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Mafatlal Industries Ltd.

BSE: 500264 Sector: Industrials
NSE: MAFATLAIND ISIN Code: INE270B01027
BSE 11:09 | 27 Sep 146.00 2.70
(1.88%)
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141.25

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146.45

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141.25

NSE 05:30 | 01 Jan Mafatlal Industries Ltd
OPEN 141.25
PREVIOUS CLOSE 143.30
VOLUME 658
52-Week high 196.00
52-Week low 74.00
P/E
Mkt Cap.(Rs cr) 204
Buy Price 143.20
Buy Qty 20.00
Sell Price 146.20
Sell Qty 5.00
OPEN 141.25
CLOSE 143.30
VOLUME 658
52-Week high 196.00
52-Week low 74.00
P/E
Mkt Cap.(Rs cr) 204
Buy Price 143.20
Buy Qty 20.00
Sell Price 146.20
Sell Qty 5.00

Mafatlal Industries Ltd. (MAFATLAIND) - Auditors Report

Company auditors report

to the Members of Mafatlal Industries Limited

Report on the Audit of the Standalone financial statements opinion

1. We have audited the accompanying standalone financial statements of MafatlalIndustries Limited ("the Company") which comprise the balance sheet as at March31 2021 the statement of Profit and Loss (including Other Comprehensive Income)statement of changes in equity and statement of cash flows for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information.

2. 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 Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2021 total comprehensive income(comprising of loss and other comprehensive income) changes in equity and its cash flowsfor the year then ended.

Basis for opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor’s Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

emphasis of Matter

4. We draw attention to Note 49 to the standalone financial statements which describesthe management’s assessment of the financial impact and liquidity assessmentconsequent to outbreak of Coronavirus (Covid-19) on the business operations of theCompany. In view of highly uncertain economic environment a definitive assessment of theimpact of the events in the subsequent periods on the balance sheet as of the year end ishighly dependent upon circumstances as they evolve. Our opinion is not modified in respectof this matter.

Key audit matter

5. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

Key audit matter How our audit addressed the key audit matter
Assessment of recoverability of deferred tax assets: Our audit procedures included the following:
Refer Note 36(d) to the standalone financial statements. Evaluation of the design and testing operating effectiveness of Company’s controls relating to the assessment of carrying amount of deferred tax assets the preparation of the forecast and its related inputs / assumptions.
In accordance with its accounting policy the Company recognises Deferred Tax Assets (net) (DTA) on temporary differences and unabsorbed depreciation as it is considered to be recoverable based on the Company’s projected taxable profits in the forecast period. The (net) carrying value of DTA is ` 1072.72 lakhs as at March 31 2021. Reviewed the appropriateness of the Company’s accounting policy in respect of recognizing deferred tax assets on unabsorbed depreciation and temporary differences.
We considered this a key audit matter because significant judgement is required by the Company in determining the recoverability of DTA recognised on unabsorbed depreciation as the realisation of tax benefits is dependent on future taxable profits and there are inherent uncertainties involved in forecasting such profits. Obtained the future taxable profit projections prepared by the management and obtained understanding of process followed and the assumptions used in such preparation.
Assessed the appropriateness of tax rate applied to the taxable profit forecasts.
Considering whether the unabsorbed depreciation on which deferred tax asset is recognised have been assessed by the tax authorities and are available for utilisation in accordance with the provisions of Income- tax Act 1961.
Checked the mathematical accuracy of the underlying calculations of the profit projections.
Reviewed the adequacy of disclosures made in the financial statements with regards to deferred taxes.
Verified the Income tax computation for the current year resulting in a reversal of the deferred tax assets from previous year.
Based on the above procedures the Management’s assessment of recoverability of deferred tax assets was considered to be reasonable.

other Information

6. The Company’s Board of Directors is responsible for the other information. Theother information comprises the information included in the Annual Report but does notinclude the standalone financial statements and our auditor’s report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact.

We have nothing to report in this regard.

