To the Members of Maharashtra Seamless Limited
1) Report on the Standalone Financial Statements
We have audited the accompanying Standalone financial statements of MaharashtraSeamless Limited ("the Company") which comprise the Balance Sheet as at March31st 2016 the Statement of Profit and Loss Cash Flow Statement for the year then endedand a summary of significant accounting policies and other explanatory information.
2) Managements Responsibility for the Standalone Financial Statements
The Companys 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 Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
3) Auditors Responsibility
Our responsibility is to express an opinion on these Standalone financial statementsbased on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder and the order under section 143(11)of the Act.
We conducted our audit of the Standalone Financial Statement 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 financial statements are free from materialmisstatement.
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 assessmentsthe auditor considers internal financial control relevant to the Companyspreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Companys Directors as well as evaluating theoverall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone financial statements
4) Emphasis of Matter
We draw attention to note no. 2.41(ii &iii) to the Financial Statements relatingto Company has given interest free loan to Jindal Premium Connection Pvt. LimitedGondkhari Coal Mining Limited and Maharashtra Seamless Ltd Employees Welfare Trust whichhad been formed with the sole objective of employee welfare respectively Further we drawattention to note no. 2.35 regarding non-availability of financial statements of M/sGondkhari Coal Mining Limited (a JV entity) for F.Y 2015-16 and impaired ability tocontinue as Joint Venture due to cancellation of coal block by Supreme Court Judgement weare unable to report information as per requirement of Accounting Standard - 27."
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid (Standalone) financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31st 2016 and its Profit and its Cash Flow for the year ended on that date.
6) Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 ("theOrder") as amended issued by the Central Government of India in terms ofsub-section (11) of section 143 of the Act we give in the "Annexure A" astatement on the matters specified in paragraphs 3 and 4 of the Order.
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 bestof 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 theCompany 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 Statementdealt with by this Report are in agreement with the books of account
d. in our opinion the aforesaid (Standalone) financial statements comply with theAccounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e. On the basis of written representations received from the directors as on March31st 2016 taken on record by the Board of Directors none of the directors isdisqualified as on March 31st 2016 from being appointed as a director in terms of Section164 (2) of the Act.
f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".
7) With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its financial statements.;
ii. The Company did not have any long term contracts including derivativecontracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
"Annexure A" to the Independent Auditors Report
Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements of our report of even date to the financial statements of the Companyfor the year ended March 31st 2016:
1) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;
(b) The Fixed Assets have been physically verified by the management in a phasedmanner designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the company and nature of itsbusiness. Pursuant to the program a portion of the fixed asset has been physicallyverified by the management during the year and no material discrepancies between the booksrecords and the physical fixed assets have been noticed.
(c) The title deeds of immovable properties are held in the name of the company.
2) (a) The management has conducted the physical verification of inventory atreasonable intervals.
b) The discrepancies noticed on physical verification of the inventory as compared tobooks records which has been properly dealt with in the books of account were notmaterial.
3) In respect of loans secured or unsecured granted by the Company to the otherparties covered in the register maintained under section 189 of the Companies Act 2013:
(a) The Company has granted loans to eight companies. The maximum amount involvedduring the year was Rs 42419 lakhs the year-end balance of loan granted to such companieswas Rs 31675 lakhs.
(b) In respect of loans granted by the company the interest payments are regular exceptrefer note no. 2.41(ii &iii) to the financial statements and the principal amounts arebeing received/renewed on the due dates.
(c) There is no overdue amount in respect of the above loans.
4) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and I86 of the Companies Act 2013In respect of grant of loans making investments provide guarantees and security.
5) The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits are not applicable to the Company.
6) We have broadly reviewed the cost records maintained by the company pursuant to theorder made by the Central Government for the maintenance of cost records u/s 148(1) ofthe Companies Act 2013 and are of opinion that prima facie the prescribed records andaccounts have been maintained by the company. However we have not made a detailedexamination of these records to verify whether they are accurate or complete.
