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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 Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying Standalone Ind AS Financial Statements of MohanMeakin Limited ("the Company") which comprise the Balance Sheet as at March31 2019 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Cash Flow Statement for the year then ended andnotes to the Standalone Ind AS Financial Statements including a summary of significantaccounting policies and other explanatory information (hereinafter referred to as"Standalone Ind AS Financial Statements") in which are included the returns forthe year ended on that date audited by the branch auditor of the Company's branch atLucknow.

In our opinion and to the best of our information and according to the explanationsgiven to us and based on the consideration of the report of the branch auditor onseparate Ind AS financial statements and other financial information of Lucknow Distillery("the Branch") the aforesaid Standalone Ind AS Financial Statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India including the Indian Accounting Standards ("IndAS") of the state of affairs of the Company as at March 31 2019 its profit(including other comprehensive income) changes in equity and its cash flows for the yearended on that date.

Basis for Opinion

We conducted our audit in accordance with Standards on Auditing (SAs) specified undersection 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone Ind ASFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia ("ICAI") together with the ethical requirements that are relevant to ouraudit of the StandaloneInd AS Financial Statements under the provisions of the Act andRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Ind AS Financial Statements of the currentperiod. These matters were addressed in the context of our audit of the Standalone Ind ASFinancial Statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Key audit matters How our audit addressed the key audit matter
Revenue Recognition
(Refer Note 1.4 and Note 52 to the accompanying Standalone Ind AS Financial Statements)
The variety of terms that define when control is transferred to the customer give rise to the risk that revenue is not recognized in the correct period. Our audit procedures included the following:
Assessed the Company's revenue recognition policy prepared as per Ind AS 115 ‘Revenue from contracts with customers'.
Revenue is measured net of returns discounts sales incentives/rebate and amounts collected on behalf of third parties (such as sales tax). Understood evaluated and tested the key controls implemented by the Company in relation to revenue recognition discounts and rebates.
There is a risk that these discountand rebates may not be correctly recorded as it requires a certain degree of estimationresulting in understatement of the associated expenses and accrual. Performed sample tests of individual sales transaction and verified sales invoices sales orders and other related documents of such samples. Further in respect of such samples checked that the revenue has been recognized as per the accounting policy.
Additionally the application of new revenue accounting standard - Ind AS 115 ‘Revenue from contracts with customers' involves reassessment of revenue recognition policy and collation of information like disaggregated revenue for the disclosure purpose. Performed cut off procedures on sample basis for sales transactions made pre and post year end to ensure correctness of period of revenue recognition
Tested the calculations related to discounts and rebates and other supporting documents on test check basis.
Considering the significant risk associated with revenue recognition it was determined to be a key audit matter in our audit of the Standalone Ind AS Financial Statements. Obtained external confirmations from customers on sample basis to support existence assertion of trade receivables.
Verified the relevant disclosures made in the financial statements in accordance with Ind AS 115.

Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Board's Report including ManagementDiscussion & Analysis but does not include the Ind AS Financial Statements and ourauditor's report thereon. The Company's Board's Report including Management Discussion& Analysis is expected to be made available to us after the date of this auditor'sreport.

Our opinion on the Standalone Ind AS Financial Statements does not cover the otherinformation and we will not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Ind AS Financial Statements ourresponsibility is to read the other information identified above when it becomes availableand in doing so consider whether the other information is materially inconsistent withthe Standalone Ind AS Financial Statements or our knowledge obtained in the audit orotherwise appears to be materially misstated.

Responsibilities of Management and Those Charged with Governance for the Standalone IndAS Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Standalone Ind AS FinancialStatements that give a true and fair view of the financial positionfinancial performance(including other comprehensive income) changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including Ind ASspecified under section 133 of the Act read with relevant rules issued thereunder. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Standalone Ind AS FinancialStatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the Standalone Ind AS Financial Statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone Ind ASFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of this Standalone Ind AS Financial Statements. As part of an audit inaccordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the Standalone Ind ASFinancial Statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management. • Conclude on theappropriateness of management's use of the going concern basis of accounting and based onthe audit evidence obtained whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company's ability to continue as a goingconcern. If we conclude that a material uncertainty exists we are required to drawattention in our auditor's report to the related disclosures in the Standalone Ind ASFinancial Statements or if such disclosures are inadequate to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the Standalone IndAS Financial Statements including the disclosures and whether the Standalone Ind ASFinancial Statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the StandaloneInd AS FinancialStatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

