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MVL Ltd.

BSE: 532991 Sector: Infrastructure
NSE: MVL ISIN Code: INE744I01034
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VOLUME 5617
52-Week high 0.57
52-Week low 0.26
P/E
Mkt Cap.(Rs cr) 16
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 0.27
CLOSE 0.27
VOLUME 5617
52-Week high 0.57
52-Week low 0.26
P/E
Mkt Cap.(Rs cr) 16
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

MVL Ltd. (MVL) - Auditors Report

Company auditors report

TO THE MEMBERS OF MVL LTD

1. Report on the Financial Statements

We have audited the accompanying financial statements of MVL Limited (‘theCompany') which comprise the Balance Sheet as at March 31 2017 and the Statement ofProfit and Loss and the Cash Flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information.

2. Management's responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act 2013 ( "the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the Accountingprinciples generally accepted in India including the accounting standards specified undersection 133 of the act read with rule 7 of the companies (Accounts) Rules 2014. Thisresponsibility also includes the maintenance of adequate accounting records in accordancewith the provisions of the act for safeguarding the assets of the company and forpreventing and detecting the frauds and other irregularities; selection and application ofappropriate accounting policies; making judgment and estimates that are reasonable andprudent; and design implementation and maintenance of internal financial control thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

3. Auditors Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

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 there under.

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 financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal control relevant to the Company's preparation of the financialstatements that give true and fair view in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made bycompany's directors as well as evaluating the overall presentation of the financialstatements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

4. Basis for Qualified Opinion

Reference is invited to

a) Note No. 39 in respect of non provision of interest with retrospective effect from01.04.2014 (vide Board Resolution dated 17.02.2015) on loans from banks and financialinstitutions declared as Non Performing Account (NPA). As a result of non provision ofsaid interest of Rs.474140387/- payable during the year on the said NPA Accounts : -

Revenue from operation has been understated by Rs.286810889/- (previousyear Rs.189909679/-) arising out of percentage of completion (POC) method ofaccounting due to non-capitalization of interest directly attributable to projectwork-in-progress.

Loss from operation has been understated by Rs. 187329498 (previous yearRs.219775894/-)

b) Note No. 40 regarding non provision of advances to group companies considereddoubtful of recovery and non provision of interest on one of the advance. The loneecompanies do not have the capacity / net-worth to repay the principal / or the interestcharged thereon.

5. Qualified Opinion

In our opinion and to the best of our information and according to the explanationgiven to us except for possible effects of the matters described in paragraph 4 above -the basis of qualified opinion the financial statements give a true and fair view :-

a) In the case of the Balance sheet of the state of affairs of the company as at 31stMarch 2017; b) In the case of statement of Profit and Loss of the loss for the year endingon 31st March 2017. c) In the case of the Cash Flow Statement of the Cashflow for the year ending on 31st March 2017.

6. Emphasis matters

Attention is invited to:-

a) Note No. 49 of the accompanying financial statements there exists materialuncertainty over the realisability of certain loans and advances claimed as given/advancedfor purchase/acquisition of land rights projects or properties which are pending eitherfor transfer of property or refund of advances aggregating Rs. 1469.70 Lacs as on31.3.2017 (previous year Rs. 6817.72 lacs). Out of these advances we are unable toascertain whether the outstanding advances are fully recoverable/adjustable since thesame are outstanding/remained unadjusted for long. In the absence of some of confirmationsand valid supporting agreements we are unable to ascertain the impact if any that mayarise on any future date in case any of these advances are subsequently determined to bedoubtful for recovery.

b) Note No. 50 in respect of purchase of commercial space and included as part ofinventory/ WIP of the value of Rs.9218.77 (previous year Rs. 3886.02 Lacs). In view ofnon- registration of title of the said property in the name of the company we are unableto comment about the authenticity of the title of the said real estate properties.

c) Note No. 37 in respect of non availability of confirmations in respect of somedebit and/or credit balances. In the absence of such confirmations any provision to bemade for the adverse variation in carrying amounts of these balances are not quantifiedas well as the quantum of adjustment if any required to be made remain unascertained.

Our opinion is not qualified in respect of these matters.

7. 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 subsection 11 of section 143 of theAct We give in the annexure ‘A' statement on the matter specified in paragraphs 3& 4 of the order.

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 purpose of our audit; b) In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books;

c) The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this report are in agreement with the books of account;

d) In our opinion the Balance Sheet Statement of Profit and Loss and Cash FlowStatement comply with the Accounting Standards referred to in section 133 of the CompaniesAct 2013 read with rule 7 of the Companies (Accounts) Rules 2014.

e) On the basis of written representations received from the directors as on March 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of sub section (2) ofsection 164 of the Companies Act 2013.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in ‘Annexure B' and.

g) With respect to the other matters included in the auditor's report and to best ofour information and according to the explanation given to us.

1) The company has disclosed the impact of pending litigation on its financial positionin its financial statement.

2) 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.

3) There has been no delay in transferring amounts required to be transferred to theinvestor's education and protection fund by the company.

4) The Company has provided requisite disclosures in Note No. 37 to FinancialStatements as to the holding of Specified Bank Notes on November 8 2016 and December 302016 as well as dealings in Specified Bank Notes during the period from November 8 2016to December 30 2016. Based on our audit procedures and relying on the managementrepresentation regarding the holding and nature of cash transactions including SpecifiedBank Notes we report that these disclosures are in accordance with the books of accountmaintained by the Company and as produced to us by the Management.

