FUTURE MRF Auditors Report

We have audited the accompanying Financial Statements of MRF LIMITED
(''the Company'') which comprise the Balance Sheet as at 30th September,
2014, the Statement of Profit and Loss and Cash Flow Statement for the
year then ended, and a summary of significant accounting policies and
the explanatory information.

Management''s Responsibility for the Financial Statements

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 referred to in sub-section (3C) of Section 211
of the Companies Act, 1956. 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

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.

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 judgement, 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 Company''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.

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

Opinion

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 Companies Act,1956 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 30th September, 2014;

b) in the case of the Statement of Profit and Loss, of the Profit of
the Company for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the Cash Flows of the
Company for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

2. As required by Section 227(3) of the Companies Act 1956, 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, Statement of Profit and Loss and Cash Flow
statement dealt with by this report are in agreement with the books of
account;

d) In our opinion, the Balance Sheet, Statement of Profit & Loss 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;

e) On the basis of written representations received from the Directors
as on 30th September, 2014 and taken on record by the Board of
Directors and on the basis of examination of the records of the
company, we report and certify that none of the Directors is
disqualified as on 30th September, 2014 from being appointed as a
Director in terms of clause (g) of sub-section (1) of Section 274 of
the Companies Act, 1956.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT (Referred to in our report
of even date to the members of MRF LIMITED as at and for the year ended
30th September, 2014).

i) a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets;

b) As explained to us, the fixed assets have been physically verified
by the management, at reasonable intervals, in accordance with a phased
programme of verification, which in our opinion, is reasonable,
considering the size of the Company and the nature of its assets. No
material discrepancies were noticed on such physical verification;

c) The Company has not disposed off any substantial part of its fixed
assets so as to affect its going concern status.

ii) a) The inventory has been physically verified by the management
during the year at reasonable intervals, except for materials lying
with third parties, where confirmations are obtained;

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

c) The Company has maintained proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.

iii) a) 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
4(iii) (b) to (d) of the Order are not applicable.

b) The Company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Accordingly, Clauses
4(iii) (f) & (g) of the Order are not applicable.

iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory, 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.

v) a) Based on the audit procedures applied by us and according to the
information, explanations and representations given to us, we are of
the opinion that particulars of contracts or arrangements referred to
in Section 301 of the Companies Act, 1956 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 contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 exceeding the value of rupees five lacs in
respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market prices at that time.

vi) The Company has complied with the directives issued by the Reserve
Bank of India and provisions of Sections 58A, 58AA and other relevant
provisions of the Companies Act, 1956 and the rules framed thereunder
with regard to deposits accepted from the Public. 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 in this
regard.

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

viii) We have broadly reviewed the Books of Account maintained by the
Company as prescribed by the Central Government for maintenance of cost
records under Section 209(1)(d) of the Companies Act, 1956, and are of
the opinion that prima-facie the prescribed accounts and records have
been made and maintained. However, we have not carried out a detailed
examination of the accounts and records.

ix) a) According to the information and explanations given to us, the
Company is regular in depositing 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 statutory dues with
appropriate authorities. According to the information and explanations
given to us, there are no undisputed amounts payable in respect of such
statutory dues which have remained outstanding as at 30th September,
2014 for a period of more than six months from the date they became
payable;

b) According to the information and explanations given to us, the
details of disputed sales tax, customs duty, excise duty, cess and
income tax which have not been deposited as at 30th September 2014 on
account of any dispute, are as under:

Statute and nature of Financial year to Forum where Rs.
dues which the matter the dispute is Crore
pertains pending

CENTRAL SALES TAX
ACT, 1956 & VAT
LAWS

Sales tax / VAT and 2000-01,2002-03 , Appellate 7.67
penalty 2003-04,2005-06 to Commissioner
2011-12

1993-94 to 1995-96, Appellate 11.81
1997-98 to 2007-08, Tribunal
2009-10 & 2010-11

1996-97 High Court 0.04
1996-97, 2000-01 & Supreme 0.59
2001-02 Court

CUSTOMS ACT, 1962

Customs Duty and 2003-04 Appellate 0.16
penalty Tribunal

1992-93 to 1994-95 High Court 74.89

CENTRAL EXCISE ACT,
1944

Excise duty and 1997-98, 1998-99 & Appellate 0.09
penalty 2005-06, Commissioner

1993-94, 1999- Appellate 0.74

2000 to 2004-05 & Tribunal
2008- 09

2001-02 Supreme 0.06
Court

INCOME TAX, 1961

Income Tax 2000-01 to 2003-04, High Court 9.33
2009-10 & 2010-11

ANDHRA PRADESH
ELECTRICITY
REGULATORY
COMMISSION

Cess on own power 2010-11 to 2013-14 High Court 5.19

x) The Company has no accumulated losses at the end of the financial
year and has not incurred cash losses in the current financial year and
in the immediately preceding financial year.

xi) The Company has not defaulted in repayment of its dues to banks and
debenture holders.

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

xiii) The provisions of any special statute applicable to Chit Fund,
Nidhi or Mutual Benefit Fund/Societies are not applicable to the
Company.

xiv) The Company is not dealing or trading in shares, securities,
debentures or other investments. Accordingly, requirements of Clause
4(xiv) of the said order are not applicable to the Company.

xv) According to the information and explanations given to us and the
representation made by the management the Company has given guarantees
for loan taken by its subsidiary companies from banks. In our opinion,
the terms and conditions of the said guarantees are not prima facie
prejudicial to the interest of the company.

xvi) On the basis of the records examined by us, and relying on the
information compiled by the Company for correlating the funds raised to
the end use of term loans, the Company has, prima facie, applied the
term loans for the purposes for which they were obtained.

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
investments.

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

xix) The Company has created security in respect of the Debentures
issued.

xx) The Company has not raised any money by way of public issues during
the year. Hence the requirements of clause 4(xx) of the said Order are
not applicable to the Company.

xxi) On the basis of our examination and according to the information
and explanations given to us, considering the size of the Company and
nature of its business, no fraud by the Company and no significant
fraud on the Company, has been noticed or reported during the year.

For Sastri & Shah For M. M. Nissim & Co.

Chartered Accountants Chartered Accountants

Firm Regn. No. 003643S Firm Regn. No. 107122W

(C. Sri Ram) (Dhiren Mehta)

Partner Partner

Mem. No. 005897 Mem. No. 109883

Chennai, Dated 26th November, 2014




CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.
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