Maharashtra Seamless Ltd.
|BSE: 500265||Sector: Metals & Mining|
|NSE: MAHSEAMLES||ISIN Code: INE271B01025|
|BSE 00:00 | 28 Feb||321.15||
|NSE 00:00 | 28 Feb||320.30||
|Mkt Cap.(Rs cr)||2,152|
|Mkt Cap.(Rs cr)||2151.70|
Maharashtra Seamless Ltd. (MAHSEAMLES) - Auditors Report
Company auditors report
To the Members of Maharashtra Seamless Limited
1. We have audited the accompanying Ind AS financial statements of MAHARASHTRA SEAMLESS LIMITED (the Company) which comprise the Balance Sheet as at 31st March 2019 the Statement of Profit and Loss (including Other Comprehensive Income) the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended on that date including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us the aforesaid Ind AS financial statements give the information required by the Companies Act 2013 (the Act) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31st 2019 its profit and its cash flows for the year ended on that date.
Basis for Opinion
2. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act 2013. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Ind AS Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the Ind AS financial statements under the provisions of the Companies Act 2013 and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics.
3. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matters
4. We draw attention to the following matters included in the Notes to the financial statements:
a. Note No. 2.37 which states that the Company has given an advance to the Resolution Professional for acquisition of United Seamless Tubulaar Pvt. Ltd. in accordance with NCLT Order dated 21.01.2019. However on the Company has been ordered to deposit additional amount by the NCALT. The Company has filed an appeal before the Supreme Court and the matter is sub-judice. Accordingly United Seamless Tubulaar Pvt. Ltd. has not been considered as a subsidiary.
b. Note No. 2.36 which relates to impairment of loans given and diminution in investments made by the Company in a Mining Asset. The subsidiary which had made investments in the Mining Asset has partially diminished its investment and the Company accordingly has diminished its investments and impaired the loan provided. The Company has also therefore not recognised any income on such loan given.
Our opinion is not modified in respect of these matters.
Key Audit Matters
5. Key Audit Matters are those matters that in our professional judgment were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
6. The Company's Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis; Board's Report including Annexures to Board Report Business Responsibility Report Corporate Governance and Shareholders' Information but does not include the standalone financial statements and our auditor's report thereon. The aforesaid documents are expected to be made available to us after the date of this auditor's report.
7. Our opinion on the Ind AS financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
8. In connection with our audit of the financial statements our responsibility is to read the other information identified above when it becomes available and in doing so consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
9. When we read the aforesaid documents if we conclude that there is a material misstatement therein we are required to communicate the matter to those charged with governance.
Management's Responsibility for Ind AS Financial Statements
10. The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act 2013 (the Act) with respect to the preparation of these Ind AS financial statements that give a true and fair view of the financial position financial performance changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India including the accounting Standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the Ind AS financial statement that give a true and fair view and are free from material misstatement whether due to fraud or error.
11. In preparing the Ind AS financial statements management is responsible for assessing the Company's ability to continue as a going concern disclosing as applicable matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.
12. The Board of Directors are also responsible for overseeing the company's financial reporting process.
Auditor's Responsibility for the Audit of the Ind AS Financial Statements
13. Our objectives are to obtain reasonable assurance about whether the Ind AS financial statements as a whole are free from material misstatement whether due to fraud or error and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if individually or in the aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of these Ind AS financial statements.
14. As part of an audit in accordance with SAs we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the Ind AS financial statements whether due to fraud or error design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal control.
Obtained an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3) (i) of the Companies Act 2013 we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and based on the audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability 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 in the Ind AS financial statements or if such disclosures are inadequate to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the Ind AS financial statements including the disclosures and whether the Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
15. Materiality is the magnitude of misstatements in the financial statements that individually or in aggregate makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.
Report on Other Legal and Regulatory Requirements
16. 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-A a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
17. 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 best of our knowledge and belief were necessary for the purposes of our audit.
(b) Proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the units not visited by us.
(c) The Balance Sheet the Statement of Profit and Loss the Cash Flow Statement and the Statement of Changes in Equity dealt with by this report are in agreement with the books of account.
(e) On the basis of the written representations received from the directors as on 31st March 2019 taken on record by the Board of Directors none of the directors is disqualified as on 31st March 2019 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls refer to our separate Report in Annexure B.
(g) With respect to the other matters to be included in the Auditor's Report in accordance with the requirements of section 197(16) of the Act as amended: In our opinion and to the best of our information and according to the explanations given to us the Company complied with the provisions of section 197 in respect of remuneration granted to Directors during the year.
(h) With respect to the other matters 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 and according to the explanations given to us:
a. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note No. 2.27 [except Note No. 2.27(a & b)].
b. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
c. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT
To the Members of Maharashtra Seamless Limited
[Referred to in paragraph 16 of the Independent Auditors' Report of even date]
1. (a) The Company maintained proper records showing full particulars including quantitative details and situation of fixed assets. (b) As explained to us the company has a system of verifying all its major Property Plant and Equipments over a period of three years. The Property Plant and Equipments so scheduled for verification during this year have been physically verified. The discrepancies noticed on such verification were not material and have been properly dealt with in the books of accounts.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company the title deeds of immovable properties are held in the name of the Company.
