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Disclosure in auditor’s report explanatory

INDEPENDENT AUDITOR’S REPORT 

To the Members of Mahindra Logistics Limited

Report on the Financial Statements

1. We have audited the accompanying financial statements of Mahindra Logistics Limited (“the Company”), which comprises the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

2. The Company’s Management is responsible for the preparation of these 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 Standards notified under the Companies Act, 1956 (“the Act”) read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

3. Our responsibility is to express an opinion on these financial 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 financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial 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 financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. 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 financial statements.

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

Opinion 

6. In our opinion and to the best of our information and according to the explanations given to us, the 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:

(a)    in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

(b)   in the case of the Statement of Profit and Loss, 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.

Report on Other Legal and Regulatory Requirements

7. As required by the Companies (Auditor’s Report) Order, 2003, as amended by the Companies (Auditor’s Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub–section (4A) of section 227 of the Act (the “Order”), 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.

8. 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;

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

d. In our opinion, the Balance Sheet, the Statements of Profit and Loss and Cash Flow  dealt with by this report, comply with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013;

e. on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub–section (1) of section 274 of the Companies Act, 1956.

 

For B. K. Khare & Co.

Chartered Accountants

Firm’s Registration Number 105102W

Devdatta Mainkar

Partner

M.No. 109795 

Mumbai : Dated  May 5, 2014

ANNEXURE TO THE AUDITOR’S REPORT 

(Referred to in paragraph 7 of the Independent Auditors’ Report of even date to the members of Mahindra Logistics Limited)

i) (a) The Company has maintained proper records showing full particulars includingquantitative details  and situation of fixed asset.

(b) We have been informed that all the fixed assets were physically verified by the management at reasonable intervals during the year and no material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed of any substantial part of fixed assets.

ii) (a) The Management has conducted physical verification of inventory at reasonable intervals. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the management were found reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of inventory, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records are not material and have been properly dealt with in the books of account.

iii)  According to the information and explanations given to us, the Company has neither granted nor taken any  loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956, and accordingly clause 4 (iii) (b), (c), (d), (f) and (g) of the Order are not applicable to the Company.

iv)  In our opinion and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and sales of goods and rendering of services.  On the basis of our examination and according to the information and explanations given to us, we have neither come across nor have we been informed of any major weakness in internal control system.

v) According to the information and explanation given to us, there are no transactions with parties that need to be entered in the register maintained under Section 301 of the Companies Act, 1956, and therefore the provisions of clause 4(vi)(b) of the Order are  not applicable to the Company.

vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public to which provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956, and the rules framed there under and therefore provision of clause 4(vi) of the Order is not applicable to the Company.

vii)  In our opinion and according to the information and explanations provided to us the Company has an internal audit system, which is commensurate with its size and nature of its business.       

viii)  According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under clause (d) of subsection (1) Of Section 209 of the Companies Act, 1956. Therefore the provisions of clause 4(viii) of the Order are not applicable to the Company.

ix) (a) According to the information and explanations given to us and according to the books and records produced and examined by us, in our opinion the Company has generally been regular in depositing undisputed statutory dues in respect of Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, cess and other applicable statutory dues with the appropriate authorities.

(b) As at 31 March 2014, according to information and explanation given to us the following are the particulars of dues on account of Income Tax and Service Tax that have not been deposited on account of any dispute:

Name of the

Nature of the

Amounts

Financial year to   

Forum where

Statute

Dues

(Rs. In Lakhs)     

which amount

relates

Pending

 The Income Tax Act, 1961             

Income Tax          

59.51

2009–10

CIT(A)

Service Tax Laws

Service Tax

50.68

2001–02

High Court

Service Tax Laws

Service Tax

20.03

2002–03

High Court

Service Tax Laws

Service Tax

13.35

2004–05

CESTAT

Service Tax Laws

Service Tax

24.92

2005–06

CESTAT

Service Tax Laws

Service Tax

38.96

2006–07

CESTAT

Service Tax Laws

Service Tax

110.00

2008–09

Commissioner

Service Tax Laws

Service Tax

133.00

 2009–10

Commissioner

x) The Company neither has accumulated losses as at the end of the current financial year nor has it incurred cash losses, in the current financial year and in the immediately preceding financial year.

xi) Based on our audit procedures and on the basis of information and explanations given by the management, the Company has not defaulted in the repayment of dues to financial institutions and banks.

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

xiii)  In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies.

xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments therefore provision of the clause 4(xiv) of the Order is not applicable to the Company.

xv)  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.

xvi)  In our opinion and according to information and explanation given to us, the loans availed by the company from the banks during the year under audit have been prima–facie utilised for the intended purpose. 

xvii)  According to the information and explanations given to us on an overall examination of the Balance Sheet and Cash Flows of the Company, in our opinion, there are no funds raised on short–term basis which have been used for long–term investments.

xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xix) The Company has not issued any debentures during the year and therefore the provision of clause 4(xix) of the Order is not applicable to the Company.

xx) During the year the Company has not raised any money by way of public issue therefore the provision of clause 4(xx) of the Order is not applicable to the Company.

xxi) Based on the audit procedures performed and information and explanations given by the management, we report that no material fraud on or by the Company has been noticed or reported during the year.

