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Mahamaya Steel Industries Ltd.

BSE: 513554 Sector: Metals & Mining
NSE: MAHASTEEL ISIN Code: INE451L01014
BSE 00:00 | 24 Jan 90.75 3.80
(4.37%)
OPEN

85.55

HIGH

91.25

LOW

85.55

NSE 00:00 | 24 Jan 90.35 3.70
(4.27%)
OPEN

86.70

HIGH

90.95

LOW

85.05

OPEN 85.55
PREVIOUS CLOSE 86.95
VOLUME 16711
52-Week high 221.00
52-Week low 73.80
P/E 25.07
Mkt Cap.(Rs cr) 123
Buy Price 90.75
Buy Qty 100.00
Sell Price 91.25
Sell Qty 106.00
OPEN 85.55
CLOSE 86.95
VOLUME 16711
52-Week high 221.00
52-Week low 73.80
P/E 25.07
Mkt Cap.(Rs cr) 123
Buy Price 90.75
Buy Qty 100.00
Sell Price 91.25
Sell Qty 106.00

Mahamaya Steel Industries Ltd. (MAHASTEEL) - Auditors Report

Company auditors report

To the Members of

MAHAMAYA STEEL INDUSTRIES LIMITED

Report on the Audit of the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of MahamayaSteel Industries Limited ('the Company') which comprise the balance sheet as at 31 March2019 the statement of profit and loss (including other comprehensive income) thestatement of cash flows and the statement of changes in equity for the year then ended anda summary of the significant accounting policies and other explanatory information (hereinafter referred to as "standalone Ind AS financial statements.

Management's Responsibility for the Standalone Ind AS 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 standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder Section 133 of the Act read with relevant rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS FinancialStatements based on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS Financial Statements.

Basis for qualified opinion

(i) The company has recognized electricity duty receivable amount of Rs. 1.07 Crore bythe way of reversing electricity duty expenditure for the year; the company has notprovided any sanction from the competent authority(CSIDC); in the absence of anyreasonable certainty of the ultimate collection the receivable amount is not in line withthe Indian accounting standard (ind AS-18) (Revenue Recognition) of ICAI. The company hasbeen following the same procedure for the earlier years which is having a cumulativeeffect of receivable balance of Rs. 11.06 crores. Had the company would not have beenrecognized the same receivable during the year the profit of the company would have beenreduced to the extent of Rs. 1.07 crores and the cumulative reduction in the receivable(current Assets) and share holder's fund to the extent of 11.06 crores for the year.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thefinancial position of the Company as at 31 March 2019 and its financial performanceincluding other comprehensive income its cash flows and the changes in equity for theyear ended on that date.

Emphasis of matters

We draw attention to the following matters in the notes to the financial statements;

(i) The management need to improve the effectiveness and efficiency of internal controlof the company regarding the physical verification of inventories Parties confirmationrecoveries of old dues and related party transactions.

(ii) Stores inventory accounting and physical verification system are not adequate.Provision for slow moving and non moving inventory has not been made.

Our opinion in not modified in respect of these matters.

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 in terms of Section 143(11) of the Act we give inAnnexure "A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

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 the Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account.

d) In our opinion except as per the above paragraph the aforesaid standalone Ind ASFinancial Statements comply with the Indian Accounting Standards prescribed under Section133 of the Act.

e) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312019 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 controls refer to ourseparate report in "Annexure B".

g) With respect to the other matters to be included in the Auditor's 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 standalone Ind AS Financial Statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For K P R K & ASSOCIATES
Chartered Accountants
FRN : 103051W
CA. Swapnil M. Agrawal
Partner M. No. : 121269
9371455299 swapnilmagrawal@gmail.com
Raipur 28th May 2019

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone Ind AS financial statements for the year ended 31 March 2019 we reportthat:

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

(b) As explained to us the Company has a programme for physical verification of fixedassets at periodic intervals.. In our opinion the period of verification and the processneeds to be strengthened

(c) The title deeds of immovable properties are held in the name of the Company.

ii. The Physical Verification of the inventory has been conducted at reasonableintervals by the management. In our opinion the period of verification and the processneeds to be strengthened

iii. The Company has granted advances for purchase of raw materials to two partiescovered in the register maintained under section 189 of the Act.

a. The terms and conditions of the grant of such loans/advances are not prejudicial tothe company's interest;

b. The payment of principal amount and interest are regular.

c. There is no overdue amount in respect of loans granted to the party listed in theregister maintained under section 189 of the Act.

iv. In our opinion and according to the information and explanations given to us andthe records examined by us in respect loans investments and guarantees provisions ofthe section 185 and 186 of the Companies Act 2013 have been complied with except in caseof transaction in ordinary course of purchase and sale of materials.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted any Deposits from the public and hence the directives issued bythe Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevantprovisions of the Act and the Rules framed there under are not applicable.

vi. We have broadly reviewed the books of account maintained by the Company pursuant tothe Rules made by the Central Government of India for maintenance of cost records undersub section (1) of section 148 of the Act and are of the opinion that prima facie theprescribed accounts and records have generally been made and maintained. We have nothowever made a detailed examination of the records with a view to examine whether theyare accurate and complete.

