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Maha Rashtra Apex Corporation Ltd.

BSE: 523384 Sector: Financials
NSE: MAHAPEXLTD ISIN Code: INE843B01013
BSE LIVE 15:40 | 20 Nov 73.35 3.15
(4.49%)
OPEN

66.70

HIGH

73.70

LOW

66.70

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 66.70
PREVIOUS CLOSE 70.20
VOLUME 24372
52-Week high 146.85
52-Week low 15.75
P/E
Mkt Cap.(Rs cr) 104
Buy Price 73.70
Buy Qty 160.00
Sell Price 0.00
Sell Qty 0.00
OPEN 66.70
CLOSE 70.20
VOLUME 24372
52-Week high 146.85
52-Week low 15.75
P/E
Mkt Cap.(Rs cr) 104
Buy Price 73.70
Buy Qty 160.00
Sell Price 0.00
Sell Qty 0.00

Maha Rashtra Apex Corporation Ltd. (MAHAPEXLTD) - Auditors Report

Company auditors report

To the Members MAHA RASHTRA APEX CORPORATION LTD

Report on the Financial Statements

1. We have audited the accompanying financial statements of MAHA RASHTRA APEXCORPORATION LIMITED ("the Company") which comprise the Balance Sheetas at March 31 2016 the Statement of Profit and Loss and Cash Flow Statement for theyear then ended and a summary of significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Financial Statements

2. The management and Board of Directors of the Company are responsible for the mattersstated in Section 134(5) of the Companies Act 2013 ('the act') with respect to thepreparation of these 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 Companies (Accounts) Rules2014. This responsibility 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; design implementation and maintenance of adequate internal financial controlsthat are operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor's Responsibility

3 Our responsibility is to express an opinion on these financial statements based onour audit. We have taken into account the provisions of the Act the accounting andauditing standards and matters which are required to be included in the audit report underthe provisions of the Act and the Rules made thereunder. We conducted our audit inaccordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement.

4 An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by the Company's management and Board of Directors aswell as evaluating the overall presentation of the financial statements.

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

Basis for qualified Opinion:

By an order dated 13th June 2002 RBI has cancelled the certificate of registrationgranted to the company to act as Non-Banking Financial Company.

Accrued interest on deposits and bonds were provided up to 31.03.2002 only inaccordance with the scheme of restructure of the debts as sanctioned by the Honorable HighCourt of Karnataka.

All the installment of repayments of deposits/bonds as per the scheme of High Court ofKarnataka are due for payment on 15th September 2009 and 15th June 2009.The companystopped repayment of deposits/bonds on maturity dates till the sanction of restructure bythe Honorable High Court of Karnataka on 8th October 2004. Now the company has startedrepayment of deposits/bonds under the sanctioned scheme and shortfall in repaymentamounted to Rs.. 4649.61lakhs.

Provision has not been made in the accounts as required under RBI prudential Normssince 2000. The effect of non-provision is overstatement of assets by Rs..1868.99 Lakhsand Understatement of loss by Rs..1868.99 Lakhs including Short provision for diminutionin the value of investments Rs..6.27 lakhs.

In terms of direction issued by RBI i. The company has not obtained Credit Rating. ii.The Capital adequacy is negative. iii. In view of negative net worth all lending andinvestments are in excess of credit concentration limit stipulated by Reserve Bank ofIndia. iv The company has encased all the approved securities and utilized for repaymentof deposits/bonds.

Emphasis on Matters:

Your kind attention is drawn to the following matters: i. Note 3.5 on Notes toaccounts the company is incurring losses since 2001 and its funds are blocked innon-performing assets. The assets of the company is completely eroded and net worth of thecompany is negative. The company has prepared its financial statement of accounts on agoing concern basis as the management is off the view that it will be able to recover thedues from the borrowers/debtors and monitor the deficit in operation but we are unable tocomment on the ultimate reliability of company's assets. These conditions indicate theexistence of material uncertainty that may cast significant doubt about the companiesability to continue as a going concern.

ii. Note 3.6 to Notes on Accounts Provision has not been made in the accounts asrequired under RBI prudential Norms since 2000. The effect of non-provision isoverstatement of assets by Rs..1868.99 Lakhs and Understatement of loss by Rs.868.99.including Short provision for diminution in the value of investments Rs..6.27Lakhs.

