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Mahamaya Steel Industries Ltd.

BSE: 513554 Sector: Metals & Mining
NSE: MAHASTEEL ISIN Code: INE451L01014
BSE LIVE 19:40 | 19 Oct 65.20 -1.90
(-2.83%)
OPEN

65.15

HIGH

67.00

LOW

65.00

NSE 19:44 | 19 Oct 66.25 0.45
(0.68%)
OPEN

66.90

HIGH

66.90

LOW

65.75

OPEN 65.15
PREVIOUS CLOSE 67.10
VOLUME 1402
52-Week high 242.55
52-Week low 55.00
P/E 86.93
Mkt Cap.(Rs cr) 88
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 65.15
CLOSE 67.10
VOLUME 1402
52-Week high 242.55
52-Week low 55.00
P/E 86.93
Mkt Cap.(Rs cr) 88
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Mahamaya Steel Industries Ltd. (MAHASTEEL) - Auditors Report

Company auditors report

To the Members of

MAHAMAYA STEEL INDUSTRIES LIMITED

1. Report on the Standalone Financial Statements:

We have audited the accompanying standalone financial statements of Mahamaya SteelIndustries Limited (‘the Company’) which comprise the balance sheet as at 31March 2016 the statement of profit and loss and the cash flow statement for the year thenended and a summary of significant accounting policies and other explanatory informationfor the year then ended.

2. 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 preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

3. Auditor’s 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 accountingand auditing standards and matters which are required to be included in the audit reportunder the 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 theamounts and the disclosures in the financial statements. The procedures selected depend onthe auditor’s judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal financial control relevant to theCompany’s preparation of the financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances but not forthe purpose of expressing an opinion on whether the Company has in place an adequateinternal financial controls system over financial reporting and the operatingeffectiveness of such controls. An audit also includes evaluating the appropriateness ofthe accounting policies used and the reasonableness of the accounting estimates made bythe Company’s Directors as well as evaluating the overall presentation of thefinancial statements.

5. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone financialstatements.

Basis for Qualified Opinion:

The company has recognised electricity duty receivable amount of Rs.1.05 crores(NoteNo.13& 25) by the way of reversing electricity duty expenditure for the year; thecompany has not provided any sanction from the competent authority (CSIDC);in the absenceof any reasonable certainty of the ultimate collection the receivable amount is not inline with the Accounting Standard (AS-9)(Revenue Recognition) of ICAI. The company hasbeen following the same procedure for the earlier years which is having a cumulativeeffect of receivable balance of Rs. 8.82 crores.Had the company would not been recognisedthe same receivable during the year the profit of the company would have been reduced tothe extent of Rs.1.05 crores and the cumulative reduction in the receivable (CurrentAssets) and share holder's fund to the extent of 8.82 Crores for the year.

6. Qualified Opinion:

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matters described in the Basis for qualifiedopinion paragraph above the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31 March 2016 and its loss and its cash flows for the yearended on that date.

Emphasis of matters:

We draw attention to the following matters in the notes to the financial statements;

Note No.18 (Other current assets) of the financial statement where the company hadrecognised receivable amount of Rs.114.56 lakhs from one of its employee committed fraudduring the earlier financial year the company had filed a legal suit against the employeeand the same is subject to judicial proceedings. The outcome of the ultimate realizationand the legal suit is not known at present.

Our opinion in not modified in respect of these matters.

7. Report on Other Legal and Regulatory Requirements:

As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure a statement on the matters specified inthe paragraph 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 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;

(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) Except to the para mentioned above in our opinion the aforesaid standalonefinancial statements comply with the Accounting Standards specified under Section 133 ofthe Act read with Rule 7 of the Companies (Accounts) Rules 2014;

(e) on the basis of the written representations received from the directors as on 31March 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2016 from being appointed as a director in terms of Section164 (2) of the Act; and

(f) With respect to the adequacy of internal financial controls over financialreporting of the company and the operating effectiveness of such controls refer to ourseparate report in Annexure-B' and

(g) 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 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(Note-30) on itsfinancial position in its financial statements.

ii. the Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts. And

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For R.K. Singhania & Associates
Chartered Accountants
F.R.No. 004435C
Place: Raipur Ramesh Kumar Singhania
Date: 28 May 2016 Partner
Membership No. 041880

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

The Annexure referred to in paragraph 7 of our Independent Auditors’ Report ofeven date to the members of the Company on the standalone financial statements for theyear ended 31 March 2016 we report that:

(i) (a) According to the information and explanations given to us the Company is inprocess of maintaining proper records showing full particulars including quantitativedetails and situation of fixed assets.

(b) As explained to us the Company has a regular programme of physical verification ofits fixed assets by which fixed assets are verified in a phased manner over a period ofthree years. In accordance with this programme certain fixed assets were verified duringthe year and no material discrepancies were noticed on such verification. In our opinionthis periodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets.

(c) According to the information and explanation given to us and on the basis of ourexamination of the records of the company the title deeds of immovable properties asdisclosed in Note-11 on the fixed assets to the financial statements are held in the nameof the company.

(ii) (a) According to the information and explanations given to us the company has beenphysically verified the inventory (except stock lying with third parties) at reasonableintervals during the year. In respect of inventories lying with third parties these havesubstantially been confirmed by them.

