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MBL Infrastructures Ltd.

BSE: 533152 Sector: Infrastructure
NSE: MBLINFRA ISIN Code: INE912H01013
BSE 00:00 | 16 Oct 14.85 0.10
(0.68%)
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14.15

HIGH

15.15

LOW

14.15

NSE 00:00 | 16 Oct 14.90 0.10
(0.68%)
OPEN

16.10

HIGH

16.10

LOW

14.40

OPEN 14.15
PREVIOUS CLOSE 14.75
VOLUME 21979
52-Week high 31.00
52-Week low 12.70
P/E
Mkt Cap.(Rs cr) 156
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 14.15
CLOSE 14.75
VOLUME 21979
52-Week high 31.00
52-Week low 12.70
P/E
Mkt Cap.(Rs cr) 156
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

MBL Infrastructures Ltd. (MBLINFRA) - Auditors Report

Company auditors report

To The Members of

MBL INFRASTRUCTURES LTD

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

We have audited the accompanying Standalone Financial Statements of MBL INFRASTRUCTURESLTD ('the Company') which comprise the Balance Sheet as at March 31 2018 and theStatement of Profit and Loss including Other Comprehensive Income the Statement ofChanges in Equity and the Statement of Cash Flows for the year then ended and a summaryof the significant accounting policies and other explanatory information (hereinafterreferred to as "Standalone Financial Statements").

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE 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 Standalone Financial Statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the Indian Accounting Standards (IndAS) prescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia.

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 StandaloneFinancial Statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express an opinion on these Standalone Financial Statementsbased on our audit. In conducting our audit we have taken into account the provisions ofthe Act 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 made thereunderand the Order issued under section 143(11) of the Act.

We conducted our audit of the Standalone 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 Standalone Financial Statements are free frommaterial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Standalone Financial Statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe Standalone 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 Standalone Financial Statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes 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.

We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone Financial Statements.

OPINION

In our opinion and to the best of our information and according to the explanationsprovided to us the aforesaid Standalone Financial Statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2018 and its profit other comprehensive income the changes inequity and its cash flows for the year ended on that date.

EMPHASIS OF MATTERS

We draw attention to the following matters in the notes to the accompanying StandaloneInd AS Audited Financial Statement for the year ended March 31 2018:

a. The Company was under Corporate Insolvency Resolution Process under the Insolvencyand Bankruptcy Code 2016. Hon'ble Kolkata bench of National Company Law Tribunal (NCLT)approved the resolution plan vide order dated April 18 2018. The powers of the board ofdirectors were suspended during the financial year 2017-18 and were reinstated back onApril 19 2018.

b. In forming our opinion on the Financial Statements the Financial Statements areprepared on going concern basis considering the NCLT order dated April 18 2018 approvingresolution plan.

c. In terms of Ind AS 10 "Events after the Reporting Period" the impact ofthe Resolution Plan being "Adjusting event" has been given effect in preparationof Financial Statements as on March 31 2018. The impact arising due to applicability ofresolution plan of Rs. 40213 Lakhs which has been shown as exceptional items in statementof profit & loss and the same has been treated as capital reserve on the basis oflegal opinion obtained by the Company refer Note 39.

d. Company has reclassified an amount of Rs. 1500 lakhs from loans and advances toinvestments. As a result of reclassification the resultant net impact on the Statement ofProfit & Loss for the period ended March 31 2018 is Rs. 108 lakhs refer Note 54.

OTHER MATTERS

The comparative financial information for the year ended March 31 2017 prepared inaccordance with Ind AS included in these Standalone Financial Statements have been auditedby the predecessor auditor on which they had expressed an unmodified opinion vide reportdated May 29 2017. Our opinion is not modified in respect of this matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by Section 143(3) of the Act based on our audit 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 Statement of Changes in Equity and the Statement of Cash Flow 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 prescribed under section 133 of the Act.

e. on the basis of the written representations received from the directors of theCompany as on March 312018 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2018 from being appointed as a director in termsof Section 164(2) of the Act.

