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Mafatlal Industries Ltd.

BSE: 500264 Sector: Industrials
NSE: MAFATLAIND ISIN Code: INE270B01027
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NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 272.00
PREVIOUS CLOSE 270.05
VOLUME 1023
52-Week high 374.40
52-Week low 237.00
P/E
Mkt Cap.(Rs cr) 374
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 272.00
CLOSE 270.05
VOLUME 1023
52-Week high 374.40
52-Week low 237.00
P/E
Mkt Cap.(Rs cr) 374
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Mafatlal Industries Ltd. (MAFATLAIND) - Auditors Report

Company auditors report

To

The Members of

Mafatlal Industries Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of MAFATLALINDUSTRIES LIMITED ("the Company") which comprise the Balance Sheet as at31st March 2017 the Statement of Profit and Loss and the Cash Flow Statementfor the year then ended and a summary of the significant accounting policies and otherexplanatory information in which are incorporated the Returns for the year ended on thatdate audited by the branch auditors of the Company's branches located at Ahmedabad andNadiad.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsprescribed under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

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

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone financial statements are free frommaterial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence obtained by us and the audit evidence obtained bythe branch auditors in terms of their reports referred to in the Other Matter paragraphbelow is sufficient and appropriate to provide a basis for our audit opinion on thestandalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us and based on the consideration of reports of the branch auditors on separatefinancial information of the branches referred to in the Other Matter paragraph below theaforesaid standalone financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2017 and its loss and its cash flows for the year ended on that date.

Other Matter

We did not audit the financial information of two branches included in the standalonefinancial statements of the Company whose financial information reflect total assets ofRs. 31342.78 lakhs as at 31st March 2017 and total revenues of Rs. 33508.94 lakhs forthe year ended on that date as considered in the standalone financial statements. Thefinancial information of these branches have been audited by the branch auditors whosereports have been furnished to us and our opinion in so far as it relates to the amountsand disclosures included in respect of these branches and our report in terms ofsubsection (3) of Section 143 of the Act in so far as it relates to the aforesaidbranches is based solely on the report of such branch auditors.

Our opinion on the standalone financial statements and our report on Other Legal andRegulatory Requirements below is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act based on our audit and on theconsideration of the reports of the branch auditors on the separate financial informationof the branches referred to in the Other Matter paragraph above we report to the extentapplicable that:

a) We have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as it appears from our examination of those books and proper returnsadequate for the purposes of our audit have been received from the branches not visited byus.

c) The reports on the accounts of the branch offices of the Company audited underSection 143(8) of the Act by the branch auditors have been sent 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 branches not visited by us.

e) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards prescribed under section 133 of the Act.

f) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in termsof Section 164 (2) of the Act.

g) With respect to the adequacy of the internal financial controls over financialreporting of the Company and its branches and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure A". Our report expresses anunmodified opinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting.

h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements. Also refer Note no. 31.1 to the financialstatements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in the standalone financialstatements as regards its holding and dealings in Specified Bank Notes as defined in theNotification S.O. 3407(E) dated the 8th November 2016 of the Ministry ofFinance during the period from 8th November 2016 to 30th December2016; and such disclosures are in accordance with the books of accounts maintained by theCompany.

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration Number 117364W)
(Ketan Vora)
Place: Mumbai (Partner)
Date: 5th May 2017 (Membership Number 100459)

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTSOF MAFATLAL INDUSTRIES LIMITED

(Referred to in paragraph 1(g) under Rs.Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of MafatlalIndustries Limited ("the Company") as of March 31 2017 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate which includes internal financial controls over financial reporting of the Company'sbranches.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to respective company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained and the audit evidence obtained bythe branch auditors of branches located in India in terms of their reports referred to inthe Other Matter paragraph below is sufficient and appropriate to provide a basis for ouraudit opinion on the Company's internal financial controls system over financialreporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us and based on the consideration of the reports of the branch auditors on internalfinancial controls system over financial reporting of the branches referred to in theOther Matter paragraph below the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31st March2017 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

Other Matter

Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operatingeffectiveness of the internal financial controls over financial reporting insofar as itrelates to two branches located in India is based on the corresponding reports of thebranch auditors.

Our opinion is not modified in respect of this matter.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration Number 117364W)
(Ketan Vora)
Place: Mumbai (Partner)
Date: 5th May 2017 (Membership Number 100459)

ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT 0N THE FINANCIAL STATEMENTSOF MAFATLAL INDUSTRIES LIMITED

(Referred to in paragraph 2 under Rs.Report on Other Legal and RegulatoryRequirements' section of our report of even date)

(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) Some of the fixed assets were physically verified during the year by the Managementin accordance with a programme of verification which in our opinion provides for physicalverification of all the fixed assets at reasonable intervals. According to the informationand explanation given to us no material discrepancies were noticed on such verification.

(c) With respect to immovable properties of acquired land and buildings that arefreehold and leasehold according to the information and explanations given to us and therecords examined by us and based on the examination of the registered sale deed / transferdeed / conveyance deed / lease deed / court orders approving schemes of arrangements /amalgamations provided to us we report that the title deeds of such immovable propertiesare held in the name of the Company as at the balance sheet date.

(ii) As explained to us the inventories were physically verified during the year bythe Management at reasonable intervals and no material discrepancies were noticed onphysical verification.