For B. K. Khare & Co.

Chartered Accountants

Firm’s Registration Number 105102W

Devdatta Mainkar

Partner

Membership No. 109795

Mumbai

Dated May 5, 2014

Disclosure relating to quantitative details of fixed assets

The Company has maintained proper records showing full particulars including quantitative details and situation of fixed asset

Disclosure relating to physical verification and material discrepancies of fixed assets

We have been informed that all the fixed assets were physically verified by the management at reasonable intervals during the year and no material discrepancies were noticed on such verification.

Disclosure relating to fixed assets disposed off

During the year, the company has not disposed of any substantial part of fixed assets.

Disclosure of physical verification of inventories at fixed intervals

The Management has conducted physical verification of inventory at reasonable intervals. In our opinion, the frequency of verification is reasonable.

Disclosure of procedure followed for physical verification of inventories

In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the management were found reasonable and adequate in relation to the size of the Company and the nature of its business.

Disclosure about maintenance of inventory records and material discrepancies

In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of inventory, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records are not material and have been properly dealt with in the books of account.

Disclosure in auditors report relating to any material fraud reported during period

Based on the audit procedures performed and information and explanations given by the management, we report that no material fraud on or by the Company has been noticed or reported during the year.

Disclosure in auditors report relating to loans and advances granted by way of pledge of shares debentures and other securities

According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares and other securities

Disclosure in auditors report relating to provisions under special statute

In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies.

Disclosure in auditors report relating to guarantee given

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.

Disclosure in auditors report relating to term loans used for purpose other than for purpose they were raised

In our opinion and according to information and explanation given to us, the loans availed by the company from the banks during the year under audit have been prima–facie utilised for the intended purpose.

Disclosure in auditors report relating to nature and amount of fund raised for short–term has been used for long–term or vice versa

According to the information and explanations given to us on an overall examination of the Balance Sheet and Cash Flows of the Company, in our opinion, there are no funds raised on short–term basis which have been used for long–term investments.

Disclosure in auditors report relating to preferential allotment of shares

The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956.

Disclosure in auditors report relating to internal control system

In our opinion and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and sales of goods and rendering of services. On the basis of our examination and according to the information and explanations given to us, we have neither come across nor have we been informed of any major weakness in internal control system.

Disclosure in auditors report relating to companies internal audit system

In our opinion and according to the information and explanations provided to us the Company has an internal audit system, which is commensurate with its size and nature of its business.

Disclosure relating to regularity in payment of undisputed statutory dues

According to the information and explanations given to us and according to the books and records produced and examined by us, in our opinion the Company has generally been regular in depositing undisputed statutory dues in respect of Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, cess and other applicable statutory dues with the appropriate authorities.

Disclosure relating to disputed statutory dues

As at 31 March 2014, according to information and explanation given to us the following are the particulars of dues on account of Income Tax and Service Tax that have not been deposited on account of any dispute: (Refer table under point (ix)(b) in element 'Disclosure in auditor’s report explanatory [Text Block]' for details)

Disclosure in auditors report relating to accumulated losses

The Company neither has accumulated losses as at the end of the current financial year nor has it incurred cash losses, in the current financial year and in the immediately preceding financial year

Disclosure in auditors report relating to default in repayment of financial dues

Based on our audit procedures and on the basis of information and explanations given by the management, the Company has not defaulted in the repayment of dues to financial institutions and banks.

Disclosure in auditors report relating to loans

According to the information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956, and accordingly clause 4 (iii) (b), (c), (d), (f) and (g) of the Order are not applicable to the Company.

Disclosure relating to presence of register for necessary transactions

According to the information and explanation given to us, there are no transactions with parties that need to be entered in the register maintained under Section 301 of the Companies Act, 1956, and therefore the provisions of clause 4(vi)(b) of the Order are not applicable to the Company.

Disclosure in auditors report relating to deposits accepted from public

In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public to which provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956, and the rules framed there under and therefore provision of clause 4(vi) of the Order is not applicable to the Company.

Disclosure in auditors report relating to maintenance of cost records

According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under clause (d) of subsection (1) Of Section 209 of the Companies Act, 1956. Therefore the provisions of clause 4(viii) of the Order are not applicable to the Company.

Disclosure in auditors report relating to adequacy of records maintained by share trading companies

In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments therefore provision of the clause 4(xiv) of the Order is not applicable to the Company.

Disclosure in auditors report relating to securities created against debentures issued

The Company has not issued any debentures during the year and therefore the provision of clause 4(xix) of the Order is not applicable to the Company.

Disclosure in auditors report relating to purpose and end use of money raised through public issues

During the year the Company has not raised any money by way of public issue therefore the provision of clause 4(xx) of the Order is not applicable to the Company.

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