iii. Note 3.7 to Notes on Accounts Investment in shares includes 750000 equity sharesof Rs..10 each in Bhooma Automobiles Ltd. sent for transfer in June 2012 is still pendingfor transfer in the name of the company. These shares were initially held by the companyshown under investment and included in the list submitted to Honorable High Court ofKarnataka in CP/37/2003. Subsequently these shares were sold but ROC Karnataka objectedfor sale of these shares for not obtaining prior permission from Honorable High Court ofKarnataka. Therefore the company repurchased these shares during 2012 and sent fortransfer in the companies name. These shares are not available for physical verification.And company has invested 50000 shares of Rs. 10/- each in Eldorado Investment CompanyPvt. Ltd.. a subsidiary company for a consideration of Rs. 950000/-share certificatenot produced for verification.

iv. No provision for Income tax liability against the order of the AO u/s 143(3)amounting to Rs..264.82 Lakhs in respect of following assessment years.

i. A.Y 1998 – 99 Rs..52.44 Lakhs against disallowance of depreciation on leasedasset and not giving credit for Tax

ii. A.Y 1999 – 2000 Rs..85.80 Lakhs against disallowance of depreciation on Leasedassets and Bad debts.

iii. A.Y 2000 – 01 Rs..126.58 Lakhs against disallowance of depreciation on Leasedassets and Bad debts. These appeals are pending before CIT (A) for disposal.

iv. Disputed sales tax amounting to Rs..17.54 lakhs in Andhra Pradesh pending fordisposal Sales Tax Appellate Tribunal.

V. Note No 3.11 of Notes on account Un En-cashed cheques amounting to Rs..415.19 Lakhsbeing un encashed DD/Multi city cheques issued for repayment of deposits/Bonds in terms ofthe scheme which is included under other current liabilities.

Qualified Opinion

6. In our opinion and to the best of our information and according to the explanationsgiven to us except for the effect/possible effect of the matters included in para theBasis for Qualified Opinion Paragraph and under Emphasis on matters reported above tothis report referred to in the aforesaid financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2016 its loss and its cash flows for the year ended on thatdate.

Report on Other Legal and Regulatory Requirements

7. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section143 ofthe Act we give in the Annexure "A" statement on the matters Specified inparagraphs 3 and 4 of the Order to the extent applicable.

8 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 appears from our examination of those books;

c. the Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account;

d. in our opinion except the matters in para on emphasis matter reported above andBasis for Qualified

Opinion may have adverse effect on the functioning on the company aforesaid financialstatements comply with the applicable Accounting Standards specified under Section 133 ofthe Act read with Rule 7 of the Companies (Accounts) Rules 2014

e. on the basis of written representations received from the directors as on March 312016 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of Section 164(2) of theAct.

f. With Respect to the adequacy of Internal financial controls over financial reportingof Company and the Operating effectiveness of such controls refer to our separate reportin "Annexure B"; and

g. Company has not appointed Internal Auditor as per the requirement of companies act2013.

h. In our opinion and to the best of our information and according to the explanationsgiven to us we report as under with respect to other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014:

(i) The Company has disclosed the impact of pending litigations which would impact itsfinancial position – refer to Note No 3.13 Notes to accounts. (ii) The Company didnot have any long-term contracts including derivative contracts; as such the question ofcommenting on any material foreseeable losses thereon does not arise. (iii) As the entiredeposit liability is covered under the scheme of arrangement transfer of matured depositremaining unpaid for a period of exceeding 7 years to Investor Education and ProtectionFund the question of delay in transferring such sums does not arise i. An amount ofRs..690028/- provided in the accounts towards delayed payment of interest under section194 A of IT Act 1961 on repayment of deposits / bonds is liable for disallowance under 40(a). (ia).

For RAO & SWAMI
Chartered Accountants
(Firm's Registration No.003105S)
(P V Shenoy)
Place : Bengaluru (Partner)
Date : 30/05/2016 (Membership No. 020205)

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF COMPANY

FOR THE YEAR ENDED 31 MARCH 2016

The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the financial statements for the year ended 31st March 2016 we report that:(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets ;

(b) i. Fixed assets have been physically verified by the management at reasonableintervals; no material discrepancies were noticed on such verification;

ii. Assets on lease have not been physically verified by the Management as most of theassets are under legal proceedings. Material discrepancies noticed on such verificationhave been properly dealt with in the books of account.