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". 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 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 providedto us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Financial Statements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.

iii. There is no outstanding amount required to be transferred to the InvestorEducation and Protection Fund by the Company during the year.

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For SARC & Associates
Chartered Accountants
ICAI Firm Registration No.006085N
Dinesh Verma
Place: New Delhi Partner
Dated: 30th June 2018 Membership No.: 089583

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report to the Members of MBL INFRASTRUCTURES LTD of evendate)

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 MBLINFRASTRUCTURES LTD ('the Company') as of March 31 2018 in conjunction with our audit ofthe Standalone Financial Statements of the Company for the year ended on that date.

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Board of Directors/Resolution Professional of the Company is responsible forestablishing and maintaining internal financial controls based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of internal financialcontrols over financial reporting issued by the Institute of Chartered Accountants ofIndia. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of internal financial controls over financialreporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 Financial Statements whether due to fraud or error.

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 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 resolution professional and directors of the Company; and (3) providereasonable assurance regarding prevention or timely detection of unauthorized acquisitionuse or disposition of the Company's assets that could have a material effect on theFinancial Statements.

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 be come inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

OPINION

In our opinion to the best of our information and according to the explanationsprovided to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31 2018 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of internalfinancial controls over financial reporting issued by the Institute of CharteredAccountants of India.

For SARC & Associates
Chartered Accountants
ICAI Firm Registration No.006085N
Dinesh Verma
Place: New Delhi Partner
Dated: 30th June 2018 Membership No.: 089583

ANNEXURE 'B' TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements 'section of our report to the Members of MBL INFRASTRUCTURES LTD of evendate)

1. In respect of the Company's fixed assets:

a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b. The Company has a program of verification to cover all the items of fixed assets ina phased manner which in our opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the program certain fixed assets werephysically verified by the management during the year. According to the information andexplanations provided to us no material discrepancies were noticed on such verification.

c. According to the information and explanations provided to us the records examinedby us and based on the examination of the conveyance deeds provided to us we report thatthe title deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name of the Company as at the balance sheet date.

2. According to the information and explanations provided to us the inventory has beenphysically verified at reasonable intervals during the year by the management. In ouropinion and according to the information and explanations provided to us the interval ofsuch physical verification is reasonable having regard to size of the Company and natureof its business and according to the information and explanations provided to us nomaterial discrepancies were noticed on such verification.

3. The Company has granted loans to parties covered in the register maintained undersection 189 of the Companies Act 2013.

a. In our opinion and according to the information and explanations provided to us theterms & conditions of the grant of such loan is not prima facie prejudicial to theCompany's interest;

b. The schedule of repayment of the principal and the payment of the interest has notbeen stipulated and hence we are unable to comment as to whether repayment/receipts of theprincipal amount and interest are regular;

c. In the absence of the stipulated schedule of repayment of principal and payment ofinterest we are unable to comment as to whether there is any amount which is overdue formore than 90 days and whether reasonable steps have been taken by the Company for recoveryof the principal amount and interest.

4. In our opinion and according to the information and explanations provided to usprovisions of section 185 and 186 of the Companies Act 2013 and in respect of loans todirectors including entities in which they are interested and in respect of loans andadvances given investments made and guarantees and securities given have been compliedwith by the Company.

5. The Company has not accepted any deposits within the meaning of section 73 to 76 ofthe Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended). Accordinglythe provisions of Clause 3(v) of the Order are not applicable to the Company.

