Home  »  Company  »  Mukand Ltd.  »  Quotes  »  Auditor Report
Enter the first few characters of Company and click 'Go'

Auditor Report of Mukand Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of Mukand Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone 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 of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls and ensuring their operating effectiveness and the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Standalone financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2015, its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to the following matter in the notes to the standalone financial statements:

(a) Note 18(b), relating to the Exposures in Vidyavihar Containers Limited (VCL), a subsidiary company, aggregating Rs. 52.13 crore (net of provisions) as at March 31,2015 [Rs. 67.13 crores (net of provisions) as at March 31,2014], where the management has, barring any significant uncertainties in future, relied upon the realizable values of financial assets of VCL to recover its Exposures.

(b) Note 18(d), relating to the Exposures in Mukand Global Finance Limited (MGFL), a subsidiary company, aggregating Rs. 26.25 crores as at March 31, 2015 (Rs 26.25 crores as at March 31, 2014), where the management has, barring any significant uncertainties in future, relied upon the projected future earnings from the business activities of MGFL.

(c) Note 18(a), relating to the Exposures in Bombay Forgings Limited (BFL) aggregating Rs.81.73 crores as at March 31,2015 (Rs. 79.90 crores as at March 31,2014), where the management has, barring any significant uncertainties in future, relied upon the valuation of unencumbered fixed assets, the value of current assets and projected future earnings from the business activities of BFL.

(d) Note 18(c), relating to the Exposures in Stainless India Limited (SIL), a associate company, aggregating Rs.7.31 crores as at March 31, 2015 (Rs 7.31 crores as at March 31, 2014), where the net worth of SIL has been fully eroded and there is no significant activities being carried out by SIL. The management has, barring any significant uncertainties in future, relied upon the valuation of land held by SIL.

(e) Note 21(b), relating to the Exposures aggregating Rs. 126.80 crores as at March 31,2015 (Rs. 134.78 crores as at March 31,2014), in respect of road construction activity and our reliance on the management''s expectation of its realisability.

Our report is not modified in respect of the above matters.

Report on Other Legal and Regulatory Requirements

(1) As required by the Companies (Auditor''s Report) Order, 2015 ("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 statement on the matters 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 explanations which to the best of 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 the Company so far as it appears from our examination of those books;

c. The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. On the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164 (2) of the Act;

f. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 20 on Contingent Liabilities;

(ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, on long-term contracts including derivative contracts;

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

[Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' in the Independent Auditor''s Report of even date to the members of Mukand Limited on the standalone financial statements for the year ended March 31, 2015]

(i) (a) The Company has maintained the fixed assets register for quantitative details and situation of fixed assets. However, it is in the process of updating the same for accumulated depreciation and net block of the fixed assets.

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

(ii) (a) The inventory (excluding stocks lying with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. As informed no material discrepancies were noticed on physical verification carried out during the year.

(iii) The Company has granted unsecured loans to two subsidiary companies covered in the register maintained under Section 189 of the Act.

(a) The loans granted are repayable on demand. As informed, the Company has not demanded repayment of any such loan and interest during the year. Thus, there has been no default on the part of the companies to whom the money has been lent.

(b) As informed to us, in respect of the aforesaid loan, there is no overdue amount of loan.

(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the Company.

(v) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by Reserve Bank of India and the provisions of Sections 73 to 76 of the Act and the rules framed there under with regard to the acceptance of deposits. Further, according to the information and explanations given to us, Order has been passed by the Company Law Board on the Company in respect of the aforesaid deposits which has been complied with by the Company.

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

(vii) (a) The Company is generally regular in depositing with appropriate authorities, undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it, however, there have been delays in payment of income tax deducted at source, excise duty, service tax and value added tax which have not been regularly deposited and there have been delays in many cases.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it, were outstanding, at the year end, for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us, the dues outstanding with respect to, income tax, sales tax, wealth tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it, on account of any dispute, are as follows:

Name Nature of dues Amount Period to Forum where of the (Rs. in which the dispute is statute crores) amount pending relates

Trade tax UP Trade Tax, 0.13 2001-02 High Court & Entry Entry Tax Tax

Sales tax Local Sales 0.02 1988-89, Tribunal Tax, Central 1989-90 Sales Tax

Sales tax Local Sales 0.02 1989-90, Deputy Tax, Central 1990-91, Commissioner Sales Tax 1991-92, - Appeals

1996-97,

1998-99

Entry Tax Entry Tax 0.11 2002-03 Commissioner (Appeals)

Trade Tax UP Trade Tax 3.30 2002-03 & Tribunal 2003-04.

