You are here » Home » Companies » Company Overview » Madhucon Projects Ltd

Madhucon Projects Ltd.

BSE: 531497 Sector: Infrastructure
NSE: MADHUCON ISIN Code: INE378D01032
BSE 00:00 | 02 Dec 5.35 0.25
(4.90%)
OPEN

5.35

HIGH

5.35

LOW

5.15

NSE 00:00 | 02 Dec 5.45 0.15
(2.83%)
OPEN

5.40

HIGH

5.50

LOW

5.20

OPEN 5.35
PREVIOUS CLOSE 5.10
VOLUME 30576
52-Week high 12.95
52-Week low 4.77
P/E
Mkt Cap.(Rs cr) 39
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 5.35
CLOSE 5.10
VOLUME 30576
52-Week high 12.95
52-Week low 4.77
P/E
Mkt Cap.(Rs cr) 39
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Madhucon Projects Ltd. (MADHUCON) - Auditors Report

Company auditors report

To the Members of

M/s. Madhucon Projects Limited

Report on the Standalone Financial Statements Qualified Opinion

We have audited the financial statements of

M/s. Madhucon Projects Limited (“the company”) which comprise the balancesheet as at 31st March 2021 and the statement of Profit and Loss and the statement ofcash flows for the year then ended and notes to the financial statements including asummary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner 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 March31 2021 its loss and cash flows for the year ended on that date.

Basis for Qualified Opinion

1) i) “the company” during the current year has written off the investmentsof Rs. 22727 lakhs held in Simhapuri Energy Limited (SEL) a step down subsidiary in caseof which a provision was made in the previous year. ii) Trade receivables of Rs. 8598.04Lakhs from SEL” is written off as bad debts during the current year.

2) We refer to the carrying value of investments held in and unsecured loans andadvances given by the company to its subsidiaries which have been incurring losses and incase of some of these companies net worth was fully or substantially eroded. In theabsence of fair valuation of these investments we are unable to comment upon the carryingvalue of investments and we are unable to comment whether any provision for impairment inthe value of investments loans and advances is required.

3) We refer to the “ Madhucon Mega Mall Private Limited (MMMPL) a subsidiary ofthe company incorporated for developing shopping mall cum multiplex on leased land takenfrom Andhra Pradesh housing Board ( Now known as Telangana housing Board) (“TheBoard”) at Kukatpally in Hyderabad. Pending approval from government to start theproject the carrying values of Investments in and

Loans Sanctioned to MMMPL amounting to Rs.3500.00 lakhs and Rs.135.21 Lakhsrespectively are shown as realizable at the Values Stated in the Books of Accounts.

4) There are outstanding Loans and advances of Rs 4191.10 Lakhs and Rs 512.49 Lakhsgranted to “Nama Investments Limited” and “NNR Infra Investments PrivateLimited” respectively in which the Company's Directors have Interest. TheseCompanies have been incurring Losses and accumulated losses exceeded the Net Worth. Themanagement is yet to assess the risk of default and resultant expected credit lossallowance on such loans and advances.

5) The company is yet to transfer unpaid dividend of an amount aggregating to Rs.707791/- relating to Financial Years 2008-09 to 2010-11 and 2012-13 from unpaid dividendaccount to Investor Education and Protection Fund (IEPF).

6) “the Company” has defaulted in repayment of dues to Banks and financialinstitutions amounting to Rs.68662.61 Lakhs and Rs.4522.22 Lakhs respectively as perbooks of account. All the loans outstanding were classified as NPA by the Banks andFinancial Institutions.Interest on these loans have not been provided for the financialyears 2018-19 2019-20 & 2020-21.

7) In the absence of confirmations of Trade Payables and various advances/loans we areunable to comment on the extent to which such balances are payable/recoverable.

8) The Company is yet to file final GST Returns for the FY 2020-21 in case of a fewstates. The turnover and input credits are subject to reconciliation

9) In view of losses incurred by “the company” and in the absence of priorapproval from the lender banks and financial Institutions managerial remuneration paid bythe company during the year is in excess of the limits specified under section 197 readwith schedule V of Companies Act2013.

10) In case of “Ranchi Expressways Ltd (REL)” a step down subsidiary of thecompany CBI has filed FIR against REL its Promoters and Directors on 12-03-2019 underPrevention of Corruption Act and Indian Penal Code. Subsequently the EnforcementDirectorate has raided the premises of “the company” on 11-06-2021 and theinvestigation is under progress.

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

In connection with our audit of the Information Other than the Standalone FinancialStatements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexure to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon. Our opinionon the standalone financial statements does not cover the other information and we do notexpress any form of assurance conclusion thereon. standalone financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the 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 financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the accounting Standards specified undersection 133 of the Act.This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statement that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

* Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

* Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on the effectiveness of the company's internal control.

* Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the Board of Directors.

* Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty exists;we are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

* Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

* We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

* We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

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.

