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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 Ind AS Financial Statements

We have audited the accompanying standalone Ind AS Financial Statements of Mohan MeakinLimited ("the Company") which comprise the Balance Sheet as at March 31 2018the Statement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofsignificant accounting policies and other explanatory information (hereinafter referredto as "Standalone Ind AS Financial Statements") in which are incorporated theReturns for the year ended on that date audited by the branch auditor of the Company'sbranch at Lucknow.

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 (Ind AS) specified under Section 133 of the Act read with relevant rules issuedthereunder. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of 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 and ensuring their operating effectiveness and the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Standalone Ind AS Financial Statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

In preparing these Standalone Ind AS Financial Statements management is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

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 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 conductedour audit in accordance with the Standards on Auditing specified under Section 143(10) ofthe Act. Those Standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether these Standalone Ind ASFinancial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the Standalone Ind AS Financial Statements. The procedures selected dependon the auditors' judgment including the assessment of the risks of material misstatementof the Standalone Ind AS Financial Statements whether due to fraud or error. In makingthose risk assessments the auditor considers internal financial control relevant to theCompany's preparation of the Standalone Ind AS Financial Statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the Standalone Ind AS Financial Statements.

We are also responsible to conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in the auditor's report tothe related disclosures in the Standalone Ind AS Financial Statements or if suchdisclosures are inadequate to modify the opinion. Our conclusions are based on the auditevidence obtained up to the date of the auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on these Standalone Ind AS 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 report of the branch auditor on separateInd AS financial statements and other financial information of the Lucknow Distillery("the Branch") the aforesaid Standalone Ind AS Financial Statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India including the IndAS of the state of affairs of the Company as at March 31 2018 its profit includingother comprehensive income its cash flows and changes in equity for the year ended onthat date.

Other Matters

a) We did not audit the Ind AS financial statements of one Branch whose Ind ASfinancial statements reflects total assets of Rs. 328.80 lacs and total revenue of Rs.451.36lacs (including exceptional items of Rs. 417.39 lacs) for the year ended on thatdate as considered in these Standalone Ind AS Financial Statements. The Ind AS financialstatements of the Branch have been audited by the branch auditor whose report has beenfurnished to us and our opinion on the Standalone Ind AS Financial Statements in so faras it relates to the amounts and disclosures included in respect of this Branch and ourreport in terms of sub-section (3) of Section 143 of the Act is based solely on thereport of the branch auditor.

b) The comparative financial information of the Company for the year ended March 312017 and the transition date opening balance sheet as at April 01 2016 included in theseStandalone Ind AS Financial Statements are based on the previously issued statutoryfinancial statements prepared in accordance with the accounting standards notified underthe section 133 of the Act read together with rule 7 of Companies (Accounts) Rules 2014audited by the predecessor auditor whose report for the year ended March 31 2017 andMarch 31 2016 dated May 30 2017 and May 302016 respectively expressed an unmodifiedopinion on those standalone financial statements as adjusted for the differences in theaccounting principles adopted by the Company on transition to the Ind AS which have beenaudited by us(excluding pertaining to the branch refer note (a) above).

Our opinion on the Standalone Ind AS Financial Statements and our report on the OtherLegal and Regulatory Requirements below is not modified in respect of the above matterswith respect to our reliance on the work done and the report of the branch auditor.

Report on Other Legal and Regulatory Requirements

(1) As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act we give in "Annexure 1" a statement on the matters specified inparagraphs 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 and proper returnsadequate for the purposes of our audit have been received from the branch not visited byus;

c. The reports on the accounts of the branch of the Company at Lucknow audited underSection 143 (8) of the Act by branch auditors have been sent to us and have been properlydealt with by us in preparing this report;

d. The Balance Sheet the Statement of Profit and Loss Cash Flow Statement and theStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account and with the returns received from the branch not visited by us;

e. In our opinion the aforesaid Standalone Ind AS Financial Statements comply with theIndian Accounting Standards specified under Section 133 of the Act read with relevantrules issued there under;

f. On the basis of written representations received from the directors as on March 312018 and 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. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls we give ourseparate Report in "Annexure 2"; and

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 in its Standalone Ind AS Financial Statements – Refer Note 41to theStandalone Ind AS Financial Statements;

(ii) The Company did not have any long-term contracts including derivative contracts.Hence the question of any material foreseeable losses does not arise; and

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

For Haribhakti & Co.LLP Chartered Accountants
ICAI Firm Registration No.103523W/W100048
Mayur Gupta Partner
Membership No.505629
Place: New Delhi
Date: May 30 2018

ANNEXURE 1 TO THE INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report of even date to the members of MohanMeakin Limited on the Standalone Ind AS Financial Statements for the year ended March 312018] Our reporting on the Order includes a branch incorporated in India to which theOrder is applicable which has been audited by another auditor and our report in respectof the branch is based solely on the report of the other auditor to the extent consideredapplicable for reporting under the Order in the case of these Standalone Ind AS FinancialStatements.