(c) According to the information and explanations given to us, there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

(viii) The accumulated losses of the Company are not more than fifty percent of its net worth. Further, the Company has not incurred cash losses during the financial year covered by our audit. However, the Company has incurred cash losses in the immediately preceding financial year.

(ix) According to the information and explanations given to us, the Company has generally been regular in the repayment of dues to financial institutions, banks or debenture holders except that as at 31 March, 2015 the company was in default in repayment of its dues to banks, principal amounting to Rs. 18.04 crore and interest amounting to Rs. 9.06 Crores for a period ranging from 5 days to 55 days.

(x) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company, for loans taken by others from banks or financial institutions, are not prejudicial to the interest of the Company.

(xi) According to the information and explanations given to us, the term loans have been applied for the purpose for which the loans were obtained.

(xii) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such instance by the management.

For Haribhakti & Co. LLP Chartered Accountants ICAI Firm Registration No.103523W

Sumant Sakhardande Partner Membership No. 34828

Mumbai May 29, 2015


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fnancial statements of Mukand Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Proft and Loss and Cash Flow Statement for the year then ended and a summary of signifcant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fnancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these fnancial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fnancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the fnancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the fnancial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the fnancial statements.

We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for qualifed audit opinion.

Basis for Qualifed Opinion

As more explained in Note 18 (b) to the notes to the fnancial statements, no provision has been made with regard to the realisability of the ‘Exposures'' in Vidyavihar Containers Limited (VCL), a subsidiary company, aggregating Rs. 76.37 crore (net) as at 31March, 2013 (Rs. 76.37 crore (net) as at March 31, 2012), due to signifcant uncertainties in recovering its investment and loans which is dependent on the ultimate realization of the assets of VCL.

Qualifed Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in the Basis for Qualifed Opinion paragraph, the fnancial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

(b) in the case of the Statement of Proft and Loss, of the loss for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash fows for the year ended on that date.

Emphasis of Matter

We draw attention to:

(a) Note 18 (a) to the notes to the fnancial statements, relating to the Exposures in Bombay Forging Limited (BFL) aggregating Rs. 76.51 crore as at March 31, 2013 (Rs. 70.85 crore at March 31, 2012), where the management has, barring any signifcant uncertainties in future, relied upon the projected future earnings from the business activities of BFL.

(b) Note 18 (c) to the notes to the fnancial statements, relating to the Exposures in Stainless India Limited (SIL), an associate company, aggregating Rs. 14.11 crore as at March 31, 2013 (Rs. 40.28 crore at March 31, 2012), where the net worth of SIL has been fully eroded and there is no signifcant activities being carried out by SIL. The management has, barring any signifcant uncertainties in future, relied upon the valuation report prepared by the independent valuer for the sale of assets of SIL.

(c) Note 18 (d) to the notes to the fnancial statements, relating to the Exposures in Mukand Global Finance Limited (MGFL), a subsidiary company, aggregating Rs. 26.25 crore as at March 31, 2013 (Rs. 26.25 crore at March 31, 2012), where the management has, barring any signifcant uncertainties in future, relied upon the projected future earnings from the business activities of MGFL.

(d) Note 21 (b) to the notes to the fnancial statements, relating to the Exposures aggregating Rs. 141.68 crore as at March 31, 2013 (Rs. 183.94 crore as at March 31, 2012), in respect of road construction activity and our reliance on the management''s expectation of its realisibility.

Our opinion is not qualifed in respect of these matters.

Report on Other legal and Regulatory Requirements

1. As required by the Companies (Auditors'' Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub- section (4A) of section 227 of the Act, we give in the Annexure, a statement on the matters specifed in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit except for the matter described in the Basis for Qualifed Opinion paragraph;

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. the Balance Sheet, Statement of Proft and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. except for the possible effects of the matters described in the Basis for Qualifed Opinion, in our opinion, the Balance Sheet, Statement of Proft and Loss and Cash Flow Statement comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act;

e. on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualifed as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

ANNEXuRE TO AuDITORS'' REPORT

[Referred to in paragraph 1 under "Report on Other Legal and Regulatory Requirements" in the Independent Auditors'' Report of even date to the members of Mukand Limited on the financial statements for the year ended March 31, 2013]

(i) (a) The Company has maintained the fxed assets register for quantitative details and situation of fxed assets. However, it is in the process of updating the same for accumulated depreciation and net block of the assets.

(b) All the fxed assets have not been physically verifed by the management during the year but there is a regular programme of verifcation which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verifcation.

