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Mukta Arts Ltd.

BSE: 532357 Sector: Media
NSE: MUKTAARTS ISIN Code: INE374B01019
BSE 00:00 | 14 Jan 46.00 1.15
(2.56%)
OPEN

45.35

HIGH

46.50

LOW

44.70

NSE 00:00 | 14 Jan 46.30 1.50
(3.35%)
OPEN

45.45

HIGH

46.80

LOW

44.80

OPEN 45.35
PREVIOUS CLOSE 44.85
VOLUME 3614
52-Week high 65.35
52-Week low 25.60
P/E 21.30
Mkt Cap.(Rs cr) 104
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 45.35
CLOSE 44.85
VOLUME 3614
52-Week high 65.35
52-Week low 25.60
P/E 21.30
Mkt Cap.(Rs cr) 104
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Mukta Arts Ltd. (MUKTAARTS) - Auditors Report

Company auditors report

To the Members of Mukta Arts Limited

Report on audit of the Standalone Indian Accounting Standard (Ind AS)Financial Statements Qualified Opinion

We have audited the accompanying Standalone Ind AS financial statementsof Mukta Arts Limited ("the Company") which comprise the StandaloneBalance Sheet as at March 31 2020 and the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Changes in Equity and statement of cash flows forthe year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information (hereinafter referred toas ‘the standalone financial statements').

In our opinion and to the best of our information and according to theexplanations given to us except for the possible effects of the matters described in theBasis of Qualified Opinion paragraph below the aforesaid Standalone financial statementsgive the information required by the Companies Act 2013 (‘the Act') in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2020 its profit (including other comprehensive income) the changes in equityand its cash flows for the year ended on that date.

Basis of Qualified Opinion

As at March 31 2020 the company's investment in itssubsidiary (including deemed investment) Whistling woods International Limited (WWIL) ajoint venture between the company and Maharashtra Film Stage and Cultural DevelopmentCorporation Limited (MFSCDCL) aggregates to Rs. 199511218/- and loans and advancesdeposits interest receivable and rent receivable aggregate to Rs. 410703570/-recoverable from WWIL. As fully explained in Note 43 to the accompanying auditedfinancial statements the Order of February 9 2012 passed by the High Court of judicatureat Bombay (‘High Court') had quashed the joint Venture Agreement(‘JVA') between the company and Maharashtra Film Stage Cultural DevelopmentCorporation (‘MFSCDCL'). Maharashtra Film Stage and Cultural DevelopmentCorporation (‘MFSCDC') raised net demand of Rs. 591966210/- and asked WWIL tovacate the premises. WWIL's petition for special leave to appeal filed with theSupreme Court of India had also been dismissed. The Company and WWIL had filed applicationto review the said order with the High Court and an Interim stay was granted on July 302014 which required deposit of Rs.100038000/- by January 2015 against payment ofarrears of rent for the year 2000-01 to 2013-14 and payment of Rs.4500000/- per annumfrom Financial Year 2014-15 till the settlement of the case to MFSCDCL. As per theterms of the said Order till financial year 2016-17 Rs. 113538000/- has been paid bythe Parent Company and for financial year 2017-18 to 2019-20 Rs. 4500000/- per annum hasbeen paid by WWIL. The State Govt. of Maharashtra and MFSCDCL challenged the order of theHigh Court in the Supreme Court which was dismissed by the Supreme Court on September 222014. The amount so paid /being paid by the Company have been accounted under Non -Current Other Financial Assets in the Standalone Financial Statements to be adjusted onthe settlement of the case. Management of WWIL informs that these will be accounted as anexpense if required on the settlement of the case.

Additionally without giving effect to the matter as stated aboveWWIL's net worth stands fully eroded as at March 31 2020. Management of WWILbelieves that it is appropriate to prepare the Ind AS financial statements on a goingconcern basis based on its assessment of the merits of the case plans for the future andsupport provided by its holding company.

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Companies Act 2013. Our responsibilitiesunder those Standards are further described in the Auditor's Responsibilities for theAudit of the Ind AS Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India together with the ethical requirements that are relevant to our auditof the financial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our qualified opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Ind AS financial statements of the currentperiod. These matters were addressed in the context of our audit of the Ind AS financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

We have determined that there are no key audit matters to communicatein our report for the year ended 31 March 2020.