6. We have broadly reviewed the books of account maintained by the Company pursuant tothe Rules made by the Central Government for the maintenance of cost records under subsection (1) of Section 148 of the Companies Act in respect of Company products/servicesand are of the opinion that prima facie the prescribed accounts and records have beenmade and maintained. However we have not made a detailed examination of the cost recordswith a view to determine whether they are accurate or complete. The cost records of theCompany have been audited by M/s Dipak Lal & Associates Cost Accountants. TheManagement has furnished to us the cost audit report for the financial year 2016-17; thecost auditor has expressed an unmodified opinion in the report. The audit of cost recordsfor the financial year 2017-18 is under progress. We have relied on the opinion expressedby the cost auditor in his report.

7. According to the information and explanations provided to us and in respect ofstatutory dues:

a. Undisputed statutory dues including provident fund employee state insurance incometax sales tax duty of custom duty of excise value added tax goods and service tax(GST) cess and other material statutory dues as applicable have not been regularlydeposited with the appropriate authorities and there have been significant delays in alarge number of cases. Undisputed amounts payable in respect thereof which wereoutstanding at the year-end for a period of more than six months from the date they becamepayable are as follows:

Statement of arrears of statutory dues outstanding for more than six months:-

S.No. Particulars Amount
1 Provident Fund 234.87
2 Employee State Insurance 30.72
3 Goods and Service Tax 23.88
4 Service Tax 204.18
5 Tax Deducted at Sources 428.80
6 Dividend Distribution tax 253.17

b. Details of dues of income tax sales tax wealth tax service tax duty of customsduty of excise value added tax cess which have not been deposited as on March 31 2018on account of disputes are given below:

Name of the statute Nature of Dues Amount Period Forum where dispute is pending
Income Tax Act Income Tax 1.83 A.Y. 2004-05 High Court
Income Tax Act Income Tax 373.68 A.Y. 2005-06 High Court
Income Tax Act Income Tax 15.63 A.Y. 2005-06 DCIT- Central 2(2)
Income Tax Act Income Tax 252.65 A.Y. 2011-12 DCIT- Central 2(2)
Income Tax Act Income Tax 1369.39 A.Y. 2012-13 CIT (Appeals) - Central I/ Kolkata
Income Tax Act Income Tax 459.27 A.Y. 2013-14 CIT (Appeals) - Central I/ Kolkata
Income Tax Act Income Tax 1596.23 A.Y. 2014-15 CIT (Appeals) - Central I/ Kolkata
WB VAT ACT 2003 Sales Tax 40.65 A.Y. 2007-08 Commercial Tax Officer
WB VAT ACT 2003 Sales Tax 275.28 A.Y. 2008-09 Commercial Tax Officer
WB VAT ACT 2003 Sales Tax 684.05 A.Y. 2009-10 WB Taxation Tribunal
WB VAT ACT 2003 Sales Tax 251.26 A.Y. 2010-11 WB Commercial Taxes Appellate & Revision Board
BVAT ACT 2005 Sales Tax 94.74 A.Y. 2010-11 Commercial Tax Tribunal
BVAT ACT 2005 Sales Tax 54.81 A.Y. 2010-11 Commercial Tax Tribunal
KVAT ACT Sales Tax 30.38 A.Y. 2011-12 SR. Joint Commissioner
BVAT ACT 2005 Sales Tax .41 A.Y. 2011-12 Commercial Tax Joint Commissioner
BVAT ACT 2005 Sales Tax .55 A.Y. 2011-12 Commercial Tax Joint Commissioner
BVAT ACT 2005 Sales Tax 451.96 A.Y. 2011-12 Commercial Tax Tribunal
BVAT ACT 2005 Sales Tax 55.25 A.Y. 2011-12 Commercial Tax Tribunal
UP VAT ACT 2008 Sales Tax 5.99 A.Y. 2011-12 Add. Commissioner- Commercial tax
BVAT ACT 2005 Sales Tax .55 A.Y. 2012-13 Commercial Tax Joint Commissioner
BVAT ACT 2005 Sales Tax .50 A.Y. 2012-13 Commercial Tax Joint Commissioner

 