2. The inventory has been physically verified by the management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account. In our opinion the frequency of verification is reasonable.
3. In respect of loans secured or unsecured granted by the Company to the other parties covered in the register maintained under section 189 of the Companies Act 2013 (`the Act').
(a) The Company has granted loans to five companies. The maximum amount involved during the year was Rs. 26366.18 Lakhs. The year-end balance of loan granted to such companies was Rs. 24759.83 Lakhs.
(b) In respect of loans granted by the company the interest payment are regular except refer note no. 2.41 to the financial statement and the principal amounts are being received/renewed on due dates.
(c) There are no overdue amounts in respect of the loan granted to a body corporate listed in the register maintained under Section 189 of the Act.
4. According to the information and explanations given to us and the records of the Company examined by us in respect of loans investments guarantees and security provisions of section 185 and 186 of the companies Act 2013 have been complied with.
5. The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the rules framed there under.
6. We have broadly reviewed the books of accounts maintained by the Company pursuant to the order made by the Central Government for the maintenance of cost records under section 148(1) of the Act and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not however carried out any detailed examination of such records and accounts.
7. (a) According to the information and explanations given to us and the records of the Company examined by us in our opinion the Company is generally regular in depositing the undisputed statutory dues including provident fund employees' state insurance income-tax goods and services tax duty of customs cess and any other statutory dues as applicable with the appropriate authorities.
(b) According to the records of the Company the dues of Income Tax Sales Tax Service Tax Duty of Custom Duty of Excise Value Added Tax and Cess which have not been deposited on March 31st 2019 on account of any dispute are as follows:
8. According to the information and explanation given to us and the records of the Company examined by us the Company has not defaulted in repayment of dues of any of loans or borrowings to any banks.
The Company has neither taken any loan from financial institutions or Government nor issued any debentures.
9. In our opinion and according to the information and explanation given to us on an overall basis the money raised by Company during the year by way of term loan have been applied for the purpose for which they were obtained.
10. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us we have neither come across any instance of fraud on or by the Company noticed or reported during the year nor have we been informed of such case by the management.
11. According to the information and explanation given to us and based on our examination of the records of the company the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provision of section 197 read with Schedule V to the Act 12. The related statutes are not applicable as the Company is not a Nidhi Company.
13. According to the information and explanations given to us and the records of the Company examined by us transactions with related parties are in compliance with Sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in Note 2.40 of the financial statements as required by the applicable Ind AS.
14. According to the information and explanations provided to us and on an overall examination of the balance sheet the Company has neither made any preferential allotment of shares nor fully or partly convertible debentures during the year under audit.
15. According to the information and explanations given to us and the records of the Company examined by us the Company has not entered into any non-cash transactions with any director of the Company and the holding Company or persons connected with them involving acquisition of assets by or from them for consideration other than cash.
16. In our opinion and according to the information and explanations given to us not being a non-banking financial company the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT
To the Members of Maharashtra Seamless Limited
[Referred to in paragraph 17 (f) of the Independent Auditors' Report of even date]
Report on the Internal Financial Control under Clause (i) of Sub -sections 3 of Section 143 of the Companies Act 2013(the Act)
1. We have audited the internal financial controls over financial reporting of MAHARASHTRA SEAMLESS LIMITED (the Company) as of 31st March 2019 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Control
2. The Company's management is responsible for establishing and maintaining internal financial control based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the Guidance Note) issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business including adherence to Company's policies the safeguarding of its assets the prevention and detection of frauds and errors the accuracy and completeness of the accounting records and the timely preparation of reliable financial information as required under the Companies Act 2013.
3. Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standard on Auditing issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 to the extent applicable. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting includes obtaining an understanding of internal financial control over financial reporting assessing the risk that a material Weakness exists and testing and evaluating the design and operating effectiveness of internal controls based on the assessed risk. The procedure selected depends on the auditor's judgment including the assessment of the risk of material misstatement of the financial statement whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting.
Meaning of Internal Financial Control over Financial Reporting
6. A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that
1) pertain to the maintenance of the records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;
2) provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditure of the company are being made only in accordance with authorization of management and directors of company; and
3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition use or disposition of the company's assets that could have a material effect on the financial statement.
Inherent Limitations of Internal Financial Control over Financial Reporting
7. Because of inherent limitation of internal financial control over financial reporting including the possibility of collusion or improper management override of controls material misstatements due to errors or fraud may occur and not be detected. Also projections of any evaluations of the internal financial control over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
8. In our opinion the Company has in all material respect an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2019 based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Control Over Financial Reporting issued by ICAI.