Responsibilities of management and those charged with governance for the financialstatements

7. The Company’s Board of Directors is responsible for the matters stated insection 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financialperformance changes in equity 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. 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.

8. 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 theCompany’s financial reporting process.

Auditors’ responsibilities for the audit of the financial statements

9. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditors’ report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

10. As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit.

We also:

Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional 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. Under Section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

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

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 theCompany’s ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors’ report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditors’ report. However future events or conditions may cause theCompany to cease to continue as a going concern.

Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.

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

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

13. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor’s report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication. report onother legal and regulatory requirements

14. 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 of the Act we give in the Annexure B a statement on the matters specifiedin paragraphs 3 and 4 of the Order to the extent applicable.

15. 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 (including Other ComprehensiveIncome) the Statement of Changes in Equity and Statement of Cash Flows dealt with by thisreport 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.

(e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164(2) of theAct. (f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in Annexure A.

(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 43 and 50 to the standalone financialstatements;

(ii) The Company has long-term contracts as at March 31 2021 for which there were nomaterial foreseeable losses. The Company did not have any long-term derivative contractsas at March 31 2021;

(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended March 312021;

(iv) The reporting on disclosures relating to Specified Bank Notes is not applicable tothe Company for the year ended March 31 2021.

16. The Company has paid / provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct. Also refer paragraph 11 of Annexure B.

For Price Waterhouse Chartered Accountants LLP

Firm Registration Number: 012754N / N500016

Jeetendra Mirchandani

Partner

Membership Number: 048125

UDIN: 21048125AAAACK4043

Place: Pune

Date: May 26 2021

Annexure A to Independent Auditors’ Report

Referred to in paragraph 15(f) of the Independent Auditors’ Report of even date tothe members of Mafatlal Industries Limited on the standalone financial statements for theyear ended March 31 2021

Report on the Internal Financial Controls with reference to financial statements underClause (i) of Sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls with reference to financialstatements of Mafatlal Industries Limited ("the Company") as of March 31 2021in conjunction with our audit of the standalone financial statements of the Company forthe year ended on that date.

Management’s Responsibility for Internal Financial Controls

2. The Company’s management is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued 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 Act.

Auditors’ responsibility

3. Our responsibility is to express an opinion on the Company’s internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing deemedto be prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of internal financial controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls with reference to financial statementswas established and maintained and if such controls operated effectively in all materialrespects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor’sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

5. 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 with reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

6. A company’s internal financial controls with reference to financial statementsis a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A company’s internalfinancial controls with reference to financial statements includes those policies andprocedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company’s assets that could havea material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to financialstatements

7. Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate. opinion

8. In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 31 2021 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. Also refer paragraph 4 of ouraudit report.

For Price Waterhouse Chartered Accountants LLP

Firm Registration Number: 012754N / N500016

Jeetendra Mirchandani

Partner

Membership Number: 048125

UDIN: 21048125AAAACK4043

Place: Pune

Date: May 26 2021

Annexure B to Independent Auditors’ Report

Referred to in Paragraph 14 of the Independent Auditors’ Report of even date tothe members of Mafatlal Industries Limited on the standalone financial statements as ofand for the year ended March 31 2021

i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the Management according to a phasedprogramme 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 the nature of itsassets.

Pursuant to the programme a portion of the fixed assets has been physically verifiedby the Management during the year and no material discrepancies have been noticed on suchverification.

(c) The title deeds of immovable properties other than self-constructed properties asdisclosed in Note 3 4 and 17 on Property Plant and Equipment Investment Properties andAssets held for sale respectively to the standalone financial statements are held in thename of the Company except for a leasehold land of gross and net book value of ` 0.08Lakhs where the Company is in process of getting expired lease renewed.

ii. The physical verification of inventory excluding stocks with third parties havebeen conducted at reasonable intervals by the Management during the year. In respect ofinventory lying with third parties these have substantially been confirmed by them. Thediscrepancies noticed on physical verification of inventory as compared to book recordswere not material.

