You are here » Home » Companies » Company Overview » Mohan Meakin Ltd

Mohan Meakin Ltd.

BSE: 590039 Sector: Consumer
NSE: N.A. ISIN Code: INE136D01018
BSE 05:30 | 01 Jan Mohan Meakin Ltd
NSE 05:30 | 01 Jan Mohan Meakin Ltd

Mohan Meakin Ltd. (MOHANMEAKIN) - Auditors Report

Company auditors report

TO THE MEMBERS OF MOHAN MEAKIN LIMITED Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of MOHAN MEAKINLIMITED ("the Company") which comprise the Balance Sheet as at March 31st2017 the Statement of Profit and Loss and the Cash Flow Statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation in which are incorporated the Returns for the year ended on that date auditedby the branch auditor of the Company's branch located at Lucknow.

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 and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsprescribed 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 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 of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.

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 and the audit evidence obtained bythe branch auditor in terms of their reports referred to in the Other Matter paragraphbelow is sufficient and appropriate to provide a basis for our audit opinion on thestandalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us and based on the consideration of reports of the branch auditor on separatefinancial statements of the Lucknow Distillery branch referred to in Other matterparagraph below 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 31st 2017 and its profit and its cash flows for the year ended onthat date.

Emphasis of Matter

We draw attention to Note 20(iii) of the standalone financial statements relating tothe uncertainty associated with the outcome of the ongoing litigation/arbitrationproceedings against the demand raised by GAIL (India) Limited aggregating to Rs 5539 lacsfor the calendar year 2014 2015 and 2016 on account of deficiency in the lifted quantityof gas per day. Based on the position explained in this note and on the basis of legaladvice the Company's management is confident that the demand is not legally tenable andwould not result in any liability on the Company. Our opinion is not modified in respectof the above matter.

Other Matter

We did not audit the financial statements of Lucknow Distillery branch included in thestandalone financial statements of the Company whose financial statements reflect totalassets of Rs. 438 lacs as at 31st March 2017 and total revenues of Rs. 38 lacs for theyear ended on that date as considered in the standalone financial statements. Thefinancial statements of the Lucknow Distillery branch have been audited by the branchauditor whose report have been furnished to us and our opinion in so far as it relates tothe amounts and disclosures included in respect of theLucknow Distillery branch and ourreport in terms of subsection (3) of Section 143 of the Act in so far as it relates tothe aforesaid branch is based solely on the report of such branch auditor.

Our opinion on the standalone financial statements and our report on Other Legal andRegulatory Requirements below 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 and on theconsideration of the report of the branch auditor on the separate financial statements ofthe branch referred to in the Other Matter paragraph above we report to the extentapplicable that: a) We have sought and obtained all the information and explanations whichto the best of 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 the Companyso far as it appears from our examination of those books and proper returns adequate forthe purposes of our audit have been received from the branch at Lucknow not visited by us.c) The report on the accounts of the branch of the Company located at Lucknow auditedunder Section 143 (8) of the Act by the branch auditor has been sent to us and have beenproperly dealt with by us in preparing this report. d) The Balance Sheet the Statement ofProfit and Loss and the Cash Flow Statement dealt with by this Report are in agreementwith the books of account and with the returns received from the branch not visited by us.e) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards prescribed under section 133 of the Act. f) The matter describedunder the Emphasis of Matter paragraph above in our opinion may have an adverse effecton the functioning of the Company. g) On the basis of the written representations receivedfrom the directors as on March 31st 2017 taken on record by the Board of Directors noneof the directors is disqualified as on March 31st 2017 from being appointed as a directorin terms of Section 164 (2) of the Act. h) With respect to the adequacy of the internalfinancial controls over financial reporting of the Company and its branch and theoperating effectiveness of such controls refer to our separate Report in "AnnexureA".

Our report expresses an unmodified opinion on the adequacy and operating effectivenessof the Company's internal financial controls over financial reporting. i) With respect tothe other matter to be included in the Auditor's Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules 2014 as amended in our opinion and to the best ofour information and according to the explanations given to us: i.

The Company has disclosed the impact of pending litigations on its financial positionin its standalone financial statements-Refer Note 20(i) 20(iii) and 33 to the standalonefinancial statements. ii.

The Company did not have any long-term contracts for which there were any materialforeseeable losses- Refer Note 20(iii) to the standalone financial statements. iii. Therehas been no delay in transferring amounts required to be transferred to the InvestorEducation and Protection Fund by the Company- Refer Note-9 to the standalone financialstatements. iv. The Company has provided requisite disclosures in the financial statementsas regards its holding and dealings in Specified Bank Notes as defined in the NotificationS.O. 3407(E) dated the 8th November 2016 of the Ministry of Finance during the periodfrom 8th November 2016 to 30th December 2016. Based on the audit procedures performed andthe representations provided to us by the management we report that the disclosures are inaccordance with the books of account maintained by the Company and as produced to us andbranch auditor by the management. Refer Note-38 to the standalone financial statements.

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

For A.F FERGUSON ASSOCIATES Chartered Accountants (Firm's Registration No. 102849W)

Vijay Agarwal (Partner) (Membership No. 094468) Place: New Delhi Date: May 30 2017

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 (h) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date) Report on the Internal FinancialControls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of MohanMeakin Limited ("the Company") as of March 31 2017 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate which includes internal financial contorls over financial reporting of the Company'sbranch located at Lucknow.

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 criteriaestablish by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Contorls Over Financial Reportingissued by the Institute of Chartered Accountants of India (the "Guidance Note").These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to respective company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditor's 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") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated 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 judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained and the audit evidence obtained by thebranch auditors of the branch located at Lucknow in terms of their report referred to inthe Other Matter paragraph below is sufficient and appropriate to provide a basis for ouraudit opinion on the Company's internal financial controls system over financialreporting.