For ARUN KISHORE & COMPANY
CHARTERED ACCOUNTANTS
( ICAI FRN : 001898 N)
Sd/-
Place : New Delhi CA ARUN KISHORE
Date : 8th June 2017 PARTNER
[Membership No. 10770]

Annexure ‘A' to the Independent Auditors' Report

The Annexure referred to in paragraph 1 under "Report on Other Legal andRegulatory requirements" section of our report of even date

(i) In Respect of its Fixed Assets:

a) The company is maintaining records showing particulars including quantitativedetails and situation of fixed assets;

b) Major items of fixed assets were physically verified during the year by themanagement in accordance with a regular program of verification which in our opinionprovides for physical verification of the fixed assets at reasonable intervals.

No material discrepancies were noticed on such verification. c) The title deeds ofimmovable properties are held in the name of the company.

(ii) In Respect of its inventory:

a) The inventory includes land material at site and project work in progress which isinclusive of other direct and indirect costs. As explained to us inventories of buildingmaterials are physically verified by the management at reasonable intervals.

b) In our opinion and according to the information and explanations given to us theprocedure of physical verification of inventories followed by the management wasreasonable and adequate in relation to the size of the company and the nature of itsbusiness.

c) In our opinion and according to the information and explanations given to us thecompany has maintained proper records of its inventories of building material. No materialdiscrepancies were noticed on verification between physical stocks and book records.

(iii) In respect of unsecured loans granted to the companies firms or other partiescovered in the registrar maintained u/s 189 of the Companies Act 2013 according to theexplanation and information given to us;.

a) The company has granted loans to their group companies as at the year end theoutstanding balance of such loan was Rs.2726.34 Lacs and the maximum outstanding at anytime during the year was Rs. 2726.34 Lacs. In our opinion loans to their group companiesare prima facie prejudicial to the interest of the company.

b) No interest is charged on loan of Rs.64.50 Lacs to one of the group company.

c) Since the loan is repayable on demand and there is no stipulation for repaymentregularity of payments cannot be commented upon.

d) As per the information and explanation given to us the company has not taken anyloans secured or unsecured from companies firms or other parties covered in the registermaintained under section 189 of the Companies Act 2013.

e) Since the company has not taken any loans secured or unsecured provisions of clause4 (iii) (e) (f) & (g) of the company (Auditors Report) Order 2016 are not applicable.

(iv) According to information and explanations given to us a) The provision of section185 are not applicable since the company has not advanced any loan to directors b) Loanand advance / guarantee provided to related parties are detailed under note no. 46 arenot in conformity with sub clause 5 of section 186 of Companies Act 2013.

(v) According to information and explanations given to us the company has not acceptedany deposits during the year.

(vi) According to the information and explanations given to us the Central Governmenthas not prescribed maintenance of cost records under sub-section (1) of section 148 of theCompanies Act'2013.

(vii) (a) According to the information and explanations given to us undisputed amountsin respect of dues including provident fund investor education and protection fundemployee state insurance income tax sales tax wealth tax service tax custom dutyexcise duty cess and any other material statutory dues as applicable which wereoutstanding as at 31st March 2017 for a period of more than 6 months from the date theybecame payable are Rs. 312.85 Lacs (Previous year Rs. 260.04 Lacs) as the balance sheetdate.

(b) According to the information and explanations given to us following dues have notbeen admitted payable on account of disputes /appeals pending with appropriateauthorities:-

S. No. Name of the statute Period Amount under dispute (Rs. in Lacs) Forum where dispute is pending
1. Income Tax A.Y. 2013-14 41.47 Lacs CIT (Appeals) New Delhi
2. Income Tax A.Y. 2014-15 73.60 Lacs CIT (Appeals) New Delhi
3. Service Tax Upto 31.03.2015 589.39 Lacs* CSTAT New Delhi
Total 704.46 Lacs

*The above figures are exclusive of interest if any payable thereon

(c) Based on the information and explanations obtained the company has no liability orrequirement to transfer any amount to Investor Education & Protection Fund inaccordance with the relevant provisions of the Act and the Rules there-under.

(viii) The company has not defaulted in repayment of loans or borrowing to a financialinstitution bank Government or dues to debenture holders.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) and term loans during the year.

(x) We have not noticed or reported any fraud by the company or any fraud on theCompany by its officers or employees during the year

(xi) The managerial remuneration has been paid or provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theCompanies Act.

(xii) As this is not a nidhi company the provision in respect thereof are notapplicable

(xiii) According to the information and explanations given to us all transactions withthe related parties are in compliance with sections 177 and 188 of Companies Act 2013where ever applicable and the details have been disclosed in the Financial Statementsetc. as required by the applicable accounting standards

(xiv) According to the information and explanations given to us the company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review.

(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 andthe provisions of section 192 of Companies Act 2013 have been complied with;

(xvi) This clause of the Caro 2016 is not applicable to the Company as the company isnot a required to be registered under section 45-IA of the Reserve Bank of India Act1934.

For ARUN KISHORE & COMPANY
CHARTERED ACCOUNTANTS
( ICAI FRN : 001898 N)
Sd/-
CA ARUN KISHORE
Place : New Delhi PARTNER
Date : 8th June 2017 [Membership No. 10770]

ANNEXURE ‘B' TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIALSTATEMENTS OF MVL LIMITED

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 MVL Limited("the Company") as of March 31 2017 in conjunction with our audit of thefinancial 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 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 issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. 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 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 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. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for my /our audit opinion on the Company's internal financial controls system overfinancial 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

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 2017 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 ARUN KISHORE & COMPANY
CHARTERED ACCOUNTANTS
( ICAI FRN : 001898 N)
Sd/-
CA ARUN KISHORE
Place : New Delhi PARTNER
Date : 8th June 2017 [Membership No. 10770]