7) (a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company has been generally regularin depositing undisputed statutory dues including Provident Fund Employees StateInsurance Income-Tax Sales tax Service Tax Duty of Customs Duty of Excise Valueadded Tax Cess and any other statutory dues with the appropriate authorities. Accordingto the information and explanations given to us no undisputed amounts payable in respectof the above were in arrears as at March 31st 2016 for a period of more than six monthsfrom the date on when they become payable.
b) According to the information and explanations given to us details of dues of incometax Sales tax Custom Duty Wealth Tax Excise Duty and Cess which have not beendeposited as on March 31st 2016 on account of any dispute are given below:
|Name of the Statue Sales Tax ||Nature of Dues Demand for Sales Tax ||Forum where Dispute is pending Maharashtra Sales Tax Authority (Appellate Tribunal) ||Period to which the amount relates 2001-2002 ||Amount (Rs in lakhs) 4.65 |
|Excise Duty ||Demand For Excise Duty ||CESTAT ||2002-03 ||0.37 |
| || ||CESTAT ||2005-08 ||138.75 |
| || ||CESTAT ||2007-09 ||28.12 |
| || ||CESTAT ||2005-07 ||11.22 |
| || ||CESTAT ||2006-07 ||11.68 |
| || ||CESTAT ||2004-08 ||36.49 |
| || ||CESTAT ||2007-08 ||2.18 |
| || ||CESTAT ||2007-08 ||4.32 |
| || ||CESTAT ||2007-08 ||1.31 |
| || ||CESTAT ||2008-09 ||34.35 |
| || ||COMM (A) ||1999-00 ||5.71 |
| || ||COMM (A) ||2009-10 ||0.06 |
| || ||COMM (A) ||1998-00 ||12.99 |
| || ||High Court ||2005-07 ||3.46 |
| || ||High Court ||2006-07 ||4.25 |
|Income Tax ||Demand for Income Tax ||Commissioner Appeal ||2009-2010 ||4.53 |
| || || ||2010-2011 ||4.92 |
| || || || ||428.93 |
8) In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of dues to banks. The Company has not taken anyloan either from financial institutions or from the government and has not issued anydebentures.
9) Based upon the audit procedures performed and the information and explanations givenby the management the company has not raised moneys by way of initial public offer orfurther public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company.
10) Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.
11) Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act;
12) The Company is not a Nidhi Company. Therefore the provisions of clause 4 (xii) ofthe Order are not applicable to the Company.
13) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theStandalone Financial Statements as required by the applicable accounting standards. 14) Inour opinion and according to information and explanations available to us the company hasnot made any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review. Accordingly the provisions of clause3 (xiv) of the Order are not applicable to the Company.
15) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or directors of its holding subsidiary or associate company or personsconnected with them. Accordingly the provisions of clause 3 (xv) of the Order are notapplicable to the Company.
16) In our opinion the company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) ofthe Order are not applicable to the Company.
"Annexure B" to the Independent Auditors Report of even date on theStandalone Financial Statements of Maharashtra Seamless Limited
1) Referred to in paragraph 2(f) under Report on Other Legal and RegulatoryRequirements of our report of even date:
We have audited the internal financial controls over financial reporting of MaharashtraSeamless Limited ("the Company") as of March 31st 2016 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
2) Managements Responsibility for Internal Financial Controls
The Companys 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 (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to companys policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
3) Auditors 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") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated 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 auditors judgment 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 is sufficient and appropriate toprovide a basis for our audit opinion on the Companys internal financial controlssystem over financial reporting.
4) 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.
5) 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.
In our opinion the Company has certain areas wherein an adequate internal financialcontrols system over financial reporting can be improvised and on the basis of ourevaluation we have identified following observation in Internal Financial Control overfinancial reporting as per criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia :- Non availability of Audited Financials of Subsidiary JV & Associates forconsolidating financials.
Further the above mentioned issue may cause deficiency but does not have any impact ontrue and fair view of current financial statement as the same has been rectified incurrent financial year.
| ||For Kanodia Sanyal & Associates |
| ||Chartered Accountants |
| ||FRN: 008396N |
| ||R.K.Kanodia |
|Place : Delhi ||Partner |
|Date : 26th May 2016 ||Membership no.: 016121 |