Other Matter

We did not audit the Ind AS financial statements of one Branch whose Ind AS financialstatements reflects total assets of Rs. 302.65 lacs as at March 31 2019 and totalrevenue of 426.32 lacs for the year ended on that date as considered in these StandaloneInd AS Financial Statements. The Ind AS financial statements of the Branch have beenaudited by the branch auditor whose report has been furnished to us by the management andour opinion on the Standalone Ind AS Financial Statements in so far as it relates to theamounts and disclosures included in respect of this Branch and our report in terms ofsection 143(3) of the Act in so far as it relates to the aforesaid Branch is basedsolely on the report of the branch auditor.

Our opinion on the Standalone Ind AS Financial Statements and our report on the OtherLegal and Regulatory Requirement below is not modified in respect of the above matterwith 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 (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of section 143(11) of the Act we givein "Annexure 1" a statement on the matters specified in paragraphs 3 and 4 ofthe 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 Branch not visited by us;

c. The report on the accounts of the Branch of the Company at Lucknow audited undersection 143(8) of the Act by branch auditor has been sent to us and has been properlydealt with by us in preparing this report;

d. The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Statement of Changes in Equity and the Cash Flow Statement dealt with by thisreport are in agreement with the books of account and with the returns received fromBranch not visited by us;

e. In our opinion the aforesaid StandaloneInd AS Financial Statements comply with theIndian Accounting Standards specified under section 133 of the Act read with relevantrules issued thereunder;

f. On the basis of the written representations received from the directors as on March31 2019 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2019 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 with reference tofinancial statements of the Company and the operating effectiveness of such controls wegive our separate report in "Annexure 2".

h. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act; In our opinion and to thebest of our information and according to the explanations given to us the remunerationpaid/ provided by the Company to its directors during the year is in accordance with theprovisions of section 197 of the Act;

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 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 42 to theStandalone Ind AS Financial Statements;

ii. The Company did not have any long-term contracts including derivativecontracts.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
Place: New Delhi Mayur Gupta Partner
Date: May 25 2019 Membership No.: 505629

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 312019]

Our reporting on the Order includes a branch incorporated in India to which the Orderis applicable which has been audited by another auditor and our report in respect of thebranch 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 cash credit from bankare held in the name of the company based on the confirmations received by us from 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 agreements arein the name of the Company (Also refer Note 43 to the Standalone Ind AS FinancialStatements in 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 Period to which the amount relates Amount paid Under Protest 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 1985-86 to 2011-12 31.31 High Court
Laws 592.19 1963-85/1985-2011 592.19 Supreme Court
Sales tax Laws Sales Tax 65.40 2006-07 2010-11 to 2013-14 - Appellate authority up to commissioner level
U.P. VAT Act VAT 0.26 2011-12 - Appellate authority up to commissioner level
State Excise Laws Excise Duty 127.30 2011-12 2013-14 - 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 money by way of initial public issue 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 Order is not applicableto 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 the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with him duringthe 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
Place: New Delhi Partner
Date: May 25 2019 Membership No.505629

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 MohanMeakinLimited on the Standalone Ind AS Financial Statements for the year ended March 312019]

Report on the Internal Financial Controls with reference to Financial Statements underClause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls with reference to financial statementsof Mohan Meakin Limited ("the Company") as of March 31 2019 in conjunction withour audit of the Standalone Ind AS Financial Statements of the Company for the year endedon that 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 with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with 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 with reference to financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial controls withreference to financial statements assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgement includingthe assessment of the risks of material misstatement of the Financial Statements whetherdue 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 withreference to financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements

A company's internal financial control with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of Financial Statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the Company;(2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of FinancialStatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 with reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls with reference to financial statements and such internal financialcontrols with reference to financial statements were operating effectively as at March 312019 based on the internal control with reference to financial statements criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note 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 with reference to financial statements inso far as it relates to the Company's branch at Lucknow is based on corresponding reportof the auditor of 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
Place: New Delhi Partner
Date: May 25 2019 Membership No.505629