To the Members of MANGALAM TIMBER PRODUCTS LIMITED
Report on the Ind AS Financial Statements
We have audited the accompanying Ind AS financial Statement of Mangalam TimberProducts Limited ("the Company") which comprise the Balance Sheet as at31st March 2018 and the Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.
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 ofthese Ind AS financial statements that give a true and fair view of the state ofaffairs(financial position) profit or loss (financial performance including othercomprehensive income) cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) prescribed under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing 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 Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.
We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind AS financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditors' judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including the Ind AS of the state ofaffairs (financial position) of the Company as at 31stMarch 2018 and its profit(financial performance including other comprehensive income) its cash flows and thechanges in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
As required by Companies (Auditors Report) Order 2016("the order") issued bythe Central Government of India in terms of Sub Section (11) of Section 143 of the Act onthe matters specified in paragraph 3 and 4 of the said order we further report that-
i) a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of Fixed Assets.
b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets.
c) The title deeds of immovable properties as disclosed in Note 2.10 on Fixed Assetsto the financial statements are held in the name of the company except for
|Total number of cases ||Whether leasehold/ freehold ||Gross Block (Rs. in lacs) ||Net Block (Rs.in lacs) ||Remarks |
|1 ||Freehold ||1.94 ||1.94 ||- |
ii) The management has conducted physical verification of inventory during the year atreasonable intervals. The discrepancies between the physical stock and book records whichwere material in respect of certain items of inventories have been properly dealt in thebooks of account.
iii) a) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnership or other parties covered in the register maintained undersection 189 of Companies Act 2013.
b) Clause (iii)(a) (b) (c) of the aforesaid order are not applicable.
iv) In our opinion and according to information and explanations given to us thecompany has not granted any loan or provided any guarantee or security to the partiescovered under section 185 of the Act. In our opinion and according to information andexplanations given to us the Company has complied with provisions of section 186 of theAct in respect of investment made and guarantee or security provided.
v) The Company has not accepted any deposits from the public within the provisions ofsection 73 to 76 or any other relevant provisions of the Act and rules framed there under.
vi) The Central Government of India has not specified the maintenance of cost recordsunder sub-section (1) of Section 148 of the Act for the products of the Company.
vii) a) According to the records of the company examined by us and according to theinformation and explanations given to us in our opinion the company has not been regularin depositing undisputed statutory dues including Provident Fund employees stateinsurance income tax sales tax service tax duty of customs duty of excise valueadded tax and any other material statutory dues as may be applicable with theappropriate authorities. The extent of arrears of statutory dues outstanding as at the31st March 2018 for a period of more than six months from the date they become payable isas follows:
|Name of the statute ||Nature of dues ||Amount (Rs. In Lacs) ||Period to which the amount relates ||Due date ||Date of Payment |
|Finance Act 1994 ||Service Tax ||7.61 ||June'16 - September'16 ||5th day of subsequent month ||Not yet paid |
b) According to the records of the company examined by us and according to informationand explanations given to us there are no dues in respect of income tax sales taxservice tax duty of customs duty of excise value added tax which have not beendeposited on account of any dispute except as detailed hereunder:
|Name of the Statute ||Nature of the Dues ||Year ||Amount (Rs.in Lacs) ||Forum where dispute is pending |
|Central Excise Act 1944 ||Central Excise ||1993-94 ||3.49 ||Assistant Commissioner Central Excise Customs & Service Tax |
| ||Central Excise ||1988-92 ||126.57 ||Customs Excise & Service Tax Appellate Tribunal |
| ||Central Excise ||2006-07 ||5.76 ||Customs Excise & Service Tax Appellate Tribunal |
|Finance Act 1994 ||Service Tax ||2009-10 ||52.21 ||Customs Excise & Service Tax Appellate Tribunal |
|Bihar & Orissa Excise Act 1915 ||State Excise ||2002-03 ||21.39 ||Odisha High Court |
| ||State Excise ||2003-04 ||135.75 ||Odisha High Court |
| ||State Excise ||2004-05 ||170.90 ||Odisha High Court |
| ||State Excise ||2005-06 ||251.58 ||Odisha High Court |
| ||State Excise ||2006-07 ||267.53 ||Odisha High Court |
| ||State Excise ||2007-08 ||120.37 ||District Magistrate & Collector Nabarangpur |
| ||State Excise ||2008-09 ||103.20 ||District Magistrate & Collector Nabarangpur |
| ||State Excise ||2009-10 ||96.60 ||District Magistrate & Collector Nabarangpur |
| ||State Excise ||2010-11 ||57.60 ||District Magistrate & Collector Nabarangpur |
|Central Sales Tax Act 1956 ||Sales Tax ||1994-95 ||0.72 ||Deputy Commissioner Commercial Taxes |
| ||Sales Tax ||2000-01 ||93.56 ||Sales Tax Tribunal Odisha |
| ||Sales Tax ||2001-02 ||110.00 ||Sales Tax Tribunal Odisha |
| ||Sales Tax ||2002-03 ||70.12 ||Sales Tax Tribunal Odisha |
| ||Sales Tax ||2003-04 ||135.66 ||Sales Tax Tribunal Odisha |
| ||Sales Tax ||2004-05 ||30.22 ||Sales Tax Tribunal Odisha |
|Odisha Entry Tax Act 1999 ||Entry Tax ||2000-01 ||8.11 ||Sales Tax Tribunal. Odisha |
| ||EntrvTax ||2002-03 ||28.35 ||Sales Tax Tribunal Odisha |
|Odisha Sales Tax Act 1947 ||Sales Tax ||2002-03 ||1.85 ||Sales Tax Tribunal Odisha |
|Odisha VAT Act 2004 ||VAT ||2005-06 ||17.20 ||Sales Tax Tribunal Odisha |
| ||VAT ||2007-09 ||14.96 ||Sales Tax Tribunal Odisha |
viii) According to the information and explanations given to us the company has notdefaulted in repayment of any loans or borrowings to financial institutions banks.Government or dues to debenture holders as at the Balance Sheet date.
ix) The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) and term loans. Accordingly the provisions ofClause 3(ix) of the Order are not applicable to the Company.
x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.
xi) The Company has paid/provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theAct.
xii) As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has entered into transactions withrelated parties in compliance with the provisions of Sections 177 and 188 of the Act. Thedetails of such related party transactions have been disclosed in the financial statementsas required under Accounting Standard (AS) 18 Related Party Disclosures specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.
xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review. Accordingly the provisions of Clause 3(xiv) of the Order are notapplicable to the Company.
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.
Report on Other Legal and Regulatory Requirements
As required by Section 143 (3) of the Act we report that:
1. 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.
2. 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.
3. The Balance Sheet the Statement of Profit and Loss the Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account
4. In our opinion the aforesaid Ind AS financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
5. On the basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 from being appointed as a director in terms of Section164 (2) of the Act.
6. 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"; and
7. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
a) The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements.
b) The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.
c) There is no amount required to be deposited/transferred to the Investor Educationand Protection Fund by the Company during the year ended 31st March 2018.
For Manish Goyal & Associates
Firm Registration Number: 007152C
Membership Number: 076096
Date : 18th May 2018