TO THE MEMBERS OF MOHAN MEAKIN LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of MOHAN MEAKIN LIMITED("theCompany"), which comprise the Balance Sheet as at March 31, 2013, the Statement ofProfit and Loss, and the Cash Flow Statement for the year then ended, and a summary of thesignificant accounting policies and other explanatory information in which areincorporated the Returns for the year ended on that date audted by the branch auditors ofthe Companys Lucknow Distillery Branch.
Managements Responsibility for the Financial Statements
The Companys Management is responsible for the preparation of these financialstatements that give a true and fair view of the financial position, financial performanceand cash flows of the Company in accordance with the Accounting Standards referred to inSection 211(3C) of the Companies Act, 1956 ("the Act")and in accordance with theaccounting principles generally accepted in India. This responsibility includes thedesign, implementation and maintenance of internal control relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we complywithethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditors judgment, including the assessment of the risks of material misstatement ofthe financial statements, whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the Companys preparation and fairpresentation of the financial statements in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Companys internal control. An audit also includes evaluatingthe appropriateness of the accounting policies used and the reasonableness of theaccounting estimates made by the Management, as well as evaluating the overallpresentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.
In our opinion and to the best of our information and according to the explanationsgiven to us, the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the Company as atMarch 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit of the Company forthe year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the Company for theyear ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2003("theOrder") issued by the Central Government in terms of Section 227(4A) of the Act, wegive in the Annexure a statement on the matters specified in paragraphs 4 and 5 of theOrder.
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 ourknowledge 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 and audited returnsadequate for the purposes of our audit have been received from the branch audited bybranch auditors.
(c) The report on the accounts of the Lucknow Distillery Branch audited by branchauditors appointed under Section 228 of the Act, have been forwarded to us and have beenproperly dealt with by us in preparing this report;
(d) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statementdealt with by this Report are in agreement with the books of account and with the returnsreceived from the branch, audited by branch auditors.
(e) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the CashFlow Statement comply with the Accounting Standards referred to in Section 211(3C) of theAct.
(f) On the basis of the written representations received from the directors as on March31, 2013, taken on record by the Board of Directors, none of the directors is disqualifiedas on March 31, 2013 from being appointed as a director in terms of Section 274(1)(g) ofthe Act.
| ||FOR A. F. FERGUSON & CO. |
| ||Chartered Accountants |
| ||(Firm Registration No. 112066W) |
| ||Jaideep Bhargava |
| ||Partner |
|NEW DELHI, May 30, 2013 ||(Membership No. 090295) |
ANNEXURE TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements section of our report of even date)
Having regard to the nature of the Companys business/activities/result, clauses 4(xiii) and (xiv) of the Order are not applicable
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars, includingquantitative details and situation of fixed assets.
(b) The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of verification which, in our opinion, provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanation given to us, no material discrepancies were noticed on suchverification.
(c) The fixed assets disposed off during the year, in our opinion, do not constitute asubstantial part of the fixed assets of the Company and such disposal has, in our opinion,not affected the going concern status of the Company.
(ii) In respect of its inventories:
(a) As explained to us, the inventories were physically verified during the year by theManagement at reasonable intervals.
(b) In our opinion and according to the information and explanations given to us, theprocedures of physical verification of inventories followed by the Management werereasonable 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 and no material discrepancieswere noticed on physical verification.
(iii) (a) According to the information and explanations given to us, the Company has,during the year, not granted any loan, secured or unsecured to companies, firms and otherparties covered in the register maintained under Section 301 of the Companies Act, 1956.Accordingly, paragraphs 4 (iii) (b), (c) and (d) of the Order are not applicable.
(b) According to the information and explanations given to us, the Company has, nottaken any loan, secured or unsecured from companies, firms and other parties covered inthe register maintained under Section 301 of the Companies Act, 1956, other than unsecuredloans aggregating Rs.115.35 lacs taken from four directors covered in the registermaintained under Section 301 of the Companies Act, 1956. The maximum amount due during theyear was Rs.115.35 lacs. During the year due to retirement of one director, the year-endbalance of loans taken was Rs.115.10 lacs from three directors.
(c) The rate of interest and other terms and conditions of such loans are, in ouropinion, prima facie not prejudicial to the interest of the Company.
(d) The payments of principal amounts and interest in respect of such loans areregular/ as per stipulations.
(iv) In our opinion and according to the information and explanations given to us,having regard to the explanations that some of the items purchased are of special natureand suitable alternative sources are not readily available for obtaining comparablequotations, there is an adequate internal control system commensurate with the size of theCompany and the nature of its business with regard to purchases of inventory and fixedassets and the sale of goods and services. During the course of our audit, we have notobserved any major weakness in such internal control system.
(v) In respect of contracts or arrangements entered in the Register maintained inpursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge andbelief and according to the information and explanations given to us:
(a) The particulars of contracts or arrangements referred to in Section 301 thatneeded to be entered in the Register maintained under the said Section have been soentered.
(b) Where each of such transaction is in excess of Rs. 5 lakhs in respect of any party,the transactions have been made at prices which are prima facie reasonable havingregard to the prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations given to us, theCompany has complied with the provisions of Sections 58A, 58AA or any other relevantprovisions 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 informationand explanations given to us, no order has been passed by the Company Law Board or theNational Company Law Tribunal or the Reserve Bank of India or any Court or any otherTribunal.