(c) The title deeds of the immovable properties are in the name of the Company.

(ii) The nature of business of the Company does not require it to have any inventory.Hence the requirement of clause (ii) of paragraph 3 of the said Order is not applicableto the Company (iii)

(iii) The company has not granted any loans during the year secured or unsecured tocompanies firms Limited liability Partnership or other parties covered in the registermaintained under section 189 of the Act. In respect of loans granted in earlier years therepayment of loans is not regular but the company has taken proper steps for recovery.

(iv) The Company has not made any Loans requiring compliance of section 185 of theCompanies Act 2013 during the year. In respect of an Invesment of 50000 equity shares ofRs..10/- each in Eldorado Investments Company (P) Ltd a subsidiary company for a saleconsideration of Rs.. 950000/-compliance of Section 186 of the Companies Act 2013 ispending.

(v) The Company has not accepted any deposits from the public covered under Section 73to 76 of the Companies Act 2013

(vi) As informed to us the Central Government has not prescribed maintenance of costrecords under sub-section (1) of Section 148 of the Act

(vii) (a) Based on the records of the company examined by us the company is regular indepositing the undisputed statutory dues including Provident Fund Employees' StateInsurance Income-tax Sales-tax Service Tax Custom Duty Excise Duty and other materialstatutory dues as applicable with the appropriate authorities in India ;

(b) According to the information and explanations given to us and based on the recordsof the company examined by us there are no dues of Income Tax Service Tax Sales TaxCustoms Duty and Excise Duty which have not been deposited on account of any disputes.Disputed income tax liability amounting to Rs..264.82 lakhs for the Assessment years1998-99 to 2000-01 are pending before CIT (A) for disposal. This demand has raised onaccount of disallowance of depreciation on leased assets and bad debts. The said demand isadjusted against refund due to the company. Disputed sales tax amounting to Rs..17.54lakhs in Andhra Pradesh pending for disposal Sales Tax Appellate Tribunal.

(viii) The company has not borrowed loans from Banks financial institution governmentauthorities. In respect of Debenture interest accrued thereon up to 31.03.2002 thecompany is in the process repayment as per the scheme of compromise and arrangementsanctioned by the Honorable High Court of Karnataka dated 8th October 2004.

(ix) The company has not raised money by way of Initial public offer /Further PublicOffer (including debt Instrument) during the year.

(x) No fraud on or by the Company was noticed or reported during the year under report

(xi) The Managerial Remuneration paid to its Managing Director is within the limitsspecified under Section 197 read with Schedule V of the Companies Act.

(xii) The Company is Not a Nidhi company and Nidhi rules 2015 is not applicable.

(xiii) The Company has disclosed all transaction with the related parties are incompliance with section 177 and 188 of Companies Act 2013 were applicable and the detailshave been disclosed in the financial statements etc. as required by applicable accountingstandards. However in respect of Two Associate companies i.e Mangala Investment Limitedand Rajmahal Hotels Ltd in-absence of documentary evidence we are unable to comment uponrelated party transactions entered in- respect of arm's length price.

(xiv) No private placement or preferential allotment of the shares or debentures weremade during the year.

(xv) The company has not entered into any non-cash transactions with directors orpersons connected with him.

(xvi) The certificate of registration granted to the company to act as Non-BankingFinancial Company as per Section 45-IA of Reserve Bank of India Act 1934 has beencancelled by an order dated 13th June 2002.

For RAO & SWAMI
Chartered Accountants
(Firm's Registration No.003105S)
Place : Bengaluru (P V Shenoy)
Date : 30/05/2016 (Partner)
(Membership No. 020205)

Annexure ‘B’ to the Auditors Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the ompanies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of MAHARASHTRA APEX CORPORATION LIMITED ("the Company") as of 31 March 2016 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

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 (‘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 company’s 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.

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 auditor’s 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 Company’s internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 un-authorised 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 the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For RAO & SWAMI
Chartered Accountants
(Firm's Registration No.003105S)
Place : Bengaluru (P V Shenoy)
Date : 30/05/2016 (Partner)
(Membership No. 020205)