To the Members of
Multibase India Limited
Report on the Audit of the Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of Multibase India Limited("the Company") which comprise the Balance Sheet as at 31 March 2018 theStatement of Profit and Loss (including other comprehensive income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year then ended and summary ofthe significant accounting policies and other explanatory information (herein afterreferred to as Ind AS financial statement').
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 Ind AS financial statements that give a true and fair view of the state of affairsprofit (including other comprehensive income) changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) prescribed under section 133 of theAct.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
Our responsibility is to express an opinion on these Ind AS financial statements basedon 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 of the Ind ASfinancial statements in accordance with the Standards on Auditing specified under Section143(10) of the Act. Those Standards require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the Ind ASfinancial statements are free from material misstatement. An audit involves performingprocedures to obtain audit evidence about the amounts and the disclosures in the Ind ASfinancial statements. The procedures selected depend on the auditor's judgment includingthe assessment of the risks of material misstatement of the Ind AS financial statementswhether due to fraud or error. In making those risk assessments the auditor considersinternal financial control relevant to the Company's preparation of the Ind AS financialstatements that give a true and fair view in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofthe accounting policies used and the reasonableness of the accounting estimates made bythe Company's Directors as well as evaluating the overall presentation of the Ind ASfinancial statements.
We are also responsible to conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the entity's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in the auditor's report tothe related disclosures in the financial statements or if such disclosures areinadequate to modify the opinion. Our conclusions are based on the audit evidenceobtained up to the date of the auditor's report. However future events or conditions maycause an entity to cease to continue as a going concern.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31 March 2018 its profit (including other comprehensive income) changes in equityand its cash flows for the year ended on that date.
The financial statements of the Company for the year ended 31 March 2017 were auditedby Deloitte Haskins & Sells who expressed an unmodified opinion on those standalonefinancial statements on 22 May 2017.
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 in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
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 the Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account.
(d) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards prescribed under section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31March 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2018 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".
(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:
ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT 31 MARCH 2018
With reference to the Annexure A referred to in the Independent Auditor's Report to themembers of the Company on the Ind AS financial statements for the year ended 31 March2018 we report the following:
i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(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 in respect of products manufactured by theCompany and are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained. However we have not made a detailed examination of cost recordswith a view to determine whether they are accurate or complete.
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 Professional tax Income-tax Sales-tax Service tax Duty of Customs Duty ofExcise Goods and Service tax Value added tax and other material statutory dues havebeen generally regularly deposited during the year by the Company with the appropriateauthorities.
According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Professional taxIncome-tax Sales-tax Service-tax Duty of Customs Duty of Excise Goods and Servicetax Value added tax and other material statutory dues were in arrears as at 31 March 2018for a period of more than six months from 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 Excise duty Duty of Customs Labourcess and Sales tax which have not been deposited with the appropriate authorities onaccount 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 Involved (Rs) ||Amount (Rs) ||Period to which the amount relates ||Forum where dispute is pending ||Date of payment |
|The Income ||Income tax ||3415284 ||673307 ||2005 2006 ||Income Tax ||Not yet paid |
|Tax Act 1961 || || || || ||Appellate Tribunal || |
|The Income ||Income tax ||2885306 ||79713 ||2006 2007 ||Income Tax ||Not yet paid |
|Tax Act 1961 || || || || ||Appellate Tribunal || |
viii. In our opinion and according to the information and explanations given to us theCompany did not have any outstanding dues to its bankers financial institutionsgovernment and to any debenture holders during the year. Accordingly paragraph 3 (viii)of the Order is not applicable to the Company.
ix. According to the information and explanations given to us and based on ourexamination of records of the Company the Company has not raised any moneys by way ofinitial public offer or further public offer (including debt instruments) and the termloans during the year. Accordingly paragraph 3 (ix) of the Order is not applicable to theCompany.
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 andaccording to the information and explanations given to us the Company is not a Nidhicompany. Accordingly paragraph 3 (xii) of the Order is not applicable. xiii. According tothe information and explanations given to us all transactions with the related partiesare in compliance with section 177 and 188 of Act and the details have been disclosed inthe Financial Statements as required by the applicable accounting 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 givento us the Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly paragraph 3 (xvi) of the Order is not applicable.
ANNEXURE B TO THE INDEPENDENT AUDITORS' REPORT 31 MARCH 2018
Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of MultibaseIndia Limited ("the Company") as of 31 March 2018 in conjunction with our auditof the standalone Ind AS financial statements of the Company for the year ended on thatdate.
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 FinancialReporting issued by the Institute of Chartered Accountants of India" (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013 (the Act').
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 issued by the ICAI anddeemed to be prescribed under Section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both issued by the Institute ofChartered Accountants of India. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting 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 system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing 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 financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of 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.
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 31 March 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 Institute of CharteredAccountants of India.
| ||For BSR & Co LLP |
| ||Chartered Accountants |
| ||Firm's Registration No: 101248W/W-100022 |
| ||Vikas R Kasat |
|Mumbai ||Partner |
|24th May 2018 ||Membership No: 105317 |