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Modern India Ltd.

BSE: 503015 Sector: Others
NSE: N.A. ISIN Code: INE251D01023
BSE 00:00 | 18 Apr 38.90 1.85
(4.99%)
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NSE 05:30 | 01 Jan Modern India Ltd
OPEN 38.90
PREVIOUS CLOSE 37.05
VOLUME 100
52-Week high 49.50
52-Week low 22.80
P/E
Mkt Cap.(Rs cr) 146
Buy Price 38.90
Buy Qty 110.00
Sell Price 38.90
Sell Qty 30.00
OPEN 38.90
CLOSE 37.05
VOLUME 100
52-Week high 49.50
52-Week low 22.80
P/E
Mkt Cap.(Rs cr) 146
Buy Price 38.90
Buy Qty 110.00
Sell Price 38.90
Sell Qty 30.00

Modern India Ltd. (MODERNINDIA) - Auditors Report

Company auditors report

To the Members of

Modern India Limited

1. Report on the Standalone Indian Accounting Standards (Ind AS) FinancialStatements

We have audited the accompanying standalone Ind AS financial statements of ModernIndia Limited (‘the Company') which comprise the Balance Sheet as at March 312018 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Cash Flow and the Statement of Changes in Equity for the year then ended anda summary of the significant accounting policies and other explanatory informationprepared based on the relevant records (hereinafter referred to as ‘the StandaloneInd AS Financial Statements').

2. Management's Responsibility for the Standalone Ind AS 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 Ind AS financial statements that give a true and fair view of the stateof affairs(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 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 standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

3. Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

We have taken into account the provisions of the Act and the Rules made there underincluding 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 thereunder.

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards 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 standalone IndAS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the standalone Ind AS financialstatements.

4. Basis for Qualified Opinion

Trade receivables as on March 31 2018 include an amount of Rs. 1359.51 lakhs (net offRs. 93.61 lakhs recovered till date) outstanding in respect of commodities tradingtransaction done on National Spot Exchange Limited (NSEL). The company has filed arepresentative suit in the Hon'ble Bombay High Court for recovery of the same. Ministry ofCorporate Affairs (MCA) had ordered merger of 63 Moons Technologies Limited with NSELwhich was up held by the Hon'ble High Court of Bombay. The same has been challenged by 63Moons Technological Limited in the Hon'ble Supreme Court of India who has stayed themerger. Pending outcome of the legal suit and resolution of uncertainties involved themanagement has considered the receivable as good for recovery. However in the absence ofappropriate audit evidence we are unable to determine the extent of recovery possible inthis case [Refer note 8(i) to the standalone Ind AS financial statements].

5. Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in Basis forQualified Opinion paragraph above the aforesaid standalone Ind AS financial statementsgive the information required by the Act in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs (financial position) of the Company as at March 31 2018 and its loss(including other comprehensive income) its cash flows and the changes in equity for theyear ended on that date.

6. Emphasis of Matter

We draw attention to note 37 of the standalone IndAS financial statements whereindespite accumulated losses of Rs. 669.87 lakhs as at March 31 2018 incurred by one ofits subsidiary namely Modern India Property Developers Limited (MIPDL) no provision isconsidered necessary in the Company's long term investment of Rs. 1500 lakhs in MIPDL asin the opinion of the Management the diminution in value of investment is temporary innature.

Our opinion is not modified in respect of this matter.

7. Other Matter

The comparative financial information of the Company for the year ended March 31 2017and the transition date opening balance sheet as at April 1 2016 included in thesestandalone Ind AS financial statements are based on the previously issued statutoryfinancial statements prepared in accordance with the Companies (Accounting Standards)Rules 2006 (as amended) audited by the predecessor auditor whose report for the yearended March 31 2017 and March 31 2016 dated May 19 2017 and May 26 2016 respectivelyexpressed a modified opinion on those financial statementsas adjusted for the differencesin accounting principles adopted by the Company on transition to the Ind AS which havebeen audited by us.

Our opinion is not modified in respect of this matter.

8. Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's 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 as weconsidered appropriate and according to the information and explanations given to us wegive in the Annexure – A a statement on the matters specified in paragraphs 3 and 4of the Order.

