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Mukand Ltd.

BSE: 500460 Sector: Metals & Mining
NSE: MUKANDLTD ISIN Code: INE304A01026
BSE 00:00 | 22 Feb 52.10 2.45
(4.93%)
OPEN

50.95

HIGH

53.45

LOW

50.15

NSE 00:00 | 22 Feb 52.05 2.05
(4.10%)
OPEN

51.30

HIGH

53.95

LOW

50.10

OPEN 50.95
PREVIOUS CLOSE 49.65
VOLUME 3152
52-Week high 80.00
52-Week low 42.50
P/E 12.74
Mkt Cap.(Rs cr) 737
Buy Price 53.05
Buy Qty 49.00
Sell Price 53.45
Sell Qty 23.00
OPEN 50.95
CLOSE 49.65
VOLUME 3152
52-Week high 80.00
52-Week low 42.50
P/E 12.74
Mkt Cap.(Rs cr) 737
Buy Price 53.05
Buy Qty 49.00
Sell Price 53.45
Sell Qty 23.00

Mukand Ltd. (MUKANDLTD) - Auditors Report

Company auditors report

To the Members of Mukand Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of MukandLimited ("the Company") which comprise the Balance Sheet as at March 312018 the Statement of Profit and Loss (including Other Comprehensive Income) the CashFlow Statement and the Statement of Changes in Equity for the year then ended and asummary of significant accounting policies and other explanatory information (hereinafterreferred to as "IndAS Financial Statements").

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.

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 the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone Ind AS Financial 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 atrue and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of 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 audit opinion on the standalone Ind AS Financial Statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS 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 including the Ind AS of thestate of affairs of the Company as at March 31 2018 its profit including othercomprehensive income its cash flows and changes in equity for the year ended on thatdate.

Emphasis of Matter

We draw attention to the following matter in the notes to the standalone Ind ASFinancial Statements: a) Note ‘12 C' to the standalone Ind AS Financial Statementsrelating to the exposure in Bombay Forgings Limited (BFL) aggregating to Rs. 86.49 croresas at March 31 2018 (Rs. 82.01 crores as at March 31 2017) where the management hasbarring any significant uncertainties in future relied upon the valuation of unencumberedfixed assets the value of current assets and projected future earnings from the businessactivities of BFL. b) Note ‘25 B' to the standalone Ind AS Financial Statementsrelating to exposure aggregating Rs. 123.97 crores as at March 31 2018 (Rs. 113.54 croresas at March 31 2017) in respect of road construction activity the claims for which arebeing processed at various appellate fora and our reliance on the management's expectationbacked by its legal opinion of its realisability of balances over a period of next 2 to 3years. Our opinion is not modified in respect of these matter.

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 01 2016 included in thesestandalone Ind AS Financial Statements are based on the previously issued statutoryfinancial statements for the year ended March 31 2017 and March 31 2016 prepared inaccordance with the Companies (Accounting Standards) Rules 2006 (as amended) which wereaudited by us on which we expressed an unmodified audit opinion dated May 24 2017 andMay 23 2016 respectively. The adjustments to those financial statements for thedifferences in the accounting principles adopted by the Company on transition to Ind AShave been audited by us.

Our opinion is not modified in respect of this matter.

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;

c. 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;

d. 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 thereunder;

e. 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) oftheAct;

f. 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".

g. 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 ‘37' onContingent Liabilities to the standalone Ind AS Financial Statements;

(ii) The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts; and

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

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 MukandLimited on the standalone Ind AS Financial Statements for the year ended March 31 2018](i) (a) The Company has maintained the fixed asset register showing quantitative detailsand situation of fixed updating the same for accumulated depreciation and net block of theassets.

(b) During the year all the fixed assets have not been physically verified by themanagement. However there is a regular programme of verification which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. Asinformed no material discrepancies were noticed on such verification.