(c) During the year, company has transferred its coil fnished bars and wires business to a subsidiary. In our opinion and according to the information and explanation given to us, the transfer of said business has not affected the ability of the Company to continue as a going concern as the impact is not substantial.

(ii) (a) The inventory (excluding stocks with third parties) has been physically verifed by the management during the year. In respect of inventory lying with third parties, these have substantially been confrmed by them. In our opinion, the frequency of verifcation is reasonable.

(b) The procedures of physical verifcation of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verifcation carried out at the end of the year.

(iii) (a) As informed, the Company has not granted any loans, secured or unsecured to companies, frms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions stated in paragraph 4 (iii) (b), (c) and (d) of the order are not applicable.

(b) The Company has taken secured loans from companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 14.40 crore and the year- end balance of loans taken from such companies was Rs. 12.91 crore.

(c) In our opinion, the rate of interest and other terms and conditions for such loans are not, prima facie, prejudicial to the interest of the Company.

(d) In respect of the aforesaid loans, the Company was generally regular in repaying of principal amounts as stipulated and has not been regular in payment of interest.

(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fxed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct weakness in internal control system of the company.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of Rupees fve lakhs have been entered into during the fnancial year at prices which are reasonable having regard to the prevailing market prices at the relevant time, except for certain items which are of technical nature and few others where the suitable alternate sources for obtaining comparative quotations are not available.

(vi) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of Sections 58A or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the company in respect of the aforesaid deposits.

(vii) In our opinion, the Company has an internal audit system which is commensurate with the size and nature of its business. (viii) We have broadly reviewed the books of account maintained by the company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. (ix) (a) The Company is generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, wealth tax, service tax, customs duty, excise duty and other material statutory dues as applicable with the appropriate authorities except for payment of income tax deducted at source, TCS, cess, professional tax, pension fund and sales tax which have not been regularly deposited and there has been a slight delay in many cases.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, TCS, professional tax, wealth-tax, pension fund, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(x) In our opinion, the accumulated losses of the company are not more than ffty percent of its net worth. Further, the company has not incurred cash losses during the fnancial year covered by our audit, however the company has incurred cash losses in the immediately preceding fnancial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of dues to fnancial institutions, banks and debenture holders. The default towards principal being Rs. 31.59 Crore and interest being Rs. 13.25 Crore.

(xii) According to information and explanations given to us and based on document and records provided to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual beneft fund/ society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the company, for loans taken by others from banks or fnancial institutions during the year, are not prejudicial to the interest of the company.

(xvi) In our opinion, the term loans have been applied for the purpose for which the loans were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment. (

xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Act.

(xix) According to the information and explanations given to us, no debentures have been issued by the company during the year. Further, the Company has created security or charge in respect of debentures issued in earlier years.

(xx) The Company has not raised any money by way of public issue during the year.

(xxi) During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management.

For Haribhakti & Co.

Chartered Accountants

Firm Registration No.103523W

Sumant Sakhardande

Partner

Membership No. 034828

Place : Mumbai

Date : May 25, 2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of Mukand Limited ('the Company') as at March 31, 2012, the statement of Profit and Loss account and Cash Flow Statements for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, (CARO), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of 'The Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the paragraph 3 above, we report that:

i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

ii. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

iii. The balance sheet, statement of profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

iv. In our opinion, the balance sheet, statement of profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956,

v. On the basis of the written representations received from the directors, as on March 31, 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

5. Without qualifying our report, we invite attention to note no. 18 (a) of the notes to the financial statement, relating to the Exposures in Bombay Forgings Limited (BFL) aggregating to Rs. 70.85 crore as at 31 March, 2012 (Rs. 67.17 crore at 31 March, 2011), where the management has, barring any significant uncertainties in future, relied upon the projected future earnings from the business activities of BFL.

6. As more fully explained in note nos. 18 (b), 18(c), 18 (d) and 21(b) to the notes to the financial statements, no provision has been made with regard to :

a) The realisability of the 'Exposures' in Vidyavihar Containers Limited (VCL), a subsidiary company, aggregating Rs. 76.37 crore (net) as at 31 March, 2012 (Rs. 109.76 crore (net) as at 31 March, 2011), due to significant uncertainties in recovering its investment and loans which is dependent on the ultimate realization of the assets of VCL;

b) The realisability of the 'Exposures' in Stainless India Limited (SIL), an associate company, aggregating Rs. 40.28 crore (net) as at 31 March, 2012 (Rs. 39.66 crore (net) at 31 March, 2011),where the networth of SIL has been completely eroded and there is no significant activities being carried out by SIL;

c) The realisability of the 'Exposures' in Mukand Global Finance Limited (MGFL), a subsidiary Company, aggregating Rs. 26.25 crore as at 31 March, 2012 (Rs. 26.25 crore as at 31 March, 2011) where the management is in the process of disposing its investments;

d) The realisability of the claim of Rs. 113.27 crore as at 31 March,

2012 (Rs. 114.73 crore as at 31 March, 2011), from National Highway Authority of India (NHAI).