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 Act. Therefore the provisions of Clause 3(iii) 3(iii)(a) (iii)(b)and (iii)(c) of the said Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013in respect of the loans and investments made and guarantees and security provided by it.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.

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 havenot however made a detailed examination of the records with a view to determine whetherthey are accurate or complete.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion except for dues in respect of interest onemployees’ state insurance and duty of excise the Company is generally regular indepositing undisputed statutory dues in respect of income tax and goods and service taxthough there has been a slight delay in a few cases and is regular in depositingundisputed statutory dues including provident fund employees’ state insurance andother material statutory dues as applicable with the appropriate authorities. AlsoRefer Note 43(f) to the standalone financial statements regarding management’sassessment on certain matters relating to provident fund.

The extent of the arrears of statutory dues outstanding as at March 31 2021 for aperiod of more than six months from the date they became payable are as follows:

name of the statute nature of dues Amount (` in lakhs) Period to which the amount relates due date date of payment
Employee’s State Insurance Act 1948 Interest on ESIC 40.85 2000-2007 and April 2008 to May 2010 2000 to 2007 and 2008 to 2010 Not paid
Central Excise Act 1944 Central Excise 3.44 April 1986 to October 1986 May 1995 to December 1995 1986 and 1995 Not paid

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of goods and service tax which have not beendeposited on account of any dispute. The particulars of dues of income tax sales taxservice tax duty of customs duty of excise duty and value added tax as at March 31 2021which have not been deposited on account of a dispute are as follows:

name of the statute nature of dues Amount unpaid ( ` in lakhs) # Period to which the amount relates Forum where the dispute is pending
Central Excise Act 1944 Central Excise 13.41 1998-2000 2002-2003 Supreme Court
Central Excise Act 1944 Central Excise 39.43 1989-1990 to 2003-2004 Commissioner of Central Excise (Appeals)
Central Excise Act 1944 Central Excise 8.11 1999-2000 Commissioner of Central Excise
Central Excise Act 1944 Central Excise 81.33 1997-1999 Appellate Tribunal

 

name of the statute nature of dues Amount unpaid ( ` in lakhs) # Period to which the amount relates Forum where the dispute is pending
Central Excise Act 1944 Central Excise 2914.72 2007-2008 to 2009-2010 Gujarat High Court
Central Excise Act 1944 Central Excise 1.41 2006-2011 Assistant Commissioner of Central Excise
Customs Act 1944 Customs Duty 4.79 1989-1990 to 1999-2000 Joint Director General of Foreign Trade
Maharashtra Value Added Tax Sales Tax 23.22 1999-2000 Joint Commissioner of Sales Tax (Appeals) II
Central Sales Tax Act 1956 Sales Tax 0.92 1999-2000 Joint Commissioner of Sales Tax (Appeals) II
Finance Act 1994 Service Tax 0.70 1997-1999 Appellate Tribunal
Income Tax Act 1961 Income Tax 138.50 Assessment Year 1997-1998 Bombay High Court
Income Tax Act 1961 Income Tax 1774.50 Assessment Years 1997-1998 1998-1999 2012-2013 and 2015-2016 Commissioner of Income Tax

# Net of amount paid under protest.

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 financial institution or bank or Government as at the balance sheet date. TheCompany has not issued any debentures.

ix. In our opinion and according to the information and explanations given to us themoney raised by way of term loan have been applied for the purposes for which they wereobtained. The Company has not raised any money by way of initial public offer and furtherpublic offer (including debt instruments).

x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

xi. The Company has paid / provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct. [Also refer paragraph 16 of our main audit report]

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the standalone financial statements as required underIndian Accounting Standard (Ind AS) 24 Related Party Disclosures specified under Section133 of the Act.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non-cash transactions with its directors orpersons connected with him as prescribed under section 192 of the Act. Accordingly theprovisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

For Price Waterhouse Chartered Accountants LLP

Firm Registration Number: 012754N / N500016

Jeetendra Mirchandani

Partner

Membership Number: 048125

UDIN: 21048125AAAACK4043

Place: Pune

Date: May 26 2021

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