(c) The title deeds of immovable properties recorded as fixed assets in the books ofaccount of the Company are held in the name of the Company. (ii) The inventory (excludingstocks lying with third parties) has been physically verified by the management during theyear. In respect of stock lying with third parties these have been substantially beenconfirmed by them. In our opinion the frequency of verification is reasonable. Asinformed no material discrepancies were noticed on physical verification carried outduring the year.

(iii) As informed during the current year the Company has not granted any loanssecured or unsecured to companies firms Limited Liability Partnerships or other partiescovered in the register maintained under Section 189 of the Act. Accordingly paragraph 3(iii)(a) 3 (iii)(b) and 3 (iii)(c) of the Order are not applicable to the Company.

(iv) Based on information and explanation given to us in respect of loans investmentsguarantees and securities the Company has complied with the provisions of Section 185 and186 of the Act.

(v) In our opinion and according to the information and explanations given to us theCompany has complied with the directives issued by Reserve Bank of India and theprovisions of Sections 73 to 76 of the Act and the rules framed there under with regard tothe acceptance of deposits. Further as informed no Order has been passed by the CompanyLaw Board or National Company Law Tribunal or Reserve Bank of India or any Court or anyother Tribunal on the Company in respect of the aforesaid deposits.

(vi) We have broadly reviewed the books of account maintained by the Company in respectof products where the maintenance of cost records has been specified by the CentralGovernment under sub-section (1) of Section 148 of the Act and the rules framed thereunder and we are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained.

(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 have beenslight delays in payment of tax deducted at source value added tax central sales taxentry tax and profession tax which have not been serious.

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:

Name of the statute Nature of dues Amount (Rs. In crores) Period to which the amount relates Forum where dispute is pending Remarks
Income Tax Act Income Tax 0.682 1992-93 High Court
Income Tax Act Income Tax 0.594 1996-97 Assessing Officer
Income Tax Act Income Tax 0.313 1997-98 High Court
Income Tax Act Income Tax 0.640 1998-99 High Court
Wealth Tax Act Wealth Tax 0.352 1998-99 High Court
Trade Tax and Entry Tax UP Trade Tax and Entry Tax 0.074* 2001-02 High Court
Trade Tax UP Trade Tax 0.30* 2002-03 2003-04 High Court
Entry Tax Entry Tax 0.109 2002-03 Additional Commissioner
(Appeals)
Sales Tax Local Sales Tax Central Sales Tax 0.018 1988-89 1989-90 Tribunal
Sales Tax Local Sales Tax Central Sales Tax 0.021 1989-90 1990-91 1991-92 1996-97 1998-99 Deputy Commissioner Appeals
Sales Tax Local Sales Tax Central Sales Tax 0.033 2012-13 Additional Commissioner (Appeals)

* Net of amount deposited i.e. demand has been paid under protest.

(viii) According to the information and explanations given to us the Company has notdefaulted in repayment of loans or borrowings to financial institutions and banks. TheCompany has not taken any loan from government(s) nor have issued any debentures.

(ix) In our opinion and according to the information and explanations given to us theCompany has not raised any money by way of initial public issue offer / further publicoffer (including debt instruments) during the year. The Company has utilized the moneyraised by way of term loans during the year for the purposes for which they were raised.

(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 managerialremuneration has been paid / provided in accordance with the requisite approvals mandatedby the provisions 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 Section 177and Section 188 of Act where applicable and the details have been disclosed in the Ind ASFinancial Statements 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.

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 MukandLimited on the standalone Ind AS Financial Statements for the year ended March 31 2018]

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of MukandLimited ("the Company") as of March 31 2018 in conjunction with our audit ofthe standalone Ind AS financial statements of the Company for the year ended on 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 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 CompaniesAct 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 financialcontrols 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 financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit 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 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.

For Haribhakti & Co. LLP

Chartered Accountants

ICAI Firm Registration No.103523W / W100048

Sumant Sakhardande

Partner

Membership No.034828

Place: Mumbai

Date : May 29 2018