misstatement of the Standalone Financial Statements whether due to fraud orerror.
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 Standalone 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
1 pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
2 provide reasonable assurance that transactions are recorded as necessary to permitpreparation of Standalone Financial Statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directors of the company; and
3 provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition use or disposition of the company's assets that could have a material effecton the Standalone 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 31 March 2017 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.
For Rohira Mehta & Associates
Firm Registration Number: 118777W
Date: May 30th 2017
Annexure B to Independent Auditor's Report
The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone financial statements for the year ended 31 March 2017 we 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 the propertyplant and equipment have been physically verified by the management during the year and weare further informed that no material discrepancy has been noticed by the management onsuch verification. In our opinion the frequency of physical verification of propertyplant and equipment is reasonable having regard to the size of the company and nature ofits fixed assets.
(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 the immovable properties asdisclosed in property plant and equipment are held in the name of the Company.
(ii) The physical verification of inventory has been conducted at reasonable intervalsby the Management during the year. The discrepancies noticed on physical verification ofinventory as compared to book records were not material and have been appropriately dealtwith in the books of accounts.
(iii) The Company has granted unsecured loans to two bodies corporate covered in theregister maintained under Section 189 of the Act.
a. In respect of the aforesaid loans the terms and conditions under which such loanswere granted are not prejudicial to the Company's interest.
b. In respect of the aforesaid loans the schedule of repayment of principal andpayment of interest has been stipulated repayment of principal is regular but thereceipts of interest is not regular.
c. Further in respect of loan given to Man Overseas Metal DMCC interest of' 2.85lacs has been overdue for more than 90 days.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act with respectto the loans and investments made and guarantees and security provided by it.
(v) The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.
(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)According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingwith appropriate authorities undisputed statutory dues in respect of sales tax includingvalue added tax employees state insurance provident fund income tax duty of exciseduty of customs and other statutory dues.
(b) According to the information and explanations 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 excise duty ofcustoms and other statutory dues on account of any dispute other than the following:
|Name of the statute ||Nature of Dues ||Period to which the amount relates ||Forum where dispute is pending ||Amount* (In ') |
|Central Excise Act 1944 ||Excise Duty ||2005-12 ||Dy. Comm. LTU Mumbai ;Comm. LTU Mumbai; Addl Comm LTU ||66009905 |
| || ||2004-06 ||CESTAT Mumbai ||64395132 |
| ||Excise Duty and Penalty ||2002-03 ||Commissioner (CEX. Indore) ||200000 |
|Central Excise Act 1944 Total || || || ||130605037 |
|Central Sales Tax ||Sales Tax ||2008-10 ||Tribunal Bhopal ||9450321 |
|Central Sales Tax Total || || || ||9450321 |
|Income Tax Act 1961 ||Penalty ||2003-04 ||High Court Mumbai. ||8968750 |
|Income Tax Act 1961 Total || || || ||8968750 |
|M. P. Entry Tax ||Entry Tax ||2003-10 ||Tribunal Bhopal ||22113839 |
| || ||2005-08 ||Highcourt Indore ||9824815 |
|M. P. Entry Tax Total || || || ||31938654 |
|M. P. VAT ||Sales Tax ||2003-12 ||Tribunal Bhopal ||6747119 |
| || ||2005-06 ||Supreme court Delhi ||677450 |
|M. P. VAT Total || || || ||7424569 |
|Service Tax ||Service Tax ||2006-16 ||Add. Comm. AUDIT LTU; Addl Comm LTU Mumbai; Asst . Comm. LTU Mumbai; Comm. LTU Mumbai; Dy. Comm. LTU Mumbai; Joint Comm. LTU Mumbai ||55422590 |
| || ||2011-16 ||ADG - DGCEI Ahmedabad ||41686804 |
| || ||2005-2007 ||High Court ||3027168 |
| ||Service Tax and Penalty ||2006-07 ||Comm. LTU Mumbai ||42589321 |
|Service Tax Total || || || ||142725883 |
|Grand Total || || || ||331113214 |
*amount stated are net of amount paid under protest
(viii) According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any financial institution or bank as at the balance sheet date.
(ix) In our opinion and according to the information and explanations given to usterm loans have been applied for the purposes for which they were obtained.
(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) Except for managerial remuneration aggregating to Rs. 387.99 lakhsthe managerial remuneration paid/ provided for its Chairman and Managing Director by theCompany is in accordance with the requisite approvals as mandated by the provisions ofSection 197 read with Schedule V to the Act. The excess remuneration paid is subject tothe approval of Central Government.
(xii) In our opinion and opinion and according to the information and explanationsgiven to us the Company is not a Nidhi company. Accordingly paragraph 3(xii) of theOrder is not applicable
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company the transactions with the related parties arein compliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone financial statements as required underInd AS 24 Related Party Disclosures specified under Section 133 of the Act read withRule 7 of the Companies (Accounts) Rules2015.
(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.Accordingly the provisions of Clause 3(xiv) of the Order are not applicable to theCompany.
(xv) The Company has not entered into any non cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.
(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 3(xvi) of the Order are notapplicable to the Company.
For Rohira Mehta & Associates
Firm Registration Number: 118777W
Date: May 30th 2017