The exposure on the above Companies and the ultimate shortfall, if any, is not presently determinable.

7. In our opinion and to the best of our information and according to the explanations given to us, subject to the effects of our observation given in the paragraph 6 above, the said accounts give the information required by the Companies Act, 1956, subject to in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2012;

b) in the case of the statement of profit and loss account, of the loss for the year ended on that date; and

c) in the case of the cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE TO AUDITORS' REPORT

[REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS' REPORT OF EVEN DATE TO THE MEMBERS OF MUKAND LIMITED ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH, 2012]

(i) (a) The Company has maintained the fixed assets register for quantitative details and situation of fixed assets. However, it is in the process of updating the same for accumulated depreciation and net block of the assets.

(b) All the fixed assets have not been physically verified by the management during the year but there is a regular programme of verification to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

(c) There was no substantial disposal of fixed assets during the year.

(ii) (a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification carried out at the end of the year.

(iii) (a) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

Accordingly, clauses (iii) (b), (c) and (d) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company and hence, not reported upon.

(b) The Company has taken secured loans from a company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 15.13 crore and the year-end balance of loans taken from such company was Rs. 12.40 crore.

(c) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not, prima facie, prejudicial to the interest of the Company.

(d) In respect of the aforesaid loans, the Company is regular in repayment of principal amount as stipulated and is also regular in payment of interest.

(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the Company.

(v) (a) According to the information and explanations given to us, we Are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register under section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of Sections 58A or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the company in respect of the aforesaid deposits.

(vii) In our opinion, the Company has an internal audit system which is commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) The Company is generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities except for payment of income tax deducted at source and sales tax which have not been regularly deposited and there has been a slight delay in many cases.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees' state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of the Nature of Amount Period to Forum where

statute due (Rs. in crore) which the dispute is

amount pending relates

Trade Tax & UP Trade Tax, 0.23 2001-02, High Court

Entry Tax Entry Tax 2002-03

Sales Tax Local Sales 0.02 1988-89, Tribunal Tax, Central 1989-90

Sales Tax

Sales Tax Local Sale 0.02 1989-90, Deputy

Tax, Central 1990-91, Commissioner -

Sales Tax 1991-92, (Appeals)

1996-97,

1998-99

Trade Tax UP Trade Tax 3.93 2002-03, Commissioner

2003-04 (Appeals)

(x) In our opinion, the Company does not have accumulated losses at the end of the financial year. Further, the company has incurred cash losses during the financial year covered by our audit and has not incurred cash losses in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders, except that as at 31 March, 2012 the company was in default in repayment of its dues to a bank amounting to Rs. 17.50 crore.

(xii) According to information and explanations given to us and based on document and records provided to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

(xvi) In our opinion, the term loans have been applied for the purpose for which the loans were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Act.

(xix) According to the information and explanations given to us and based on records examined by us, the Company has not issued any debentures during the year. Further, the Company has created security or charge in respect of debentures issued in earlier years.

(xx) The Company has not raised any money by way of public issue during the year.

(xxi) During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management.

For Haribhakti & Co.

Chartered Accountants FRN: 103523W

Sumant Sakhardande Partner

Membership No.034828

Place: Mumbai

Date: May 25, 2012


Mar 31, 2010

1. We have audited the attached Balance Sheet of Mukand Limited (the "Company" as at 31st March, 2010 and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the Auditing Standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (together the "Order"), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of India (the Acf) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. Without qualifying our report, we invite attention to the following:-

(a) Note No. B 6 (a) of Schedule 20 to the Accounts, relating to the Companys Exposures in Bombay Forgings Limited (BFL), aggregating Rs.805.26 Million as at 315 March, 2010, and the long term view on their recoverability based upon the projected future earnings from the business activities of BFL, barring significant uncertainties in the future;

lb) Note No. B 6 (c) of Schedule 20 to the Accounts, relating to the Companys Exposures in Stainless India Limited (SIL) aggregating Rs.586.99 Million as at 31st March, 2010 and our reliance upon the estimated realizable values of the unencumbered assets of SIL, being adequate to recover these exposures, barring significant uncertainties in future; and

(c| Note No. B 12 |c) of Schedule 20 to the Accounts, relating to the realisability of outstanding claims made by the Company aggregating Rs,l,191.93 Million, for incremental jobs executed, escalations and time overruns for its Road Construction Contract, which are dependent upon uncertainties inherent to these activities.