vii. (a) According to the information and explanations given to us and the recordsexamined by us the Company is generally regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Sales Tax Service TaxDuty of Customs Duty of Excise Value Added Tax Cess and any other statutory dues withthe appropriate authorities wherever applicable and there are no such outstanding dues asat March 312019 for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us and the records examinedby us there are no dues of Income Tax Sales Tax Service Tax Duty of Customs Duty ofExcise and Value added tax outstanding on account of any dispute except:

Name of the No. Statute Nature of Dues Amount in Lacs Period Forum where dispute is pending
1 Income Tax Act 1961 TDS 17.12 2008-09 Assistant Commissioner of Income Tax Raipur
2 Income Tax Act 1961 TDS 4.18 2009-10 Assistant Commissioner of Income Tax Raipur
3 Income Tax Act 1961 TDS 113.36 2010-11 Assistant Commissioner of Income Tax Raipur
4 Income Tax Act 1961 Income Tax 50.26 2011-12 Commissioner of Income Tax(A) Raipur
5 Income Tax Act 1961 TDS 2.77 2011-12 Assistant Commissioner of Income Tax Raipur
6 Income Tax Act 1961 Income Tax 235.92 2012-13 Income Tax Appellate
7 Tribunal Income Tax Act 1961 Income Tax 819.54 2014-15 Commissioner of Income Tax(A) Raipur
8 Income Tax Act 1961 TDS 5.14 2015-16 Assistant Commissioner of Income Tax Raipur
9 Income Tax Act 1961 Income Tax 229.96 2016-17 Commissioner (Appeal) Raipur
10 Income Tax Act 1961 Income Tax 2.89 2010-11 CIT(A) Raipur
11 Income Tax Act 1961 Income Tax 945.67 2013-14 Income Tax Appellate Tribunal
12 Income Tax Act 1961 Income Tax 4.87 2012-13 CIT(A) Raipur
13 Income Tax Act 1961 Income Tax 374.02 2009-10 Income Tax Appellate Tribunal
14 Income Tax Act 1961 Income Tax 834.18 2010-11 Income Tax Appellate Tribunal
15 Income Tax Act 1961 Income Tax 554.24 2011-12 Income Tax Appellate Tribunal
16 Central Excise Act 1944 Excise Duty 18.39 2011-12 Assistant Commissioner Raipur
17 Central Excise Act 1944 Excise Duty 30.00 2012-13 Supreme Court
Total 4242.53

viii. According to the information and explanations given to us and based on thedocuments and records produced to us the Company has not defaulted in repayment of duesto banks. The Company does not have dues to financial institutions government ordebenture holders.

ix. The Company has not raised money through initial public offer or further publicoffer and term loans hence the provisions of paragraph 3 (ix) of the Order are notapplicable.

x. In our opinion and according to the information and explanations given to us nofraud by the Company or on the Company by its officers or employees has been noticed orreported during the year. Therefore the provisions of clause 3(x) of the Companies(Auditor's Report) Order 2016 are not applicable to the company.

xi. In our opinion and according to the information and explanations given to us themanagerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule- V to the CompaniesAct.

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014. are notapplicable to it. Therefore the provisions of clause 3(xii) of the Companies (Auditor'sReport) Order 2016 are not applicable to the company.

xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Section 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under AccountingStandard AS) 18 Related Party Disclosures specified under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2014.

xiv. The company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Therefore theprovisions of clause 3(xiv) of the Companies (Auditor's Report) Order 2016 are notapplicable to the company.

xv. The Company has not entered into any non-cash transactions as referred in Section192 of the Act with its directors or persons connected with him. Therefore the provisionsof clause 3(xv) of the Companies (Auditor's Report) Order 2016 are not applicable to thecompany.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Therefore the provisions of clause 3(xvi) of the Companies(Auditor's Report) Order 2016 are not applicable to the company.

For K P R K & ASSOCIATES
Chartered Accountants
FRN : 103051W
CA. Swapnil M. Agrawal
Partner M. No. : 121269
9371455299 swapnilmagrawal@gmail.com
Raipur 28th May 2019

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of MAHAMAYASTEEL INDUSTRIES LIMITED ("the Company") as of March 312019 in conjunction withour audit of the standalone Ind AS Financial Statements of the Company for the year endedon 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 Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India(ICAI). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required 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 and the Standards on Auditing issued by ICAI and deemed to beprescribed 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 over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the Standalone Ind AS Financial Statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of Standalone Ind AS Financial Statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of StandaloneInd AS Financial Statements in accordance with generally accepted accounting principlesand that receipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the StandaloneInd AS 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 except the Physical verification of inventories and related partytransactions the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31 2019 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For K P R K & ASSOCIATES
Chartered Accountants
FRN : 103051W
CA. Swapnil M. Agrawal
Partner M. No. : 121269
9371455299 swapnilmagrawal@gmail.com
Raipur 28th May 2019