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Mahalaxmi Rubtech Ltd.

BSE: 514450 Sector: Industrials
NSE: N.A. ISIN Code: INE112D01035
BSE 15:23 | 29 Jul 64.50 -0.10
(-0.15%)
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64.45

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65.70

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NSE 05:30 | 01 Jan Mahalaxmi Rubtech Ltd
OPEN 64.45
PREVIOUS CLOSE 64.60
VOLUME 6731
52-Week high 70.10
52-Week low 25.55
P/E 14.08
Mkt Cap.(Rs cr) 86
Buy Price 64.50
Buy Qty 670.00
Sell Price 65.25
Sell Qty 210.00
OPEN 64.45
CLOSE 64.60
VOLUME 6731
52-Week high 70.10
52-Week low 25.55
P/E 14.08
Mkt Cap.(Rs cr) 86
Buy Price 64.50
Buy Qty 670.00
Sell Price 65.25
Sell Qty 210.00

Mahalaxmi Rubtech Ltd. (MAHALAXMIRUBTEC) - Auditors Report

Company auditors report

TO THE MEMBERS OF MAHALAXMI RUBTECH LIMITED

Report on the audit of Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of MAHALAXMI RUBTECHLIMITED ("the Company") which comprise of the Balance Sheet as at March 312020 and the statement of profit and loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year then ended anda summary of significant accounting policies and other explanatory information(hereinafter referred to as "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 Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at 31 March 2020 and its profit totalcomprehensive income its cash flows and the changes in equity for the year ended on thatdate. Basis for Opinion

We conducted our audit of the Standalone Financial Statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibility for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of the Standalone Financial Statements under the provisions of theAct and the Rules made thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence obtained by us is sufficient and appropriate to provide abasis for our audit opinion on the Standalone Financial Statements.

Emphasis of Matter

We draw attention to Note 42 to Standalone Ind AS Financial Statements which describesthe uncertainties and the impact of Covid-19 pandemic on the Company's operations andresults as assessed by the management. Our opinion is not modified in respect of thismatter. Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance 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 FinancialStatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

We have determined the matters described below to be the key audit matters to becommunicated in our report.

Key Audit Matters How our audit addressed the key audit matter
Estimation of provision for sales returns and discounts and volume rebates in the financial statements. In this regard our audit procedures included:
Revenue from sale of products is presented net of returns discounts and volume rebates in the financial statements. Understanding the policies and procedures applied to estimate the sales returns discounts and volume rebates including evaluation and testing of the design and operating effectiveness of controls related to these estimates.
The management determines the returns discounts and rebates on the basis of various factors such as the current and expected operating environment sales returns variability and expected achievement of targets against various ongoing schemes floated. Obtained management's calculations for the respective estimates and assessed the reasonableness of assumptions used by the management in determining the amount of estimates based on understanding of the market conditions.
We determined the estimates associated with sales returns discounts and volume rebates on sale of products as a key audit matter in view of it having significant impact on the recognized revenue and the involvement of management judgment in estimating the amounts at which these are expected to be settled. Assessed the reasonableness of estimates made by the management in the past by comparing the provisions recognized in the earlier financial years with their subsequent settlement ratio analysis of discounts volume rebates and sales returns as a percentage of sale of last few years.
Verified if any credit notes were issued and/or adjustments made after the balance sheet date and their impact if any on the reported amounts.
Based on the above procedures performed the estimates made by the management in respect of sales returns and discounts and rebates on sales were considered to be reasonable.
2. Physical verification of inventories
The Company's inventories include raw materials semifinished goods finished goods stock-in-trade stores spares and fents & rags. Since it was impracticable for us as auditors to attend in the physical verification of inventories our alternative audit procedures to obtain sufficient appropriate audit evidence regarding the existence and condition of inventories include the following:
The Company has adequate inventory records and system as also internal controls over inventory movements and records. The Company has established procedures to carry out physical inventories during the year as also at the year-end. Accordingly physical verification of inventories was carried out during the year and details thereof were provided to the auditors. Due to various restrictions imposed under COVID-19 outbreak physical verification could not be carried out at the year-end but the same was carried out subsequent to the year-end. • Evaluated the control design in respect of inventory process and testing (encompass the processes around inventory movements) whether such controls have operated effectively during the period of audit;
• Obtained details/documents of existence and condition of physical inventories as carried out by the management during the year and subsequent to the year-end as the case may be;
At the time of such subsequent verification it was impracticable for the auditors to physically attend the inventory counting and hence alternative audit procedures were performed. • The count was carried for all items of inventories on sample basis and in some cases of on the best judgement basis as also on the basis of previous experience of conducting inventory count;
This matter is considered to be key audit matter given the circumstances of physical verification of inventories under COVID-19 vis-a-vis non-COVID-19 scenario. [Refer Note "42" of the standalone financial statements] • Rollback procedures were applied to arrive at the inventories as verified by the Company as at the year-end;
• Related documents were verified that indirectly support and corroborate the existence of inventories at the year-end;
• Employed appropriate cut-off procedures as also verified documentary records for inventories in-transit.

