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Maithan Alloys Ltd.

BSE: 590078 Sector: Metals & Mining
NSE: MAITHANALL ISIN Code: INE683C01011
BSE 00:00 | 12 May 797.80 24.45
(3.16%)
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785.95

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809.95

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NSE 00:00 | 12 May 796.40 22.55
(2.91%)
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782.70

HIGH

814.90

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OPEN 785.95
PREVIOUS CLOSE 773.35
VOLUME 6255
52-Week high 879.80
52-Week low 350.50
P/E 9.97
Mkt Cap.(Rs cr) 2,322
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 785.95
CLOSE 773.35
VOLUME 6255
52-Week high 879.80
52-Week low 350.50
P/E 9.97
Mkt Cap.(Rs cr) 2,322
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Maithan Alloys Ltd. (MAITHANALL) - Auditors Report

Company auditors report

To the Members of Maithan Alloys Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Maithan AlloysLimited (the "Company”) which comprise the Standalone Balance Sheet as at 31March 2020 and the Standalone Statement of Profit and Loss (including Other ComprehensiveIncome) Standalone Statement of Changes in Equity and Standalone Cash Flows Statement forthe year then ended and notes to the standalone financial statements including a summaryof significant accounting policies and other explanatory information (hereinafter referredto as "the 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 the profit and othercomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

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 Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

Emphasis of Matter

We draw your attention to Note 49 to the standalone financial statement which explainsthe uncertainties and the management's assessment of the financial impact due to thelock-downs and other restrictions and conditions related to the COVID-19 pandemicsituation for which a definitive assessment of the impact in the subsequent period ishighly dependent upon circumstances as they evolve. Our opinion is not modified in respectof this matter.

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 bethe key audit matters to be communicated in our report:

Key Audit Matters Auditor's Response
1. Revenue Recognition Our audit procedures to assess the appropriateness of revenue recognised included the following:
(Refer note 3(k) the significant accounting policies of Standalone Financial Statements).
Our audit procedures considering the significant risk of misstatement related to revenue recognition included amongst other:
Revenue is recognised when the control of the underlying products has been transferred to customer along with the satisfaction of the Company's performance obligation under a contract with customer. The company focuses on revenue as a key performance measure which could create an incentive for revenue to be recognised before completion of the performance obligation.
• Obtaining an understanding of an assessing the design implementation and operating effectiveness of the Company's key internal controls over the revenue recognition process.
• Examination of significant contracts entered into close to year end to ensure revenue recognition is made in correct period.
There is a significant risk of misstatement due to risk related to inappropriate recognition of the revenue and hence was determined to be a key audit matter.
• Testing a sample of contracts from various revenue streams by agreeing information back to contracts and proof of delivery as appropriate and ensure revenue recognition policy is in accordance with principles of Ind AS 115.
Our testing as described above showed that revenue has been recorded in accordance with the terms of underlying contracts and accounting policy in this area.
2. Inventories Principal Audit Procedures
The carrying value of inventory as at 31 March 2020 is RS 276.93 crore. The inventory is valued at the lower of cost and net realisable value. We considered the value of inventory as a key audit matter given the relative size of its balance in the financial statements and significant judgement involved in the consideration of factors in determination of selling prices such as fluctuation of raw materials prices in the market and in determination of net realisable value. - We understood and tested the design and operating effectiveness of controls as established by the management in determination of net realisable value of inventory.
- Assessing the appropriateness of Company's accounting policy for valuation of stock-intrade and compliance of the policy with the requirements of the prevailing Indian accounting standards
Refer Note No. 9 to the standalone financial statements. - We considered various factors including the actual selling price prevailing around and subsequent to the year-end.
- Compared the cost of the finished goods with the estimated net realisable value and checked if the finished goods were recorded at net realisable value where the cost was higher than the net realisable value.
- Based on the above procedures performed the management's determination of the net realisable value of the inventory as at the year end and comparison with cost for valuation of inventory is considered to be reasonable.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's management and Board of Directors is responsible for the preparation ofthe other information. The other information comprises the information included in theCompany's annual report but does not include the standalone financial statements and ourauditor'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 we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for Standalone Financial Statements

The Company's management and Board of Directors are responsible for the matters statedin section 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 Indian AccountingStandards (Ind AS) specified under section 133 of the Act read with relevant rules issuedthereunder.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate implementation and maintenance of 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 standalone financial statement that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the company's financialreporting process.

Auditor's Responsibilities 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 standalone financial statements.

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 standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent 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 financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the 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' issued by theCentral Government of India in terms of sub-section (11) of section 143 of the Act wegive in the "Annexure A” statement on the matters specified in paragraphs 3 and4 of the Order.

(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 the Cash Flow Statement 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 thereunder;

(e) On the basis of the written representations received from the directors as on 31March 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2020 from being appointed as a director in terms of Section164 (2) of the Act;

(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 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 as at 31 March 2020 onits financial position in its standalone financial statements - Refer Note 44 to theStandalone 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 during the year ended 31 March2020.

(h) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act. The remuneration paid to anydirector is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us.

For M Choudhury & Co.
Chartered Accountants
Firm Registration No. 302186E
D Choudhury
Partner
Place: Kolkata Membership No. 052066
Date: 20 June 2020 UDIN: 20052066AAAAAX9150

Annexure A to the Independent Auditor's Report

of even date on the Standalone Financial Statements of Maithan Alloys Limited

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

(b) The fixed assets of the Company have been physically verified by the Management atreasonable intervals and no material discrepancies have been noticed on such verification.