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 and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the 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 to the best of our information and according to the explanations givento us and based on the consideration of the report of the branch auditor on internalfinancial controls system over financial reporting of the Lucknow Distillery branchreferred to in the Other Matter paragraph below the Company has in all materialrespects an adequate internal financial controls system over financial reporting and suchinternal financial controls over financial reporting were operating effectively as atMarch 31st 2017 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.

Other Matters

Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operatingeffectiveness of the internal financial controls over financial reporting in so far as itrelates to Lucknow Distillery Branch is based on the corresponding report of the branchauditor.

Our opinion is not modified in respect of the this matters.

For A.F FERGUSON ASSOCIATES

Chartered Accountants (Firm's Registration No. 102849W)

Vijay Agarwal

(Partner) (Membership No. 094468) Place: New Delhi

Date: May 30 2017

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

(i) (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 of fixed assets to cover all the items ina phased manner over a period of three years which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. Pursuant to the programcertain fixed assets were physically verified by the Management during the year. Accordingto the information and explanations given to us no material discrepancies were noticed onsuch verification.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed provided to us we reportthat the title deeds comprising all the immovable properties of land and buildings areheld in the name of the Company as at the balance sheet date. Immovable properties of landand buildings whose title deeds have been mortgaged as security for term loans from bankare held in the name of the Company based on the confirmations received by us from bank.

In respect of immovable properties of land that have been taken on lease and disclosedas fixed asset in the financial statements the lease agreements are in the name of theCompany where the Company is the lessee in the agreement (Also refer Note 4 to thefinancial statements in respect of possession of leasehold land).

(ii) As explanined to us the inventories were physically verified during the year bythe Management at reasonable intervals and no material discrepancies were noticed onphysical verification.

(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 of the Companies Act 2013.

(iv) The Company has not granted any loans made investments or provided guaranteesunder Section 185 and Section 186 of the Companies Act 2013 and hence reporting underclause (iv) of the CARO 2016 is not applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year. In respect of unclaimed deposits the Company hascomplied with the provisions of Sections 73 to 76 or any other relevant provisions of theCompanies Act 2013.

(vi) The maintenance of cost records has not been specified by the Central Governmentunder section 148 (1) of the Companies Act 2013.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income tax Sales tax/ Value Addedtax Service tax Customs Duty Excise Duty Cess and other material statutory duesapplicable to it with the appropriate authorities. (b) There were no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income Tax Sales Tax/Value Added Tax Service Tax Customs Duty Excise Duty Cess and other material statutorydues in arrears as at March 31 2017 for a period of more than six months from the datethey became payable.

(c) Details of dues of Income-Tax Sales Tax/ Value Added Tax Customs Duty and ExciseDuty which have not been deposited as on March 31 2017 on account of disputes are givenbelow:

Name of Nature of Forum where dispute Amount* Amount paid Period to which the theStatute the dues is pending (Rs. lacs) under protest amount relates (Rs. lacs)

Sales tax Sales tax Appellate authority up to 1078.74 - 1975-76 1978 to 1979 laws(including Commissioner's level 1987 to 1989 1999-2000 entry tax) 2006-07 to 2013-14Sales tax Appellate 44.85 - 1984-85 1985-86 Tribunal 1991-92 1992-93 2006-07 to2009-10 High Court 8.85 - 1994-95 1995-96 1997-98 1998-99 Supreme Court 398.55 -2001-02 to 2010-11 Trade tax Appellate Tribunal 20.22 - 1984-85 1985-86 1987-88 2005-06to 2007-08 High Court 1.27 - 1990-91 to 1992-93 1994-951995-96 State Excise Excise dutyHigh Court 149.30 31.31 1985-86 to 2011-12 laws Central Excise Excise duty CESTAT 13.26 -2005 to 2007 Appellate authority up to 42.80 - 2008-09 to Commissioner's level 2010-11

Custom laws Custom duty CESTAT 80.37 - 1994-95 to 2003-04

* Amount as per demand orders including interest and penalty wherever quantified in theorder.

The following matter which have been excluded from the table above have been decidedin favour of the Company but the concerned authorities have preferred appeals at higherlevels:

Name of the Statute Nature of the dues Forum where dispute is pending Amount (Rs. lacs) Period to which the amount relates
Sales tax laws Sales tax Sales tax appellate Tribunal 358.08 1987 to 1989 1990 to 1993
State Excise laws Excise duty Supreme Court 236.53 1963 to 1985 1997 to 1999
Income tax laws Income tax Income tax appellate Tribunal 423.95 2002-03 to 2005-06

Further there are no disputed dues with respect to Service Tax which have not beendeposited as on March 31 2017 on account of disputes.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the rapayment of loans or borrowings to banks. TheCompany has not taken any loans or borrowings from financial institutions and governmentor has not issued any debentures.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments).

Further in our opinion and according to the information and explanations given to usthe term loans have been applied by the Company during the year for the purposes for whichthey were raised.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theCARO 2016 Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Sections 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.

(xiv) During the year Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of CARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year Company has not entered into any non-cash transactions with its directorsor directors of its associate company or persons connected with them and hence provisionsof section 192 of the Companies Act 2013 are not applicable. (xvi) The Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For A. F. FERGUSON ASSOCIATES

Chartered Accountants (Firm's Registration No. 102849W)

Vijay Agarwal

(Partner) (Membership No. 094468) Place : New Delhi Date : May 30 2017