Information other than the Standalone Financial Statements and Auditor's report thereon

The Company's Board of Directors is responsible for the other information. The otherinformation obtained at the date of this auditor's report is information included in theDirectors' Report including the Annexures to the Directors' report but does not includethe 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 Standalone Financial Statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.If based on the work we have performed on the other information that we obtained prior tothe date of this auditor's report we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

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 Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the Standalone Financial Statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

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

Auditor's Responsibility for the Audit of the Standalone 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 financial statements.

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

i) 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.

ii) Obtain an understanding of internal financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

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

iv) 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 existswe are required to draw attention in our auditor's report to the related disclosures inthe 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'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

v) 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.

Materiality is the magnitude of misstatements in the Standalone Financial Statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the Standalone Financial Statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the Standalone Financial Statements.

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.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Standalone Financial Statementsof the current period and are therefore the key audit matters. We describe these mattersin our 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 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 subsection (11) of the section 143of the Act we give in the Annexure"A" a statement on the matters specified inthe paragraph 3 and 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 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 Statement of Changes in Equity and Statement of Cash Flow dealt with by thisReport are in agreement with the books of account;

(d) In our opinion the aforesaid Standalone Financial Statements comply with theIndian Accounting Standards specified under Section 133 of the Act read with relevantrules issued there under

(e) On the basis of written representations received from the directors as on March 312020 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 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 over financialreporting of the Company and the operating effectiveness of such control refer to ourseparate report in the Annexure-B. Our report expresses an unmodified opinion.

(g) With respect to the matters to be included in the Auditor's Report in accordancewith the requirements of section 197(16) of the Act as amended in our opinion and to thebest of our information and according to the explanations given to us the remunerationpaid / provided by the Company to its directors during the year is in accordance with theprovisions of section 197 of the Act.

(h) With respect to other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014as amended in our opinionand to the best of our information and according the explanations given to us:

i. The company has disclosed the impact of pending litigations on its financialposition in its Standalone Financial Statements.

ii. The company has made provision as required under the applicable law or IND AS formaterial foreseeable losses if any on long term contracts including derivativecontracts.

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 31stMarch 2020.

For P.C. BOTHRA & CO.
Chartered Accountants.
Firm Registration No. 306034E
(P. K. BOTHRA)
Partner.
Ahmedabad: 6th July 2020. M. No. 400385

"Annexure A" to the Independent Auditors' Report on the Standalone FinancialStatements of Mahalaxmi Rubtech Limited

Referred to in paragraph 1 under the heading 'Report on Other Legal & RegulatoryRequirement' of our report of even date to the Standalone Financial Statements of theCompany for the year ended March 31 2020:

1) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;

(b) According to the information and explanations given to us the company has adopteda policy of physical verification of the fixed assets in a phased manner designed tocover all the items over a period of three years which in our opinion is reasonablehaving regard to the size of the company and nature of its business. Pursuant to theprogram a portion of the fixed asset has been physically verified by the managementduring the year and no material discrepancies between the books records and the physicalfixed assets have been noticed.

(c) According to the information and explanations given 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.