2. As required by section 143(3) of the Act we further 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) Except for thepossible effects of the matter described in the Basis for Qualified Opinion proper booksof account as required by law have been kept by the Company so far as appears from ourexamination of those books; c) Except for the possible effects of the matter described inthe Basis for Qualified Opinion the Balance Sheet Statement of Profit and Loss includingOther Comprehensive Income the Statement of Cash Flows and the statement of changes inequity dealt with by this Report are in agreement with the books of account; d) Except forthe possible effects of the matter described in the Basis for Qualified Opinion theaforesaid Financial Statements comply with the applicable Accounting Standards specifiedunder Section 133 of the Act read with relevant rules issued there under. e) On the basisof written representations received from the directors as on March 31 2021 and taken onrecord by the Board of Directors none of the directors is disqualified as on March 312021 from being appointed as a director in terms of Section 164(2) of the Act. f) Withrespect to the adequacy of the internal financial controls over financial reporting of thecompany and the operating effectiveness of such controls refer to our separate report in‘Annexure B'. g) In view of losses incurred by “the company” and in theabsence of prior approval from the lender banks and financial Institutions managerialremuneration paid by the company during the year is in excess of the limits specifiedunder section 197 read with schedule V of Companies Act2013. h) With respect to othermatters to be included in the Auditor's Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules 2014 in our opinion and to the best of our information andaccording to the explanations given to us: i. The Company has disclosed the pendinglitigations which would impact its financial position in its notes to financialstatements. ii. The Company does not have any long-term contracts including derivativecontracts for which there were any material foreseeable losses. iii. The company is yet totransfer unpaid dividend of an amount aggregating to Rs. 873824/- relating to FinancialYears 2008-09 to 2012-13 from unpaid dividend account to Investor Education and ProtectionFund (IEPF).

For P.Murali & Co.
Chartered Accountants
Firm Registration No: 007257S
A. Krishna Rao
Partner
Membership No. 020085
UDIN: 21020085AAAAQL6322
Place: Hyderabad
Date: 09-07-2021

Annexure B to the Independent Auditor's Report

Report on the Internal Financial Controls over Financial Reporting under clause (i) ofthe Sub-section 3 of the Section 143 of the Companies Act 2013 (‘The Act')

We have audited the internal financial controls over financial reporting of M/s.Madhucon Projects Limited (‘the company') as of 31st March 2021 in conjunction withour audit of Financial Statements of the company for the year 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). 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 prescribed undersection 143(10) of the Act to the extent applicable to an Audit of Internal FinancialControls both applicable to an audit of Internal Financial Controls and both issued bythe ICAI. These standards and guidance note require that we comply with ethicalrequirements and plan and performed 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 existsand 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 risk ofmaterial misstatement of the Financial Statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion and the company's internal financial control system overfinancial 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 these policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detailed 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 principles and that receipts and expenditures arebeing made only in accordance with authorization of management and directors of theCompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the Company's assets that could have amaterial effect on the Financial Statements.

S.No. Name of the Status 1 The Income Tax Act 1961 Nature of Due DividendDistribution Period Rs. in Lacs
Tax & Interest on it 2011-12 to 2015-16 139.93
2 Professional Tax PT PAYABLE 2011-12 to 2020-21 66.42
3 The Employees Provident funds and Miscellaneous provision act 1952 Provident fund 2013-14 to 2019-20 93.88
4 Sales Tax Sale Tax payable 2013-14 to 2020-21 82.67
5 Works Contract Tax Works ContractTax 2014-15 to 2019-20 601
6 Goods and Service Tax Goods and Service Tax 2020-21 1.25
7 The Income Tax Act 1961 Tax Deducted at Source 2020-21 155.56

b) Details of dues of Income-tax Goods and Services Tax Sales Tax Service TaxCustoms Duty Excise Duty Value Added Tax and CESS which have not been deposited as onMarch 31 2021 on account of disputes are given below:

Name of the Statute Forum where Period to which dispute is pending (Rs.in lakhs) relates Amount involved the amount
The Income Tax Act 1961 CIT (Appeals) Hyderabad 2015-16 to 2017-18 11450.48
Sales Tax Hon'bleHigh Court 2001 to 2005 & 2009-10 687.42
Entry Tax Hon'ble High Court 2015-16 & 2016-17 8.85
Service Tax Settlement Commission 2010-12 1655.75

viii. Based on the examination of books of accounts and related records and accordingto the information and explanations given by the management the company has defaulted inrepayment of dues to financial institutions and banks during the year ( Refer Point (6) ofBasis for Qualified Opinion) as follows:

Delay in Interest payments: Amount in Rs. Lakhs

Name of the Bank 0 to 30 days 31 to 60 days 61 to 90 days 91 to 180 days 181 and above days
Axis Bank 0 0 0 0 35.25
ICICI Bank 0 0 0 0 4107.30
IDBI Bank 0 0 0 0 348.19
Canara Bank 0 0 0 0 193.00
Oriental Bank of Commerce 0 0 0 0 249.40
Bank of India 0 0 0 0 42.13
Kotak Mahindra Bank 0 0 0 0 144.00
State Bank of India 0 0 0 0 135.00
Name of the Financial Institution
SREI Equipment Finance Ltd. 0 0 0 0 508.69