(b) According to the information and explanations given to us the procedures ofphysical verification of inventory followed by the management is reasonable and adequatein relation to the size of the company and the nature of the business.Further thediscrepancies noticed in our physical verification of inventory as compared to books ofaccounts were not material.

(iii) According to the information and explanations given to us the Company has notgranted loans to the bodies corporate covered in the register maintained under section 189of the Companies Act 2013 (‘the Act’). Accordingly paragraph 3(iii) of theorder is not applicable during the year.

(iv) The company has not granted any loans investments guarantees and securitiesgranted in respect of which the provisions of section 185 & 186 of the Act areapplicable and hence not commented thereon.

(v) According to the explanation and information given to us the Company has notaccepted any deposits within the meaning of section 73 to 76 of the Act and the rulesframed thereunder to the extent notified during the year.

(vi) The Central Govt. has prescribed maintenance of cost records under section 148(1)of the Companies Act 2013 in respect of manufacturing activities of the company. We havebroadly reviewed the accounts and records of the company in this connection and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. We have not however made a detailed examination of the same.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the company the company is regular in depositing theundisputed statutory dues including provident fund employee's state insurance incometax sales tax wealth tax service tax duty of customs duty of excise value added taxcess and any other statutory dues with the appropriate authorities. And there is no arrearof outstanding statutory dues at the last day of the financial year concerned for a periodof more than six months from the date they became payable.

(b) According to the information and explanations given to us the disputed amountspayable in respect of provident fund income tax sales tax wealth tax service tax dutyof customs value added tax cess and other material statutory dues aggregating toRs.1127.62 lakhs that have not been deposited on account of matters pending before theappropriate authorities are as under;

Sl. No. Name of the Statute Nature of the duties Amount in Lacs Period to which the amount relates Forum where dispute is pending
1 Sales Tax statute of the State Sales\ Comm. tax 4.98 1990-91 Before the Hon'able High Court of Chhattisgarh
2 Income tax Act 1961 Income tax 945.67 2013-14 ACIT Raipur
3 Central Excise Act 1944 Excise duty 18.39 2011-12 Assistant Commissioner Raipur
4 Central Excise Act 1944 Excise duty 5.79 2011-12 Additional Commissioner Raipur
5 Central Excise Act 1944 Excise duty 7.70 2013-14 Commissioner (Appeal) Raipur
6 Central Excise Act 1944 Excise duty 18.41 2014-15 Commissioner (Appeal) Raipur
7 Central Excise Act 1944 Excise duty 9.91 2015-16 Assistant Commissioner Raipur
8 Central Excise Act 1944 Excise duty 0.10 2015-16 Superintendent (Tech) Raipur
9 Central Excise Act 1944 Excise duty 116.67 2012-13 CESTAT New Delhi
Total 1127.62

(viii) According to the records of the company examined by us and the information andexplanation given to us the company has not defaulted in repayment of loans or borrowingsto any banks financial institutions or govt. Further the company does not have anydebentures issued/ outstanding any time during the year.

(ix) The company has not raised any money by way of initial public offer or furtherpublicoffer (including debt instruments) during the year. The company has obtained freshterm loan during the year and the same has been mainly applied for the purpose for whichthese are obtained.

(x) According to the information and explanations given to us no material fraud on orby the Company has been noticed or reported during the course of our audit.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the company the company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with schedule v to the Act.

(xii) In our opinion and according to the information and explanation given to us thecompany is not a nidhi company. Accordingly paragraph 3 (xii) of the Order is notapplicable during the year.

(xiii) According to the information and explanation given to us and based on ourexamination of the records of the company transactions with the related parties are incompliance with sections 177 and 188 of the Act wherever applicable and details of suchtransactions have been disclosed in Note -31 to the financial statement as required by theapplicable accounting standard.

(xiv) According to the information and explanation given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

(xv) According to the information and explanation given to us and based on ourexamination of the records of the company the company has not entered into any non-cashtransactions with directors or persons connected with them as prescribed under section 192of the Act. Accordingly paragraph 3 (xv) of the Order is not applicable during the year.

(xvi) The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly paragraph 3(xvi) of the order is not applicableduring the year.

For R.K. Singhania & Associates
Chartered Accountants
F.R.No. 004435C
Place: Raipur Ramesh Kumar Singhania
Date: 28 May 2016 Partner
Membership No. 041880

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THEFINANCIAL STATEMENTS OF MAHAMAYA STEEL INDUSTRIES LIMITED

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

We have audited the Internal Financial controls over financial reporting of MAHAMAYASTEEL INDUSTRIES LIMITED ("the Company") as of March 31 2016 in conjunctionwith our audit of the financial statements of the Company for the year ended on the 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). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to 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 Act.

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") and the Standards on Auditing deemed to be prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respect.

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 of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material 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 controls systemover financial reporting.

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 realibility of financial reporting and thepreparation of financial statements for external purpose in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting including those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable details 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 statement.

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 evolution 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 degreee 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 March 31 2016 based on theinternal controls 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 R.K. Singhania & Associates
Chartered Accountants
F.R.No. 004435C
Place: Raipur Ramesh Kumar Singhania
Date: 28 May 2016 Partner
Membership No. 041880