2) (a) According to the information and explanations given to us the inventories havebeen physically verified by the management during the year. In our opinion the frequencyof verification is reasonable.

(b) According to the information and explanations given to us the discrepanciesnoticed on physical verification of the inventory as compared to books records were notmaterial and have been properly dealt with in the books of account.

3) According to the information and explanations given to us and in our opinion theCompany has granted unsecured and interest free loan to its subsidiary companies onlycovered in the Register maintained under section 189 of the Act.

a. The terms and conditions of the grant of such loans are not prima facie prejudicialto the interest of the company;

b. The principal amount of the loan have been repaid as stipulated.

4) According to the information and explanations given to us and in our opinion thecompany has complied with the provisions of section 185 and I86 of the Companies Act 2013In respect of loans investments guarantees and security.

5) According to the information and explanations given to us the Company has notaccepted any deposits within the meaning of Section 73 to 76 of the Act and the Companies(Acceptance of Deposits) Rules 2014 (as amended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

6) We have broadly reviewed the maintenance of cost records by the company as specifiedby the Central Government under sub-section (1) of Section 148 of the Companies Act 2013and are of the opinion that prima facie the prescribed accounts and records have beenmade and maintained by the company. However we have not made a detailed examination ofthe cost records with a view to determine whether they are accurate or complete.

7) (a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company has been generally regularin depositing undisputed statutory dues including Provident Fund Employees StateInsurance Income-Tax Sales tax Goods & Service Tax Duty of Customs Duty ofExcise Value added Tax Cess and any other statutory dues with the appropriateauthorities. According to the information and explanations given to us no undisputedamounts payable in respect of the above were in arrears as at March 31 2020 for a periodof more than six months from the date they become payable.

(b) According to the information and explanation given to us the dues of income taxsales tax service tax duty of customs duty of excise value added tax outstanding onaccount of any dispute and forum where dispute is pending are as under:

Name of the Statute Amount involved (Rs.In lakhs) Forum where dispute is pending
Service Tax 2.09 CESTAT

8) In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of dues to banks and financial institutions.The Company has not taken any loan from the government and has not issued any debentures.

9) Based upon the audit procedures performed and the information and explanations givenby the management the company has not raised moneys by way of initial public offer orfurther public offer including debt instruments. To the best of our knowledge and beliefand according to the information and explanations given to us the term loans obtainedduring the year were prima facie applied by the company for the purpose for which theywere obtained other than temporary deployment pending application.

10) Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or fraud on the company byits officers or employees has been noticed or reported during the year.

11) Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act;

12) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 3 (xii) of the Order are not applicable to the Company.

13) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable Ind AS.

14) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has made preferential allotment of equity sharesduring the year under review. We further report that the company has complied with therequirement of Section 42 of the Companies Act2013 and the amounts raised have beenapplied by the company during the year for which the funds were raised other thantemporary deployment pending utilization.

15) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.

16) In our opinion the company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) ofthe Order are not applicable to the Company and hence not commented upon.

For P.C. BOTHRA & CO.
Chartered Accountants.
Firm Registration No. 306034E
(P. K. BOTHRA)
Partner.
Ahmedabad: 6th July 2020. M. No. 400385

"Annexure B" to the Independent Auditors' Report on the Standalone FinancialStatements of Mahalaxmi Rubtech Limited

(Referred to in paragraph 1(f) under "Report on other legal and regulatoryrequirements" of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of MAHALAXMIRUBTECH LIMITED ("the Company") as of March 31 2020 in conjunction with ouraudit of the Standalone Financial Statements of the Company for the year ended on thatdate.

Management's Responsibility for the 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 Companies Act 2013.

Auditors' 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 issued by ICAI andprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial 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 Standalone Financial Statements whether due to fraud orerror.

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 theStandalone 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 Ind AS financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the Standalone 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.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company have in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2020 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the ICAI.

For P.C. BOTHRA & CO.
Chartered Accountants.
Firm Registration No. 306034E
(P. K. BOTHRA)
Partner.
Ahmedabad: 6th July 2020. M. No. 400385

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