As required by Section 143 (3) of the Act we report that:

(a) We have sought and except for the matters described in the Basis for QualifiedOpinion paragraph obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit;

(b) Except for the possible effects of the matter prescribed in the Basis for QualifiedOpinion paragraph above in our opinion proper books of account as required by law havebeen kept by the Company 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 Statement of Cash Flow and the Statement of Changes in Equity dealt with bythis Report are in agreement with the books of account;

(d) Except for the effects of the matters described in the Basis for Qualified Opinionparagraph above in our opinion the aforesaid standalone Ind AS financial statementscomply with the Accounting Standards prescribed under Section 133 of the Act;

(e) The matter described in the Basis for Qualified Opinion paragraph above in ouropinion may have an adverse effect on the functioning of the Company;

(f) On the basis of the written representations received from the directors as on March31 2018 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 from being appointed as a director in terms of Section 164 (2) of theAct;

(g) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion paragraph;

(h) 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 - B; and

(i) 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 knowledge and belief and according to the information andexplanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements – Refer note no. 8(i) to thestandalone Ind AS financial statements;

ii. The company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses- Refer note no. 36 to the standalone IndAS financial statements; and

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For Khandelwal Jain & Co
Chartered Accountants
Registration No: 105049W
Sd/-
Narendra Jain
Partner
Membership No.: 048725
Place: Mumbai
Date: May 24 2018

Annexure – A to Independent Auditor's Report

(Referred to in paragraph 8 of the Independent Auditor's Report of even date to themembers of Modern India Limited on the standalone Ind AS financial statements as of andfor the year ended March 31 2018)

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

(b) The fixed assets have been physically verified by the management during the year.In our opinion the frequency of verification is reasonable having regard to the size ofthe Company and the nature of its assets.

No material discrepancies were noticed on such verification.

(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 immovable properties areheld in the name of the Company.

(ii) (a) The inventory has been physically verified during the year by the managementat reasonable intervals.

(b) The procedures of physical verification of inventories followed by the managementare reasonable and adequate in relation to the size of the company and the nature of itsbusiness.

(c) In our opinion and according to the explanations given to us the Company ismaintaining proper records of inventory. The discrepancies noticed on verification betweenthe physical stocks and the book records were not material and properly dealt with in thebooks of account

(iii) The Company has not granted any loans secured or unsecured to Companies FirmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 the Act. Therefore the provisions of Clause 3(iii) (iii)(a) (iii)(b) and(iii)(c) of the said Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Companies Act 2013in respect of the loans and investments made and guarantees and security provided by it.

(v) According to the information and explanations given to us 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) As informed to us by the management the Central Government of India has notspecified the maintenance of cost records under sub-section (1) of section 148 of the Actfor any of the products of the Company.

(vii) (a) According to the information and explanations given to us and records of theCompany examined by us in our opinion the Company is generally regular in depositing theundisputed statutory dues including Provident Fund Employees' State Insurance IncomeTax Sales Tax Service Tax Cess Goods and Service Tax duty of custom duty of exciseValue Added Tax and other material statutory dues as applicable with the appropriateauthorities.

According to the records of the Company there were no undisputed amounts payable inrespect of above in arrears as at March 31 2018 for a period of more than six monthsfrom the date they became payable.

(b) According to the records of the Company there are no dues of income tax salestax service tax goods and service tax duty of custom duty of excise and cess whichhave not been deposited on account of any dispute.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted during the year in repayment of dues to bank financialinstitution and government. The Company did not have any outstanding dues to government ordebenture holders during the year.

(ix) The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) and term loans. Accordingly provisions ofclause 3(ix) of the Order are not applicable to the Company.

(x) Based upon the audit procedures performed and according to the information andexplanations given to us no material fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the course of our audit.

(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) In our opinion and according to the information and explanations given to us theCompany is not a nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable to the Company.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone Ind AS financial statements as requiredby the applicable accounting standards.

(xiv) According to the information and explanations given 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) 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 directors or persons connected with him.

Accordingly the provisions of clause 3(xv) of the Order are not applicable to theCompany.

(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 Khandelwal Jain & Co
Chartered Accountants
Registration No: 105049W
Sd/-
Narendra Jain
Partner
Membership No.: 048725
Place: Mumbai
Date: May 24 2018

Annexure-B to Independent Auditor's Report

(Referred to in paragraph 8(h) of the Independent Auditor's Report of even date to themembers of Modern India Limited on the standalone Ind AS financial statements for the yearended March 31 2018)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Act

We have audited the internal financial controls over financial reporting of ModernIndia Limited ("the Company") as of 31 March 2018 in conjunction with ouraudit of the standalone Ind AS 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 (‘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 Act.

Auditors' Responsibility

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 deemed to be prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by ICAI. 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 Ind AS financial statements whether due to fraudor 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 standalone Ind AS financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standaloneInd AS financial statements in accordance with generally accepted accounting principlesand that receipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the standaloneInd AS 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.

Opinion

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 March 31 2018 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 Khandelwal Jain & Co
Chartered Accountants
Registration No: 105049W
Sd/-
Narendra Jain
Partner
Membership No.: 048725
Place: Mumbai
Date: May 24 2018