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Multibase India Ltd.

BSE: 526169 Sector: Industrials
NSE: N.A. ISIN Code: INE678F01014
BSE 00:00 | 05 Jun 126.40 18.40
(17.04%)
OPEN

108.00

HIGH

129.60

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108.00

NSE 05:30 | 01 Jan Multibase India Ltd
OPEN 108.00
PREVIOUS CLOSE 108.00
VOLUME 46596
52-Week high 279.90
52-Week low 70.00
P/E 16.97
Mkt Cap.(Rs cr) 160
Buy Price 120.10
Buy Qty 10.00
Sell Price 126.40
Sell Qty 268.00
OPEN 108.00
CLOSE 108.00
VOLUME 46596
52-Week high 279.90
52-Week low 70.00
P/E 16.97
Mkt Cap.(Rs cr) 160
Buy Price 120.10
Buy Qty 10.00
Sell Price 126.40
Sell Qty 268.00

Multibase India Ltd. (MULTIBASEINDIA) - Auditors Report

Company auditors report

To the Members of Multibase India Limited

Report on the Audit of the Financial Statements Opinion

We have audited the financial statements of Multibase India Limited ("theCompany") which comprise the balance sheet as at 31 March 2019 and the statement ofprofit and loss (including other comprehensive income) statement of changes in equity andstatement of cash flows for the year then ended and notes to the financial statementsincluding a summary of the significant accounting policies and other explanatoryinformation.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("Act") in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2019 and profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Description of Key Audit Matter

Revenue Recognition

See note 2.6 (k) to the financial statements

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

The key audit matter How the matter was addressed in our audit
Revenue is measured based on transaction price which is the consideration adjusted for rebates discounts and estimated sales returns. As disclosed in Note 2.6 to the financial statements revenue is recognized upon transfer of control of promised goods to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those goods. Our audit procedures included following:
• Assessing the appropriateness of the policies in respect of revenue recognition by comparing with applicable accounting standards;
We have identified recognition of revenue as a key audit matter as revenue is a key performance indicator and there is a risk of revenue being fraudulently overstated arising from pressure to achieve performance targets as well as meeting external expectations. • Evaluating the design testing the implementation and operating effectiveness of the Company's internal controls over recognition of revenue and measurement of discounts and schemes in the system.
• Performing substantive testing (including year-end cutoff testing) by selecting samples of revenue transactions recorded during and after the year and verifying the underlying documents which included sales invoices/ contracts and dispatch/shipping documents. Obtaining and assessing appropriateness of positions for returns and incentives.
• Testing controls over review of contracts and revenue recognition.
Assessing manual journals posted to revenue to identify unusual items not already covered by us.

Other Information

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Management’s Responsibility for the Financial Statements

The Company's management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these financial statementsthat give a true and fair view of the state of affairs profit and other comprehensiveincome changes in equity and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)specified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

In preparing the financial statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company's financial reportingprocess.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• 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 companyhas adequate internal financial controls with reference to financial statements in placeand the 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 the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions 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 financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves 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 s financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditors' report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

(A) 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 (including other comprehensiveincome) the statement of changes in equity and the statement of cash flows dealt with bythis Report are in agreement with the books of account

d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder section 133 of the Act

e) On the basis of the written representations received from the directors as on 31March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2019 from being appointed as a director in terms of Section164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors' 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 as at 31 March 2019 onits financial position in its financial statements - Refer Note 38 to the financialstatements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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

iv. The disclosures in the financial statements regarding holdings as well as dealingsin specified bank notes during the period from 8 November 2016 to 30 December 2016 havenot been made in these financial statements since they do not pertain to the financialyear ended 31 March 2019.

(C) With respect to the matter to be included in the Auditors' Report under section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

For B S R & Co LLP
Chartered Accountants
Firm registration number:101248W/W-100022
Farhad Bamji
Place: Mumbai Partner
Date: 29th May 2019 Membership No. 105234

ANNEXURE A TO THE INDEPENDENT AUDITORS’ REPORT - 31st MARCH 2019

(Referred to in our report of even date)

i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.

(b) The Company has made physical verification of its fixed assets during the year. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets. No material discrepancies were noticedon such verification.