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

(b) During the year the fixed assets of the Company have been physically verified bythe management as per the regular program of verification which in our opinion isreasonable having regard to the size of the company and nature of its assets. As informedno material discrepancies were noticed on such verification.

(c) According to the information and explanation 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 deed comprising all the immovable properties of land and building areheld in the name of the company as at the balance sheet date. Immovable properties of landand building whose title deeds have been mortgaged as security for term loan/cash creditfrom bank are held in the name of the company based on the confirmations received by usfrom Bank.

In respect of immovable property of land that have been taken on lease and disclosed asNon Current Asset in the Standalone Ind AS Financial Statements the lease agreement is inthe name of the Company (Also refer Note 42 to the Standalone Ind AS Financial Statementsin respect of possession of aforesaid leasehold land).

(ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of verification is reasonable. As informed no materialdiscrepancies were noticed on physical verification carried out during the year.

(iii) As informed the Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under Section 189 of the Act. Accordingly paragraph 3 (iii)(a) 3 (iii)(b) and3 (iii)(c) of the Order are not applicable to the Company.

(iv) Based on information and explanation given to us there are no loans investmentguarantees and security where provisions of Section 185 and 186 of the Act are required tobe complied with. Accordingly paragraph 3 (iv) of the Order is not applicable to theCompany.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the provisions of Sections 73to 76 of the Act and the rules framed there under. In respect of unclaimed interests theCompany has complied with the provisions of Section 73 to 76 or any other relevantprovisions of the Companies Act 2013.

(vi) The Central Government has not prescribed the maintenance of cost records for anyof the products of the Company under sub-section (1) of Section 148 of the Act and therules framed there under.

(vii) (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insurance incometax sales tax service tax value added tax goods and service tax customs duty exciseduty cess and any other material statutory dues applicable to it however there havebeen slight delay in few cases.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income tax sales taxservice tax value added tax goods and service tax customs duty excise duty cess andany other material statutory dues applicable to it were outstanding at the year end fora period of more than six months from the date they became payable.

(b) According to the information and explanation given to us the dues outstanding withrespect to income tax sales tax service tax value added tax goods and service taxcustoms duty excise duty on account of any dispute are as follows:

(Rs. In lacs)
Name of the statute Nature of the dues Amount Amount paid Under Protest Period to which the amount relates Forum where dispute is pending
Central Excise Excise duty 42.80 - 2008-09 to 2010-11 Appellate authority up to commissioner level
State Excise Excise duty 145.31 31.31 1985-86 to 2011-12 High Court
Laws 199.86 199.86 1963-85 Supreme Court
Sales tax Laws CST 65.40 - 2006-07 2010-11 to 2013-14 Appellate authority up to commissioner level
26.54 - 1994-95 1995-96 1997-981998-99 1999-2000 Appellate authority up to commissioner level
VAT 0.26 - 2011-12 Appellate authority up to commissioner level
3.03 - 2005-06 to 2008-09 2011-12 Appellate authority up to commissioner level

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment 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 any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. In our opinion and accordingto the information and explanations given to us term loans have been applied for thepurposes for which they were obtained during the year.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by the Company or any fraud on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such instance by themanagement.

(xi) According to the information and explanations given to us managerial remunerationhas been paid / provided in accordance with the requisite approvals mandated by theprovisions of Section 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. Therefore paragraph 3(xii) of the Or der is notapplicable to the Company.

(xiii) According to the information and explanation given to us all transactionsentered into by the Company with the related parties are in compliance with Sections 177and 188 of Act where applicable and the details have been disclosed in the FinancialStatements etc. as required by the applicable Accounting Standards.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review. Thereforeparagraph 3(xiv) of the Order is not applicable to the Company. (xv) According to theinformation and explanations given to us the Company has not entered into any non-cashtransactions with directors or persons connected with him during the year.

(xvi) According to the information and explanation given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.

For Haribhakti & Co. LLP
Chartered Accountants
ICAI Firm Registration No. 103523W/W100048
Mayur Gupta
Partner
Membership No.505629
Place: New Delhi
Date: May 30 2018

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report of even date to the members of MohanMeakin Limited on the Standalone Ind AS Financial Statements for the year ended March 312018]

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Act

In conjunction with our audit of the StandaloneInd AS Financial Statements of theCompany as of and for the year ended March 31 2018 we have audited the internalfinancial controls over financial reporting of the Company.

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 Companies Act 2013.

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 specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth issued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 included obtaining anunderstanding of internal financial controls over financial reporting 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 judgement including the assessment of the risks of materialmisstatement of the Standalone Ind AS 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 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 ICAI.

Other Matter

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 the Company's branch at Lucknow is based on corresponding report of the auditorof such branch.

Our opinion is not modified in respect of this matter.

For Haribhakti & Co. LLP
Chartered Accountants
ICAI Firm Registration No.103523W /W100048
Mayur Gupta
Partner
Membership No.505629
Place: New Delhi
Date: May 30 2018