(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.

ii. The physical verification of inventory has been conducted at reasonable intervalsby the Management and no material discrepancies were noticed on such verification.

iii. The Company has not granted any loans secured or unsecured to companies limitedliability partnership firm firms or other parties covered in the register maintainedunder Section 189 of the Act. Therefore the provisions of Clause 3(iii)[(a) (b) and (c)]of the said Order are not applicable to the Company.

iv. The Company has neither granted any loan nor provided any guarantee or securityhence the provisions of Section 185 of the Act are not applicable to the Company. In ouropinion and according to the informations and explanations given to us with respect to theinvestments made the Company has complied with the provisions of Section 186 of the Act.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 to 76 of the Act and the rules framed there under. Therefore the provision ofclause 3(v) of the order is not applicable on the company.

vi. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain Cost Records as specified under Sec 148(1) of the act in respect ofits products.We have broadly reviewed the same and are of the opinion that prima faciethe prescribed accounts and records have been made and maintained. We have not howevermade a detailed examination of the records with a view to determine whether they areaccurate or complete.

vii. (a) The Company is regular in depositing the undisputed statutory dues includingprovident fund Employees' State Insurance Income tax Goods and Service tax CustomsDuty cess and other material statutory dues as applicable with the appropriateauthorities. According to the information and explanations given to us no undisputedamounts payable in respect of the aforesaid dues were outstanding as at 31 March 2020 fora period of more than six months from the date of becoming payable.

b) The particulars of dues of Service tax Excise duty cess etc which have not beendeposited as at 31 March 2020 on account of dispute are given as follows:

Name of the statute Nature of dues

Amount ( Rs )

Period to which the amount relates Forum where the dispute is pending
The Central Excise Act 1944 Excise Duty & Service Tax

1045052

2006-07 CESTAT Kolkata
The Central Excise Act 1944 Excise Duty & Service Tax

1236512

2008-09 CESTAT Kolkata
The Central Excise Act 1944 Excise Duty & Service Tax

498473

2008-09 Commissioner (Appeal) Kolkata
The Central Excise Act 1944 Excise Duty & Service Tax

4284911

2009-10 CESTAT Kolkata
The Central Excise Act 1944 Excise Duty & Service Tax

660880

2013-14 Addl. Commissioner Bolpur
The Central Excise Act 1944 Excise Duty & Service Tax

3151800

2013-14 CESTAT Kolkata
The Central Excise Act 1944 Excise Duty & Service Tax

6015000

2014-15 CESTAT Kolkata
The Central Excise Act 1944 Excise Duty & Service Tax 5090935 2016-17 CESTAT Kolkata
Finance Act 1994 Service Tax 1162272 2017-18 Commissioner (Appeal)Siliguri
Finance Act 1994 Service Tax 557442 2017-18 Commissioner (Appeal) Siliguri
Finance Act 1994 Service Tax 127680 2017-18 Commissioner (Appeal) Siliguri
The Central Excise Act 1944 Excise Duty & Service Tax 901462 2017-18 Assistant Commissioner Asansol
The Central Excise Act 1944 Excise Duty & Service Tax 3351688 2013-14 Commissioner (Appeal) Siliguri
The Central Excise Act 1944 Excise Duty & Service Tax 7945242 Sept'14- March'16 Addl. Commissioner Bolpur
The Central Excise Act 1944 Excise Duty & Service Tax 8939616 2016-17 & UPTO June'17 Addl. Commissioner Bolpur
The Central Excise Act 1944 Excise Duty & Service Tax 529055 2019-20 Assistant Commissioner Asansol

viii. The Company has not defaulted in repayment of loans or borrowings to anyfinancial institution or banks as at the balance sheet date. The Company has neitherissued any debentures nor has taken any loans or borrowings from the Government as at thebalance sheet date.

ix. The Company has not raised any money by way of initial public offer/further publicoffer (including debt instruments)/term loans during the year. Accordingly the provisionsof clause 3(ix) of the Order are not applicable to the Company.

x. We have neither come across any instance of material fraud on or by the Companynoticed or reported during the year nor have we been informed of any such case by theManagement.

xi. The managerial remuneration has been paid/ provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V of theAct.

xii. As the Company is not a Nidhi Company the provisions of clause 3(xii) of theOrder are not applicable.

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 standalone financial statements as required by theapplicable accounting standards.

xiv. No money was raised through preferential allotment/private placements ofshares/fully/partly convertible debentures during the year under review hence theprovisions of clause 3(xiv) of the said order is not applicable to the Company.

xv. The Company has not entered into any non-cash transactions with its directors orperson connected with them. Accordingly clause 3(xv) of the Order is not applicable tothe Company.

xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly the provision of clause 3(xvi) are not applicable tothe Company.

For M Choudhury & Co.
Chartered Accountants
Firm Registration No. 302186E
D Choudhury
Partner
Place: Kolkata Membership No. 052066
Date: 20 June 2020 UDIN: 20052066AAAAAX9150

Annexure B to the Independent Auditor's Report

of even date on the Standalone Financial Statements of Maithan Alloys Limited

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

We have audited the internal financial controls over financial reporting of MaithanAlloys Limited ("the Company”) as at 31 March 2020 in conjunction with our auditof the standalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013 ("The Act”).

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note”) and the Standards on Auditing issued by ICAI and 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 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 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 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 financial statements for external purposes in accordance withgenerally 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 standalonefinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the standalonefinancial 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 the Company has in all material respects read with impact of Covid-19 stated in Emphasis of Matter paragraph in Independent Auditor's Report an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31 March 2020 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the ICAI.

For M Choudhury & Co.
Chartered Accountants
Firm Registration No. 302186E
D Choudhury
Partner
Place: Kolkata Membership No. 052066
Date: 20 June 2020 UDIN: 20052066AAAAAX9150

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