Delay in Interest payments: Amount in Rs.Lakhs

Name of the Bank 0 to 30 days 31 to 60 days 61 to 90 days 91 to 180 days 181 and above days
Bank of India 0 0 0 0 4171.07
Canara Bank 0 0 0 0 5758.00
Axis Bank 0 0 0 0 10671.36
ICICI Bank 0 0 0 0 21217.85
State Bank of India 0 0 0 0 4555.75
Oriental Bank ofCommerce 0 0 0 0 4853.80
Kotak Mahindra Bank 0 0 0 0 4692.26
IDBI 0 0 0 0 7487.70
Name of the Financial Institution
SREI Equipment Finance Ltd. 0 0 0 0 4000.00

The company has not issued any debentures during the year. ix. The Company has notraised any moneys by way of initial public offer further public offer (including debtinstruments) and term loans. x. According to the information and explanations given to usno material fraud by the company or on the company by its officers or employees has beennoticed or reported during the course of our Audit. xi. In view of losses incurred by“the company” and in the absence of prior approval from the lender banks andfinancial Institutions managerial remunerationpaid by the company during the year is inexcess of the limits specified under section 197 read with schedule V of CompaniesAct2013. xii. The Company is not a Nidhi Company. xiii. The Company has entered intotransactions with related parties in compliance with the provisions of Sections 177 and188 of the Act. The details of such related party transactions have been disclosed in thefinancial statements as required under Indian Accounting Standard (Ind AS) 24 RelatedParty Disclosures specified in the Companies (Indian Accounting Standards) Rules 2015 (asamended) under Section 133 of the Act. xiv. The Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review xv. The Company has not entered into non-cash transactions with itsdirectors or persons connected with him during the year. xvi. The Company is not requiredto be registered under section 45-IA of The Reserve Bank of India Act 1934.

For P. Murali& Co
Chartered Accountants
FRN No: 007257S
A Krishna Rao
Partner
Membership No:020085
UDIN: 21020085AAAAQL6322
Place: Hyderabad
Date: 09-07-2021

Annexure A to the Auditors Report

Annexure referred to in Independent Auditors Report to the Members of M/s. MadhuconProjects Limited on the Financial Statements for the year ended 31st March 2021 we reportthat:

i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment.

(b) As explained to us Property Plant and Equipment have been physically verified bythe management at regularintervals; as informed to us no material discrepancies werenoticed on such verification. In our opinion the frequency of verification is reasonable.

( c)According to the information and explanations given to us and on the basis of ourexamination of records of the Company the title deeds of immovable properties are held inthe name of the Company as at the Balance Sheet date. ii. (a) The Inventory has beenphysically verified during the year by the Management and in our opinion the frequency ofverification is reasonable.

(b) In our opinion the procedures of the physical verification of inventory followedby the Management are adequate in relation to the size of the Company and the nature ofits business.

iii. The Company has granted loans unsecured to companies covered in the Registermaintained under Section 189 of the Companies Act 2013. In respect of such loans andhaving regard to the rollover stipulations for loans to certain parties: (a) The terms andconditions of the grant of such loans are in our opinion prima facie not prejudicial tothe Company's interest.

(b) The schedule of repayment of principal and payment of interest has not beenstipulated and hence we are unable to comment as to whether repayment/receipts of theprincipal amount and the interest are regular.

( c) In the absence of stipulated schedule of repayment of principal and payment ofinterest we are unable to comment as to whether there is any amount which is overdue formore than 90 days and whether reasonable steps have been taken by the Company for recoveryof principal amount and interest. iv. The Company has complied with the provision ofsections 185 and 186 of the Act to the extent applicable in respect of loans investmentsguarantees and securities.

v. The Company has not accepted any deposits from the public covered under Section 73to 76 of the Companies Act 2013 and rules framed there under to the extent notified.

vi. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.

vii. According to the information and explanations given to us and based on the recordsof the company examined by us in respect of the Statutory dues: a) There are some delaysin depositing undisputed statutory dues including Provident Fund Employees' StateInsurance Income-tax Sales Tax Goods and Service Tax Value Added Tax (VAT) Cess andother statutory dues applicable to it. Undisputed amounts payable in respect thereofwhich were outstanding for more than six months from the date they became payable are asfollows:

Inherent Limitation of Internal Financial Controls over Financial Reporting

Because of the inherent limitation 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.

Qualified Opinion

In our opinion except for the possible effects of the matter described in the basis forqualified 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 31st 2021 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 P. Murali& Co.
Chartered Accountants
Firm Registration No: 007257S
A Krishna Rao
Partner
Membership No: 020085
UDIN: 21020085AAAAQL6322
Place: Hyderabad
Date: 09-07-2021

.