5. We invite further attention to the following:-

a) Note No. B 6 lb) of Schedule 20 to the Accounts, regarding the managements assessment, relying on the estimated realizable values of the financial assets of Vidyavihar Containers Limited IVCLj and its rights in a real estate development arrangement, that the unprovided Exposures of the Company, in VCL, aggregating Rs.1,106.38 Million as at 31s March, 2010, are good and fully realizable. In view of inherent uncertainties involved, we are unable to make an assessment of the said realisability with accuracy, and therefore, the same could necessitate provisioning, if it ultimately results in a shortfall;

(b) Note No. B 6 (dj of Schedule 20 to the Accounts, relating to the managements assessment that the investment made in and loans given to Mukand Global Finance Limited IMGFLI aggregating Rs.268.50 Million are good and fully realisable, against the estimated realizable value of the investment in MGFL, which is under consideration for disposal and since the negotiated price is yet undecided, any ultimate shortfall in the realisation, could necessitate provisioning at the point of disposal;

In view of what is reported above, the aggregate impact of the same is not quantifiable by us.

6. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit;

lb) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

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

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section I3C) of Section 211 of the Act;

|e) On the basis of written representations received from the directors, as on 31s March, 2010 and taken on record by the Board of Directors, none of the directors is disqualified as on 31s March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

7. In our opinion and to the best of our information and explanations given to us, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Act and except for the ad/ustments that may be required in view of the matters referred to in paragraph 5 above, give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31s March, 2010;

b) In the case of the Profit and Loss Account, of the profit for the year ended on that date and;

c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO AUDITORS REPORT

REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT OF EVEN DATE TO THE MEMBERS OF MUKAND LIMITED ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31SI MARCH, 2010

1. (a) The Company is maintaining proper records showing full

particulars, including quantitative details and situation, of fixed assets.

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies between the book records and the physical inventory have been noticed.

|c| In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

2. (a) The inventory (excluding stocks with third parties! has been

physically verified by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

(b| In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. a) The Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

b] The Company has taken secured / unsecured loans, from four companies covered in the register maintained under Section 301 of the Act. The maximum amount involved during the year and the year-end balance of such loans aggregate Rs.489.88 Million and Rs.143.57 Million, respectively.

c) In our opinion, the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the Company.

(d) In respect of the aforesaid loans, the Company is regular in repaying the principal amounts as stipulated and is also regular in payment of interest, where applicable.

4. In our opinion and according to the information and explanations given to us, there are generally adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for sale of goods and services. During the course of our audit, we have not observed any major weakness in internal controls.

5. la) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no Order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

7. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

8. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209|l)(d) of the Companies Act, 1956 in respect of the Companys products to which the said rules are applicable, and are of the opinion that, prima- facie, the prescribed records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, except for income tax deducted at source, the Company is generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities. There are no amounts outstanding for a period exceeding six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, there were no disputed dues in respect of Wealth tax. Service tax. Customs duty. Excise duty and Cess. However, the following disputed dues in respect of Income tax and Sales tax as at 31s1 March, 2010, have not been deposited with the relevant authorities:

10. The Company does not hove accumulated losses al the end of the current financial year. The Company has not incurred cash losses in the current year, but it has incurred a cash loss in the immediately preceding year.

11. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. On the basis of our examination of the documents and records of the Company, the Company has not dealt in, or traded in shares, securities, debentures and other investments.

14. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

15. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

16. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, as at the close of the year, there are no funds raised on a short-term basis which have been used for long-term investment.

17. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

18. The Company has not issued any debentures during the year.

19. The Company has not raised any money by public issues during the year.

20. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.

The other clauses, jiii) (b), (iii) (c), liii) Id) and (xiii) of paragraph 4 of the Order are not applicable in the case of the Company for the year, since in our opinion there is no matter which arises to be reported in the aforesaid Order.

For DALAL & SHAH

Firm Registration Number: 102021W Chartered Accountants

Mumbai Ashish Dalai Partner 26th May, 2010 Membership No.: 033596



 
Subscribe now to get personal finance updates in your inbox!