Name of the statute Nature of Dues Amount Period Forum where dispute is pending
BVAT ACT 2005 Sales Tax 482.23 A.Y. 2012-13 Commercial Tax Tribunal
BVAT ACT 2005 Sales Tax 92.22 A.Y. 2012-13 Commercial Tax Tribunal
BVAT ACT 2005 Sales Tax .55 A.Y. 2013-14 Commercial Tax Joint Commissioner
UP VAT ACT 2008 Sales Tax .64 A.Y. 2013-14 Commercial Tax Deputy Commissioner
RVAT ACT 2003 Sales Tax 2.17 A.Y. 2013-14 Commercial Tax Officer
UP VAT ACT 2008 Sales Tax 37.04 A.Y. 2014-15 Commercial Tax Deputy Commissioner
RVAT ACT 2003 Sales Tax 70.04 A.Y. 2014-15 Commercial Tax Officer
JVAT ACT Sales Tax 351.25 A.Y. 2015-16 Commercial Tax Assistant Commissioner
BVAT ACT 2005 Sales Tax 147 A.Y. 2015-16 Commercial Tax Assistant Commissioner
DVAT ACT 2005 Sales Tax .50 A.Y. 2015-16 Joint Commissioner
DVAT ACT 2005 Sales Tax .50 A.Y. 2015-16 Joint Commissioner
UTTRANCHAL VAT ACT 2005 Sales Tax .51 A.Y. 2015-16 Joint Commissioner
UTTRANCHAL VAT ACT 2005 Sales Tax .61 A.Y. 2015-16 Joint Commissioner
FINANCE ACT 1994 Service Tax 103.17 CESTAT

8. The Company was under Corporate Insolvency Resolution Process under Insolvency andBankruptcy code 2016 during the financial year 2017-18. The Resolution Plan of theCompany was approved by Hon'ble National Company Law Tribunal (NCLT) Kolkata Bench videits Order dated 18th April 2018. As per information and explanations provided to us bythe management and as per the resolution plan approved the debts due to assentingfinancial creditors amounting to Rs. 111645 lakhs have been restructured and arerepayable as per plan. The debts amounting to Rs. 31622 lakhs payable to dissentingfinancial creditors have been adjusted to the liquidation value.

9. In our opinion and according to the information and explanations provided by themanagement the Company has utilized the monies raised by the way of term loans for thepurposes for which they were raised.

10. Based upon the audit procedures performed for the purpose of reporting the true andfair view of the Financial Statements and according to the information and explanationsprovided by the management we report that no fraud by the Company or no fraud on theCompany by the officers and employees of the Company has been noticed or reported duringthe year.

11. According to the information and explanations provided by the management Nomanagerial remuneration has been paid by the Company during the year. Accordingly theprovision of Clause 3(xi) of the Order is not applicable to the Company.

12. In our opinion the Company is not a Nidhi Company. Therefore the provisions ofClause 3(xii) of the Order are not applicable to the Company and hence not commented upon.

13. According to the information and explanations provided to the managementtransactions with the related parties are in compliance with section 177 and 188 of theCompanies Act 2013 where applicable and the details have been disclosed in the FinancialStatements as required by the applicable accounting standards.

14. According to the information and explanations provided to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly paid convertible debentures during the yearunder review and hence reporting requirements under Clause 3(xiv) of the Order are notapplicable to the Company and not commented upon. However pursuant to the approvedresolution plan by NCLT Company has received a sum of Rs. 280 Lakhs as share applicationmoney from the promoters and promoter groups during the financial year 201718.

15. According to the information and explanations provided by the management theCompany has not entered into any non-cash transactions with directors or persons connectedwith him as referred to in section 192 of the Companies Act 2013.

16. According to the information and explanations provided to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For SARC & Associates
Chartered Accountants
ICAI Firm Registration No.006085N
Dinesh Verma
Place: New Delhi Partner
Dated: 30th June 2018 Membership No.: 089583