(vii) In our opinion, the internal audit functions carried out during the year by firmsof Chartered Accountants appointed by the Management have been commensurate with the sizeof the Company and the nature of its business.
(viii) We have broadly reviewed the cost records maintained by the Company pursuant tothe Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Governmentunder Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that, primafacie, the prescribed cost records have been maintained. We have, however, not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.
(ix) According to the information and explanations given to us, in respect of statutorydues:
(a) The Company has generally been regular in depositing undisputed statutory dues,including Provident Fund, Investor Education and Protection Fund, Employees StateInsurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, ExciseDuty and other material statutory dues applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund, InvestorEducation and Protection Fund, Employees State Insurance, Income-tax, Sales Tax,Wealth Tax, Service Tax, Customs Duty, Excise Duty and other material statutorydues in arrears as at March 31, 2013 for a period of more than six months from the datethey became payable.
(c) Details of disputed dues not deposited/deposited under protest of Income-tax,Sales/Trade Tax, Service Tax, Customs Duty and Excise Duty as on March 31, 2013 are givenbelow:
|Name of the Statute ||Nature of the dues ||Forum where dispute is pending ||Amount* (Rs. lacs) ||Amount paid under protest (Rs.lacs) ||Period to which the amount relates |
|Sales tax laws ||Sales tax ||Appellate authority up to Commissioner's level ||1,103.49 ||4.43 ||1975-76, 1977 to 1979, 1987 to 1989, 1999-2000, 2006-07 to 2011-2012 |
| || ||Sales tax Appellate Tribunal ||19.33 ||- ||1984-85, 1985-86, 1991-92, 1992-93, 2007-08 to 2009-10 |
| || ||High Court ||8.85 ||- ||1994-95, 1995-96 1997-98, 1998-99 |
| ||Trade tax ||Appellate Tribunal ||20.95 ||- ||1984-85, 1985-86, 1987-88 2005-06 to 2007-08 |
| || ||High Court ||1.27 ||- ||1990-91 to 1992-93 1994-95,1995-96 |
|State Excise laws ||Excise duty ||High Court ||349.16 ||31.31 ||1969-70 to 1980-1981 1983 to 1986, 1988-89 to 2001-02, 1966-67 to 1985-86 |
|Central Excise laws ||Excise duty ||CESTAT ||26.53 ||13.27 ||2005 to 2007 |
| || ||Appellate authority up to Commissioner's level ||43.29 ||- ||2006-07, 2008-09 to 2010-11 |
|Service tax laws ||Service tax ||Appellate authority up to Commissioner's level ||100.92 ||- ||2004 to 2008 |
|Custom laws ||Custom duty ||CESTAT ||69.32 ||- ||1994 to 2004 |
* Amount as per demand orders including interest and penalty wherever quantified in theorder. Further, there are no disputed dues with respect to Wealth tax which are notdeposited.
The following matters, which have been excluded from the table above, have been decidedin favour of the Company but the concerned authorities have preferred appeals at higherlevels:
|Name of the Statute ||Nature of the dues ||Forum where dispute is pending ||Amount* (Rs. lacs) ||Period to which the amount relates |
|Sales tax laws ||Sales tax ||Sales tax appellate Tribunal ||358.08 ||1987 to 1989, 1990 to 1993 |
|State Excise laws ||Excise duty ||Supreme Court ||36.67 ||1997 to 1999 |
|Central Excise laws ||Excise duty ||Supreme Court ||39.06 ||2003-2004 |
|Income tax laws ||Income tax ||High Court ||423.95 ||2002-03 to 2005-06 |
(x) The Company does not have accumulated losses at the end of the financial year March31, 2013 and the Company has incurred cash losses only during the preceding year but hasnot incurred any cash loss during the current financial year.
(xi) In our opinion and according to the information and explanations given to us, theCompany has not defaulted in the repayment of dues to financial institutions and banks.The Company has not issued any debentures.
(xii) In our opinion and according to the information and explanations given to us, theCompany has not granted any loans and advances during the year on the basis of security byway of pledge of shares, debentures and other securities.
(xiii) According to the information and explanations given to us, the Company has notgiven any guarantees during the year for loans taken by others from banks or financialinstitutions.
(xiv) In our opinion and according to the information and explanations given to us, theterm loans have been applied by the Company during the year for the purposes for whichthey were obtained.
(xv) In our opinion and according to the information and explanations given to us, andon an overall examination of the Balance Sheet of the Company, we report that funds raisedon short-term basis have, prima facie, not been used during the year for long-terminvestment.
(xvi) The Company has not made any preferential allotment of shares during the year.(xvii) The Company has not issued any debentures during the year.
(xviii) The Company has not raised any money by way of public issue during the year.
(xix) To the best of our knowledge and according to the information and explanationsgiven to us, no fraud by the Company and no fraud on the Company has been noticed orreported during the year.
|Place : New Delhi, ||For A. F. FERGUSON & CO. |
|Date : May 30, 2013 ||Chartered Accountants |
| ||(Registration No. 112066 W) |
| ||Jaideep Bhargava |
| ||Partner |
| ||Membership No. : 090295 |