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Mitcon Consultancy & Engineering Services Ltd.

BSE: 515508 Sector: Others
NSE: MITCON ISIN Code: INE828O01033
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Mitcon Consultancy & Engineering Services Ltd. (MITCON) - Auditors Report

Company auditors report

TO THE MEMBERS OF MITCON CONSULTANCY & ENGINEERING SERVICES LIMITED

Report on the Standalone Financial Statements :

We have audited the accompanying standalone financial statements of MITCON Consultancy& Engineering Services Ltd. ("the Company") which comprise the BalanceSheet as at 31st March 2018 the Statement of Profit and Loss the Cash Flow Statementfor the year then ended and a summary of the significant accounting policies and otherexplanatory information.

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 preparationand presentationofthesestandalonefinancialstatements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthefinancial 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.

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 thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act and other applicable authoritative pronouncements issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

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.

Opinion :

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 31st March 2018 and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to the following matters in the Notes No.43 and No.44 to thefinancial statements:

a) Note No.43 relating to issue of bank guarantee by the company on behalf of MitconMegaskill Centers Pvt. Ltd.(MMCPL) to Jharkhand Skill Development Mission Society (JSDMS)Government of Jharkhand against mobilization advance received by MMCPL from JSDMS. Theguarantee issued by the company on behalf of MMCPL is currently outstanding and the statusregarding company's financial exposure remains unchanged. In the event of any unforeseeninvocation of bank guarantee the company would face financial exposure which may extendmaximum to the amount of bank guarantee issued i.e. INR 127247200/-.

b) Note No.44- Regarding financial exposure of the company for pledge of investment inequity shares of Krishna Windfarms Developers Pvt. Ltd. (KWDPL) aggregating to face valueof INR 58800000/- issue of Corporate Guarantee on behalf of KWDPL of INR 420000000/-and inter-corporate loan to KWDPL of INR 225309605/- outstanding and interest thereon ofINR 12778561/- receivable from KWDPL as on 31.3.2018

Our opinion is not modified in respect of the matters (a) and (b) above.

Report on Other Legal and Regulatory Requirements :

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Sub-section (11) of Section 143 ofthe Act (hereinafter referred to as the `Order') and on the basis of such checks of thebooks and records of the company as we considered appropriate and according to theinformation and explanations given to us we give in the Annexure A a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.

2. 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 and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid standalone financialstatements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

e) The matters described under Emphasis of Matter paragraph above in our opinion mayhave an adverse effect on the functioning of the company

f) 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.

g) With respect to the adequacy of the internal financial controls over financialreporting with reference to standalone financial statements of the Company and theoperating effectiveness of such controls refer to our separate Report in Annexure B.

h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financialposition financial statements - Refer Note 26 to the financial statements;

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

iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

FOR JOSHI & SAHNEY
CHARTERED ACCOUNTANTS
Firm Registration No.: 104359W
Sd/-
H.M.JOSHI
Place: Pune PARTNER
Date: 29th May 2018 Membership No. 031689

ANNEXURE B TO INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 2(g) of the Independent Auditors' Report of even date to themembers of MITCON Consultancy & Engineering Services Ltd. on the standalone financialst March 2018.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of section143 of the Companies Act 2013 (`The Act').

1) We have audited the internal financial controls over financial financial statementsof MITCON Consultancy & Engineering Services Ltd. ("the Company") as ofMarch 31 2018 in conjunction with our audit of the standalone financial statements of theCompany for the year ended on that date.

Management's Responsibility for Internal Financial Controls

2) The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India(ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies 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 Act.

Auditors' Responsibility

3) Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to standalone financial statement basedon our audit. We conducted our audit in accordance with the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting (the "Guidance Note‘) andthe Standards on Auditing as specified under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls both applicable to an audit ofinternal financial controls and both issued by the lnstitute 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 with reference to standalonefinancial statement was established and maintained and if such controls operatedeffectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting with reference tostandalone financial statements and their operating effectiveness. Our audit of internalfinancial controls over financial reporting with reference to standalone financialstatements included obtaining an understanding of internal financial controls overfinancial reporting with reference to standalone financial statements assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone financial statements whether due to 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 internalfinancial controls systemover financial reporting with reference to standalone financial statements.

Meaning of Internal Financial Controls over Financial Reporting designed tocontroloverfinancial 6) provide reasonable Acompany'sinternal financial assuranceregarding financialreporting and the preparation of standalone financial the reliabilityof statements for external purposes in accordance with generally accepted accountingprinciples. A company's over financial reporting includes those policies and proceduresthat (1) pertain internalfinancial to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of standalone financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and (3)provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7) 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 with reference to standalone financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

8) In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting with reference to standalone financialstatements and such internal financial controls over financial reporting with reference tostandalone financial statements were operating effectively as at financial reportingcriteria established by the Company March312018basedontheinternalcontrolover 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 JOSHI & SAHNEY
CHARTERED ACCOUNTANTS
Firm Registration No.: 104359W
Sd/-
H.M.JOSHI
Place : Pune PARTNER
Date : 29th May 2018 Membership No. 031689

ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 of the Independent Auditors' Report of even date to themembers of the company on the standalone financial statements as of and for the year ended31 st March 2018)

i) In respect of its fixed assets:

a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

b) As explained to us the fixedassets have been physically verified by the managementduring the year. The discrepancies noticed on such verification were not material and havebeen properly dealt with in the books of account.

c) The title deeds of immovable properties as disclosed in Note 10 on fixedstatements are held in the name of the company.

ii) As the company does not have any inventory at the end of the year the provisionsof clause 3(ii) of the Order are not applicable to the company.

iii) The company has not granted any loans secured or unsecured to firms limitedliability partnerships or other parties covered in the register maintained under section189 of the Act. The company has granted a loan to an Associate Company covered in theregister maintained u/s 189 of the Act. (loan amount granted INR 226445879/- . At theend of the year principal outstanding is INR 225309605/- and interest receivablethereon is INR 12778561/-.) As per the terms agreed with the Associate Companyrepayment of principal amount and interest shall be done upon repayment of rupee term loanavailed by the said Associate Company from another financialinstitution or on availabilityof cash surplus with Associate Company after repayment of rupee term loan and meeting alloperational expenses. No interest has been recovered from the Associate Company during theyear except the amount of Tax Deducted at Source on the said interest and deposited by theAssociate Company.

iv) Based on the audit procedures conducted by us and according to the information andexplanations given to us in our opinion the company has not given any loans guaranteesor securities to any of its Directors or to any other persons in whom the Director isinterested under provisions of Section 185 of the Act. In our opinion and according to theinformation and explanations given to us the company has complied with the provisions ofsec.186 of the Act in respect of loans and investments made by it. v) The company has notaccepted any deposits from the public within the meaning of sections 73 74 75 and 76 ofthe Act and the Rules framed there under to the extent notified. vi) The CentralGovernmenthasspecifiedmaintenance of cost records under Sec.148 (1) of the Act applicablein respect of wind power generation activity of the company and we are of the opinion thatprima facie such accounts and records are made and maintained. We have not however madea detailed examination of the records with a view to determine whether they were accurateor complete. vii)

a) According to the information and explanations given to us and on the basis of ourexamination of records of the Company undisputed statutory dues including Provident FundEmployees' State Insurance Income-Tax Value added Tax Service Tax Goods & ServiceTax Cess and other statutory dues have been regularly deposited with the appropriateauthorities. As explained to us the company did not have any dues on account of SalesTax duty of Customs and duty of Excise.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income-Tax Value addedTax Sales Tax Service Tax Goods & Service Tax Cess and other statutory dues werein arrears as at 31st March 2018 for a period of more than six months from the date theybecame payable.

b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of Sales Tax Service Tax duty of Custom dutyof Excise Value added Tax and Cess as at 31st March 2018 which have not been depositedon account of any dispute.

viii) The company has not availed of any loans or borrowings from financialinstitutions bank government. There are no debenture holders. Accordingly the provisionsof Clause 3(viii) of the Order are not applicable to the company.

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) Based upon the audit procedures performed and information and explanations given tous by the Management we have neither come across any instance of fraud on or by theCompany or on the Company by its officers or employees noticed or reported during theyear nor have we been informed of such case by the management.

xi) According to the information and explanations given to us and based on ourexamination of the records of the company the company has paid / provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with schedule V to the Act.

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) The company has issued guarantees to Jharkhand Skill Development Mission Society(JSDMS) for mobilization advance INR 127247200/- and towards performance guarantee INR10048000/- on behalf of Mitcon Megaskill Centers Pvt. Ltd. (Associate in which companyholds 26% stake) and issued guarantee of INR 3776088/- to Rajasthan Skills &Livelihood Development Corporation (RSLDC) on behalf of Clear Maze Consulting Pvt. Ltd.(CMCPL) (company in which director of the company is a director and member). Issue ofabove guarantees requires approval / ratification of the Audit Committee u/s 177 and theBoard of Directors / Shareholders u/s 188 of the Companies Act 2013. The AuditCommittee and Board of Directors have for various reasons recorded in the Minutes of theirrespective meetings decided not to approve / ratify the said act of issue of guarantees bythe company to JSDMS and RSLDC.

Apart from the above according to the information and explanations given to us andbased on our examination of the records of the company transactions with the relatedparties are in compliance with Sections 177 and 188 of the Act where applicable. Detailsof related party transactions have been disclosed in the financial statements as requiredby the applicable accounting standards.

xiv) The company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of clause 3(xiv) of the Order are not applicable to the company.

xv) According to the information and explanations given to us and based on ourexamination of the records of the company the company has not entered into any non-cashtransactions with its directors or persons connected with him. Accordingly the provisionsof clause 3(xv) of the order are not 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 JOSHI & SAHNEY
CHARTERED ACCOUNTANTS
Firm Registration No.: 104359W
Sd/-
H.M.JOSHI
Place : Pune PARTNER
Date : 29th May 2018 Membership No. 031689