(c) In our opinion and according to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties of land and buildings which are freehold are held in the name of the Company.

ii. The inventory except goods-in-transit has been physically verified by themanagement during the year. In respect of goods-in-transit subsequent goods receipt havebeen verified. The discrepancies noticed during the physical verification of inventoriesas compared to book records were not material and has been properly dealt with in thebooks of account.

iii. The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Act. Accordingly Clause iii (a) (b) (c) are not applicable.

iv. The Company has not granted any loans made investments or provided guaranteeswhich require compliance with the provisions of section 185 and 186 of the Act hencereporting under clause (iv) is not applicable.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposit from the public within the meaning of Sections 73 to76 or any other relevant provisions of the Act and the rules framed there under.Accordingly clause (v) not applicable to the Company.

vi. We have broadly reviewed the books of account maintained by the Company pursuant tothe rules prescribed by the central government for maintenance of cost records undersub-section (1) of section 148 of the Act and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However we have not made adetailed examination of cost records.

vii. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Employees' StateInsurance Income-tax Sales-tax Service tax Duty of Customs Duty of Excise Valueadded tax Goods and Service tax Cess and other material statutory dues have generallybeen regularly deposited during the year by the Company with the appropriate authorities.

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 Duty of Customs Duty of Excise Value added tax Cess and other materialstatutory dues were in arrears as at 31 March 2019 for a period of more than six monthsfrom the date they became payable.

(b) According to the information and explanations given to us there are no dues ofService tax Value added tax Goods and Service tax and Sales tax which have not beendeposited with the appropriate authorities on account of any dispute.

According to the information and explanations given to us the following dues of Incometax have not been deposited by the Company on account of disputes:

Name of the statue Nature of the dues Amount

(Rs)

Period to which the amount relates Forum where dispute is pending Date of payment
The Income Tax Act 1961 Income tax 2.55 lakhs 2016 - 2017 Income Tax Appellate Tribunal Not yet paid
Finance Act 1994 Service Tax 4.43 lakhs 2009-10 Commissioner Appeals Not yet paid
Finance Act 1994 Service Tax 1.62 lakhs 2010-11 Commissioner Appeals Not yet paid

viii. Our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of dues to banks government or to any financialinstitutions. The Company did not have any outstanding debentures during the year.

ix. According to the information and explanations given to us the Company did notraise money by way of initial public offer or further public offer (including debtinstruments). No term loans were taken during the year.

x. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

xi. According to the information and explanations given to us managerial remunerationhas been paid / provided for 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. Accordingly paragraph 3(xii) of the Order is notapplicable.

xiii. According to the information and explanations given to us all transactions withthe related parties are in compliance with section 177 and 188 of Act and the

details have been disclosed in the Financial Statements as required by the applicableaccounting standards.

xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3 (xv)of the Order is not applicable.

xvi. According to the information and explanations given to us the Company is notrequired to be registered under section 45 IA of the Reserve Bank of India Act 1934.Accordingly paragraph 3(xvi) of the Order is not applicable.

For B S R & Co LLP
Chartered Accountants
Firm registration number:101248W/W-100022
Farhad Bamji
Place: Mumbai Partner
Date: 29th May 2019 Membership No. 105234

ANNEXURE B TO THE INDEPENDENT AUDITORS’ REPORT

on the standalone financial statements of Multibase India Limited for the period ended31st March 2019.

Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013

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

Opinion

We have audited the internal financial controls with reference to financial statementsof Multibase India Limited ("the Company") as of 31 March 2019 in conjunctionwith our audit of the financial statements of the Company for the year ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 March 2019 based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over

Financial Reporting issued by the Institute of Chartered Accountants of India (the"Guidance Note").

Management’s Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. 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 (hereinafter referred to as"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 audit in accordance with the GuidanceNote and the Standards on Auditing prescribed under section 143(10) of the Act to theextent applicable to an audit of internal financial controls with reference to financialstatements. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls with reference to financial statements wereestablished and maintained and whether 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 such internal financial controlsassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

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 controls 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 controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts 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 financialstatements.

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 controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

For B S R & Co LLP
Chartered Accountants
Firm registration number:101248W/W-100022
Farhad Bamji
Place: Mumbai Partner
Date: 29th May 2019 Membership No. 105234