Responsibilities of Management for the Standalone Ind AS FinancialStatements

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financialperformance (changes in equity)5 and cash flows of the Company in accordance with6 theaccounting principles generally

accepted in India including the accounting Standards specified undersection 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statement that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the 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 foroverseeing the company's financial reporting process.

Auditor's Responsibilities for the Audit of the Ind AS FinancialStatements

Our objectives are to obtain reasonable assurance about whether theStandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Ind AS financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of theStandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Companies Act 2013 we are also responsible for expressing ouropinion on whether the company has adequate internal financial controls system in placeand the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the Ind AS financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of theInd AS financial statements including the disclosures and whether the Ind AS financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the Ind ASfinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

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 sub-section(11) of section 143 of the Act we give in the Annexure A a statement on thematters specified in paragraphs 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 explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books.

(c) The Standalone Balance Sheet Standalone Statement of Profit andLoss including the Statement of Other Comprehensive Income the Standalone Cash FlowStatement and the Standalone Statement of Changes in Equity dealt with by this Report arein agreement with the books of account;

(d) In our opinion the aforesaid Ind AS financial statements complywith the Indian Accounting Standards specified under Section 133 of the Act;

(e) On the basis of the written representations received from thedirectors as on March 31 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on March 312020 from being appointed as a director in termsof Section 164 (2) of the Act.

(f) With respect to the adequacy of the Internal Financial Controlsover Financial Reporting of the Company and the operating effectiveness of such controlsrefer to our separate report in Annexure B and

(g) In our opinion the managerial remuneration for the year endedMarch 31 2020 has been paid/provided by the Company to its directors in accordance withthe provisions of section 197 read with Schedule V to the Act;

(h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations as atMarch 312020 on its financial position in its standalone Ind AS financial statements -Refer Notes No. 39 to the standalone financial statements.

ii. The Company does not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses - Refer Note No.44 to the standalone financial statements.

iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company during the year ended March 31 2020- Refer Note No. 45 to the standalone financial statements.

For Uttam Abuwala Ghosh & Associates
Chartered Accountants
Firm No. 111184W
CA. Prerak Agarwal
(Partner)
Membership No. 158844
UDIN: 20158844AAAABG9913
Date: June 29 2020
Place: Mumbai

Annexure A referred to in Report on Other Legal and RegulatoryRequirements Paragraph of Independent Auditor's report of even date to the members ofMukta Arts Limited on the accounts for the year ended March 312020

On the basis of such checks as we considered appropriate and accordingto the information and explanation given to us during the course of our audit we reportthat:

i) (a) The company has maintained proper records showing fullparticulars including quantitative details and situation

of Property Plant & Equipment except that tagging of certain fixedassets is yet to be completed.

(b) As explained by the Management fixed assets have been physicallyverified by the management at regular intervals which in our opinion is reasonable havingregard to the size of the company and nature of its business. In our opinion there wereno material discrepancies between book records and physical fixed assets that were noticedduring the period.

(c) According to the information and explanation given to us and on thebasis of our examination of the records of the company the title deeds of immovableproperties included in property plant and equipment are held in the name of the company.

ii) As explained by the Management Company does not have anyinventory. Accordingly paragraph 3(ii) of the Order is not applicable to the Company.

iii) According to the information and explanations given to us thecompany has not granted any loans secured or unsecured to the firms limited liabilitypartnerships or other parties covered in the register maintained under section 189 of theAct. the provisions of paragraph 3(iii) (a) (b) and (c) of the Order are not applicableto the Company.

iv) In our opinion and according to the information andexplanations given to us the Company has complied with the

provisions of Section 185 and 186 of the Act with respect to the loansand investments made.

v) In our opinion and according to the information and explanationgiven to us the Company has not accepted any deposit from public within the provision ofsection 73 to 76 and other relevant provisions of the Companies Act 2013 and the rulesframed there under.

vi) As informed to us by management the Central Government has notprescribed the maintenance of cost records under sub section (1) of section 148 of theCompanies Act 2013 for any of services rendered by the company.

vii) (a) According to information and explanations given to us andon the basis of our examination of the books of

account and records the Company has been generally regular indepositing undisputed statutory dues including Goods and Services Tax (‘GST') and anyother statutory dues with the appropriate authorities except that there have been fewdelay in depositing dues pertaining to Income Tax.

