TO THE MEMBERS OF MODISON METALS LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of MODISON METALSLIMITED ("the Company") which comprise the Balance Sheet as at March 31 2016the Statement of Profit and Loss and Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.
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 safeguardingof the 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.
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.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe 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. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Board of Directors as well as evaluating the overallpresentation 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.
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 31 March 2016 and its profit and its cash flows for the year ended on that date.
Emphasis of matter
1. We draw attention to Note No. 13.2 of the financial statement which states thatas per the policy of inventory valuation of the company the silver booked by the customerhas been valued at the rate at which the same is booked by the customers which is not inconsonance with Accounting Standard 2 on "Inventory valuation". However theimpact on the profit is not material. Our opinion is not qualified in respect of thismatter.
Report on Other Legal and Regulatory Requirements
1. 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 section 143 ofthe Act we give in the Annexure A a statement on the matters specified in paragraphs 3and 4 of the order to the extent applicable.
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 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 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;
f. With respect to adequacy of the internal financial controls over financial reportingof the Company and the operating effectiveness of such controls refer to our separatereport in "Annexure B" and
g. 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 Refer Note No. 18(a) to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; and
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the company.
For and on behalf of
M. L. Bhuwania & Co.
Firm's Registration No. 101484W
Membership No. 12839
Date: 26 May 2016.
Annexure- A referred to in paragraph titled as "Report on other Legal andRegulatory Requirements" of Auditors' report to the members Modison Metals Limitedfor the year ended 31 March 2016.
On the basis of the records produced to us for our verification / perusal such checksas we considered appropriate and in terms of information and explanation given to us onour enquiries we state that:
(i) (a) The company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The fixed assets of the Company are physically verified by the Management accordingto a phased programme designed to cover all the items over a period of three years whichin our opinion is reasonable having regard to the size of the Company and the nature ofits assets. Pursuant to the programme a portion of the fixed assets has been physicallyverified by the Management during the year and discrepancies noticed between the bookrecords and the physical inventories were not material and have been properly dealt within the accounts.
(c) According to information and explanations gives to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
(ii) During the year the inventories have been physically verified by the management.In our opinion the frequency of verification is reasonable. The discrepancies noticed onphysical verification of inventories as compared to the book records were not material andhave been properly dealt with in the books of account.
(iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Companies Act 2013 during the year. Accordingly clause 3 (iii) of theOrder is not applicable to the Company.
(iv) The Company has not granted any loans has not made investments has not providedany guarantees and security to directors or to any other parties during the year.Accordingly clause 3 (iv) of the Order is not applicable to the Company.
(v) The Company has not accepted any deposits from the public. Accordingly clause 3(v) of the Order is not applicable to the Company.
(vi) The Central Government has prescribed maintenance of cost records for the companyunder sub section (1) of section 148 of the Companies Act 2013 and such accounts havebeen made and maintained by the company. However no detailed examinations of such recordsand accounts have been carried out by us.
(vii) (a) According to the records of the Company the Company is generally regular indepositing undisputed statutory dues including Provident Fund Employees' State InsuranceIncome Tax Sales Tax Service Tax Excise Duty Customs Duty Value Added Tax Cess andother statutory dues applicable to it with the appropriate authorities. According to theinformation and explanations given to us no undisputed amounts payable were outstandingas at the last day of the financial year for a period of more than six months from thedate they become payable.
(b) According to the records of the Company there are no dues of Service Tax CustomsDuty Value Added Tax and Cess which have not been deposited on account of any dispute.
The disputed amounts that have not been deposited in respect of Sales Tax Income Taxand Excise Duty are as under:
|Sr.No. ||Name of the Statue ||Nature of the dues ||Amount ||Financial year to which the amount relates ||Forum where dispute is pending |
| || || ||(Rs) || || |
|1. ||Gujarat Value Added tax Act2003 ||Pending Forms ||3015144 ||2011-12 ||Joint Commissioner of Commercial Tax (Appeals) |
|2. ||Income Tax Act1961 ||Income Tax Dues ||4645330 ||2010-11 ||Commissioner of Income Tax (Appeals) |
|3. ||Central Excise Act 1944 ||Excise duty Dues ||226398 ||2006-2007 to 2009-2010 ||Honorable CESTAT |
| || ||Service Tax Dues ||2280859 ||2006-2007 to 2011-2012. ||Commissioner of Central Excise (Appeals) |
(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 dues to banksduring the year. The Company has not taken any loan or borrowing from governmentfinancial institutions and has not issued debentures during the year.
(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and through term loans during the year.Accordingly clause 3 (ix) of the Order is not applicable to the Company.
(x) Based upon the audit procedures performed and information and explanations given bythe management we report that no fraud by the Company or no fraud on the Company by itsofficers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us themanagerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of Sec 197 read with Schedule V to the Companies Act2013.
(xii) In our opinion and according to the information and explanations given to us thenature of activities of the Company does not attract any special statute applicable toNidhi Company. Accordingly clause 3 (xii) of the Order is not applicable to the Company.
(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 Sec 177 and 188 of Companies Act 2013 where applicable and details ofsuch transactions have been disclosed in the financial statements as required by theapplicable accounting standards.
(xiv) In our opinion and according to the information and explanations given to us andbased on our examination of the records of the Company the company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly clause 3 (xiv) of the Order is not applicable tothe Company.
(xv) In our opinion and according to the information and explanations given to us andbased on our examination of the records of the Company the company has not entered intoany non-cash transactions with directors or persons connected with him. Accordinglyclause 3 (xv) of the Order is not applicable to the Company.
(xvi) The company is not required to be registered under Sec 45-IA of the Reserve Bankof India Act 1934. Accordingly clause 3 (xvi) of the Order is not applicable to theCompany.
For and on behalf of
M. L. BHUWANIA & CO.
Firm Registration No. 101484W
Membership No. 12839
Date: 26 May 2016.
Annexure- B referred to in paragraph titled as "Report on the Internal FinancialControls under clause (i) of Sub- section 3 of Section 143 of the Companies Act2013" ("the Act")
We have audited the internal financial controls over financial reporting of ModisonMetals Limited ("the Company") as of 31 March 2016 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.
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 safeguarding ofits 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.
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 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 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.
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 and on behalf of
M. L. BHUWANIA & CO.
Firm Registration No. 101484W
Membership No. 12839
Date: 26 May 2016