(iii) According to the information and explanations given to us the Company hasgranted loans secured or unsecured to companies firms Limited Liability Partnershipsor other parties covered in the register maintained under section 189 of the CompaniesAct 2013 in respect of which:

(a) The terms and conditions of the grant of such loans are in our opinion primafacie not prejudicial to the Company's interest.

(b) The schedule of repayment of principal and payment of interest has not beenstipulated and in the absence of such schedule we are unable to comment on the regularityof the repayments or receipts of principal amounts and interest.

(c) There is no overdue amount remaining outstanding as at the year-end.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year.

(vi) The maintenance of cost records has been specified by the Central Government undersection 148(1) of the Companies Act 2013. We have broadly reviewed the cost recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014as amended prescribed by the Central Government under sub-section (1) of Section 148 ofthe Companies Act 2013 and are of the opinion that prima facie the prescribedcost records have been made and maintained. We have however not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding

Provident Fund Employees' State Insurance Income Tax Sales Tax Value Added TaxService Tax Customs Duty Excise Duty cess and other material statutory dues applicableto it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect ofProvident FundEmployees'State Insurance Income Tax Sales Tax Service Tax Customs Duty Excise DutyValue Added Tax cess and other material statutory dues in arrears as at 31stMarch 2017 for a period of more than six months from the date they became payable. As atthe year end the arrears of Statutory Dues outstanding for a period of more than sixmonths aggregate to Rs. 49.02 lakhs in respect of interest on Employees State Insurancedues Rs. 3.34 lakhs in respect of Excise Duty and Rs. 297.77 lakhs in respect of intereston water charges.

(c) Details of dues of Income-tax Sales Tax Service Tax Customs Duty Excise Dutyand Value Added Tax which have not been deposited as on 31st March 2017 onaccount of disputes are given below:

Name of Statute Nature of Dues Forum where Dispute is Pending Period to which the Amount Relates Amount Involved (Rs. in Lakhs)
Central Excise Act 1944 Excise Duty Assistant Commissioner 2006-07 to 2010-11 1.42
Central Excise Act 1944 Excise Duty Commissioner 1989-90 to 2003-04 74.58
Central Excise Act 1944 Excise Duty CESTAT 1989-90 to 2003-04 63.44
Central Excise Act 1944 Excise Duty High Court 1989-90 to 2003-04 14.99
Central Excise Act 1944 Excise Duty Supreme Court 1989-90 to 1999-2000 13.42
Central Excise Act 1944 Excise Duty Assistant Commissioner 1989-90 to 2003-04 182.11
Central Excise Act 1944 Excise Duty Commissioner (Appeals) 1989-90 to 2003-04 54.92
Central Excise Act 1944 Excise Duty Commissioner of Central Excise 2007-08 to 2009-10 2960.55
Customs Act 1944 Custom Duty Joint Director General of Foreign Trade 1989-90 to 1999-00 4.79
Bombay Industrial Relations Act 1946 Labour Dues Labour Court 1993 to 2013 608.70
Maharashtra Value Added Tax Sales Tax Joint Commissioner of Sales Tax (Appeals) - II 1989-90 to 1999-2000 3.22
Central Sales Tax Act 1956 Sales Tax Joint Commissioner of Sales Tax (Appeals) - II 1989-90 to 1999-2000 0.04
Mumbai Municipal Corporation Act 1988 Property Tax [Refer Note No. 31.1(a) (viii)] Assessor and Collector (City) Assessment and Collection Department 2000-05 2004-07 2008-10 3489.44
Income Tax Act 1961 Income Tax Dy. Commissioner of Income Tax Assessment Year 2012-13 9.48
Income Tax Act 1961 Income Tax ITAT Assessment Years 2003-04 2004-05 2006-07 2007-08 501.61
Income Tax Act 1961 Income Tax Commissioner of Income Tax Assessment Years 1997-98 1998-99 2002-03 2003-04 2006-07 2009-10 2011-12 and 2012-13 1925.44
Service Tax Rules Service Tax CESTAT Ahmedabad 1997-99 0.70

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to financialinstitutions banks and government. The Company has not issued any debentures.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments). In our opinion and according to the information andexplanations given to us the Company has utilized the money raised by way of term loansduring the year for the purposes for which they were raised.

(x) 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 by its officers oremployees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid/provided managerial remuneration in excess of the limits and approvalsprescribed under section 197 read with Schedule V to the Companies Act 2013 to thefollowing managerial personnel:

Managerial Position Excess amount of remuneration paid/ provided (Rs. in Lakhs) Financial year ending Treatment of the excess remuneration in the respective year financial statements Steps taken by the Company for securing refund
Managing Director 228.84 31st March 2017 Charged to the Statement of Profit and Loss Special Resolution will be passed at the ensuing Annual General Meeting.
Executive Director 27.56 31st March 2017 Charged to the Statement of Profit and Loss Special Resolution will be passed at the ensuing Annual General Meeting.
Director 149.86 31st March 2017 Charged to the Statement of Profit and Loss Special Resolution will be passed at the ensuing Annual General Meeting.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theCARO 2016 is not applicable.

(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of CARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him and hence provisions of section 192 of theCompanies Act 2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration Number 117364W)
(Ketan Vora)
Place: Mumbai (Partner)
Date: 5th May 2017 (Membership Number 100459)