According to information and explanations given to us there are noundisputed statutory dues payable in respect of Provident Fund Employees' StateInsurance Income Tax Value Added Tax GST and other material statutory dues were inarrears as on March 31 2020 for a period of more than 6 months from the date they becamepayable.

(b) According to the information and explanations given to us thereare no dues payable in respect of value added tax GST customs duty and excise duty whichhave not been deposited with appropriate authorities on account of any disputes. Thefollowing dues of Service Tax & Income Tax have not been deposited by the company onaccount of dispute:

Name of the statute Nature of dues Amount (Rs.) Period to which the amount relates Forum where the dispute is pending
Chapter V of the Finance Act 1994 Service Tax 875000/-* November 1996 - November 2001

Customs Excise & Service Tax Appelate Tribunal

Service Tax 6798000/- September 2014 to March 2015
Income Tax Act 1961

Income Tax

1953900/- Asst year 2015-16

Commissioner of Income Tax (Appeals)

15577380/- Asst year 2014-15
8808700/- Asst Year 2013-14
1508440/- Asst Year 2012-13
524938/- Asst year 2011-12 Income Tax Appellate Tribunal (Appeals)

*Excludes Amount deposited under protest Rs. 800000/-

viii) On the basis of verification of records and according to theinformation and explanations given to us and based on the records made available to usthe Company has not defaulted in repayment of any loans from Financial Institutions orfrom the Bank and has not issued Debentures.

ix) On the basis of verification of records and according to theinformation and explanations given to us and based on the records made available to usthe company has utilized the money raised by way of Term loan for the purpose for whichthey were raised. The Company did not raise any moneys by way of public issue/ follow-onoffer including debt instruments.

x) Based upon the audit procedures performed and the informationand explanations given to us we report that no fraud by the Company or any fraud on thecompany by its officers or employees has been noticed or reported during the year.

xi) According to the information and explanations given to us andbased on the examinations of the records of the company the managerial remuneration hasbeen paid/ provided in accordance with the requisite approvals mandated by the provisionsof section 197 read with Schedule V to the Companies Act 2013.

xii) In our opinion the company is not a Nidhi Company.Accordingly the provisions of clause (xii) of Para 3 of the order are not applicable tothe company.

xiii) According to the information and explanations given to usall transactions with the related parties are in compliance with Section 188 and 177 ofCompanies Act 2013 and the details of such transactions have been disclosed in theFinancial Statements as required by the accounting standards and Companies Act 2013.

xiv) On the basis of verification of records and according to theinformation and explanations given to us and based on the records made available to usthe company has not made any preferential allotment / private placement of shares or fullyor partly convertible debentures during the year under review.

xv) In our opinion and according to the information andexplanations given to us the company has not entered into non-cash

transactions with directors or persons connected with him.

xvi) The company is not required to be registered under section 45IA of the Reserve Bank of lndia Act 1934.

For Uttam Abuwala Ghosh & Associates
Chartered Accountants
Firm No. 111184W
CA. Prerak Agarwal
(Partner)
Membership No. 158844
UDIN: 20158844AAAABG9913
Date: June 29 2020
Place: Mumbai

Annexure B to the Independent Auditor's Report of even date on theStandalone Financial Statements of Mukta Arts Limited

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

(Referred to in paragraph 1(A)(f) under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date)

We have audited the internal financial controls over financialreporting of Mukta Arts Limited ("the Company") for the year ended onMarch 312020 in conjunction with our audit of the standalone Ind AS financial statementsof the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India. 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 the Company's policies the safeguardingof its 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.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by theInstitute of Chartered Accountants of India and specified under sub-section 10 of Section143 of the Companies Act to the extent applicable to an audit of internal financialcontrols both applicable to an audit of Internal Financial Controls and both issued bythe Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting 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 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 financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting 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 overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects adequateinternal financial controls with reference to standalone financial statements and suchinternal financial controls were operating effectively as at 31 March 2020 based on theinternal financial controls with reference to standalone financial statements 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.

For Uttam Abuwala Ghosh & Associates
Chartered Accountants
Firm No. 111184W
CA. Prerak Agarwal
(Partner)
Membership No. 158844
UDIN: 20158844AAAABG9913
Date: June 29 2020
Place: Mumbai

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