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Minal Industries Ltd.

BSE: 522235 Sector: Others
NSE: N.A. ISIN Code: INE097E01028
BSE 00:00 | 04 Mar Minal Industries Ltd
NSE 05:30 | 01 Jan Minal Industries Ltd
OPEN 1.20
PREVIOUS CLOSE 1.20
VOLUME 500
52-Week high 1.20
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 23
Buy Price 1.21
Buy Qty 25.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1.20
CLOSE 1.20
VOLUME 500
52-Week high 1.20
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 23
Buy Price 1.21
Buy Qty 25.00
Sell Price 0.00
Sell Qty 0.00

Minal Industries Ltd. (MINALINDUS) - Auditors Report

Company auditors report

TO THE MEMBERS OF MINAL INDUSTRIES LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Minal IndustriesLimited ("the Company")which comprise the Balance Sheet as at March 312017. The Statement of Profit and Loss and the Cash Flow Statement for the year ended onthat date and a summary of the significant accounting policies and other explanatoryinformation.

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 Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules2014. 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 ofthe appropriate accounting policies making judgements and estimates that are reasonableand prudent; and design implementation and maintenance of internal financial controlsthat were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased 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 thereunder.

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 financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the standalone financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thestandalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financials control relevant to the Company'spreparation of the standalone financial statements and give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Basis for Qualified Opinion

a) Attention is invited to Note No. 26 to the standalone financial statement relatingto valuation of inventories in respect of stock of polished diamonds at lower of cost ornet realisable value cost or net realisable value is based on technical estimate by themanagement and certified by approved valuer. The basis of computing cost used onconsistent basis though in line with generally accepted industry practice is a deviationfrom the method prescribed by Accounting Standard (AS) - 2 'Valuation ofInventories'. The impact on loss for the year reserves and surplus and inventories as at31st March 2017 if any due to the above deviations is not ascertainable.

b) i) Attention is invited to Note No. 30 to the standalone financial statementrelating to the extent of provision that may be required for diminution in the value oflong term investments amounting to Rs. 1837500/- in Minal International FZE (UAE)overseas wholly owned subsidiary of the company. Significant uncertainties exist inrelation to the recoverability of loans amounting to Rs. 19876930/- and interestaccrued thereon Rs. 4087631/- due from above wholly owned subsidiary

ii) Attention is invited to Note No. 30 to the standalone financial statement relatingto no provision is made for interest on loan granted to Minal International FZE (UAE)overseas wholly owned subsidiary amounting to Rs. 1001495/- (Previous Year Rs. NIL). asthere is no certainty on recoverable of principle loan amount.

c) In absence of audited / unaudited results of Minal Infojewels Limited associatecompany we were unable to obtain sufficient appropriate audit evidence about the carryingamount of Company's investment in associate company as at March 31 2017. Consequently wewere unable to determine whether any adjustments to these amounts were necessary. The saidinvestments continue to he valued at cost. The impact on loss for the year reserves andsurplus and investments as at 31st March 2017 if any is not ascertainable.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effect of the matter described in the Basis for QualifiedOpinion paragraph above the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the stale ofaffairs of the Company as on 31st March 2017 and its Loss and its cash flowsfor the year ended on that dale.

Emphasis of Matter

a) We draw attention to Note No. 27 to the standalone financial statement relating tonon receipt of bank statements and bank confirmations from three banks for which balancesas on 31st March 2017 amounts to Rs. 108286/- (balance as on 31stMarch 2016 amounts to Rs. 6180/-) for which the management had certified there being notransactions during the year and we have relied upon the same.

b) We draw attention to Note no. 32 (a) to the standalone financial statement relatingto Trade Receivables amounting to Rs. 117743510/- (Previous Year Rs. 197125079) isoutstanding for more than three years. However the management classifies these debts fullyrecoverable and good and accordingly does not consider it necessary to make any provision.

c) We draw attention to Note no. 32 (b) to the standalone financial statement relatingto Loans and Advances amounting to Rs. 4104826/- (Previous Year Rs. 4104826) isoutstanding for more than three years which are doubtful of recovery. However themanagement classifies these debts fully recoverable and good and accordingly does notconsider it necessary to make any provision.

d) We draw attention to Note No. 34 to the standalone financial statement relating tothe balance confirmation from suppliers customers as well as to various loans andadvances given are not obtained. In view of the same the balances of receivables tradepayables as well as loans and advances have been taken as per the books of accountssubmitted by the company and are subject to availability of confirmation from therespective parties.

e) We draw attention to Note No. 39 to the standalone financial statement relating tothe Company has unabsorbed depreciation and carry forward losses under Tax Laws inabsence of virtual certainty of sufficient future taxable income Deferred Tax assets hasnot been recognised by way of prudence in accordance with Accounting Standard 22 -"Accounting for Taxes on Income" issued by the Institute of CharteredAccountings of India

f) We draw attention to Note No. 41 to the standalone financial statement relating tonon appointment of whole time Company Secretary and Chief Financial Officer as perSection 203 of the Companies Act 2013. Therefore these standalone financial statementshave not been authenticated by a whole time Company Secretary and Chief Financial Officeras per Section 134 of Companies Act 2013.

Our opinion is not qualified in respect of the above matter

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 sub-section (11) of section 143 ofthe Act we enclose in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 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 purpose of our audit;

b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books

c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 Companies(Accounts) Rules2014.

e) On the basis of written representations received from the Directors as on March 312017 taken on record by the Board of Directors none of the Directors are disqualified ason March 31 2017 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 Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us :

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer Note 23 to the standalonefinancial statements:

ii. The Company did not have any long term contracts including derivative contracts forwhich there were any materials foreseeable losses; and

iii. There has been delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company-Refer Note 31 to the standalonefinancial statements.

iv. The Company has provided requisite disclosure in its standalone financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8th November 2016 to 30th December 2016 and these are inaccordance with the books of accounts maintained by the company. Refer Note. 25 to thestandalone financial statements.

For K H Modi & Co.
Chartered Accountants
(Firm Reg. No. 106486W)
R. H. Modi
Place: Mumbai Proprietor
30 MAY 2017 Membership No.: 37643

ANNEXURE "A" TO THE INDEPENDENT AUDITOR' REPORT

(Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements'section of our report of even date)

i. In respect of its fixed assets:

(a) The company has maintained memorandum of records showing full particulars includingquantitative details and situation of its fixed assets.

(b) As explained to us fixed assets have been physically verified by the Management atreasonable intervals in accordance with the regular program of verification which in ouropinion provides for physical verification of all the fixed assets at reasonableintervals. According to the information and explanation given to us no materialdiscrepancies were noticed on such verification.

(c) According to the information and explanation given to us in respect of immovableproperty the title deeds are held in the name of the company.

ii. As explained to us the inventories were physically verified during the year by themanagement at reasonable intervals and no material discrepancies were noticed on physicalverification.

iii. The Company has granted loans to two companies and one partnership firm covered inthe register maintained under section 189 of the Companies Act 2013 (‘the Act').

(a) In case of loan granted to its wholly subsidiary company associate company andpartnership firm the company has not charged interest during the year. In our opinion theterms and conditions on which the loans had been granted to the wholly owned subsidiarycompany associate company and partnership firm listed in the. register maintained underSection 189 of the Act are prima facie prejudicial to the interest of the Company onaccount of the fact that no interest is charged on the loans granted.

(b) In the case of the loan granted to wholly owned subsidiary the terms ofarrangement had stipulated the repayment schedule of principal and payment of interestand in case of associate company and partnership firm there is no stipulation of schedulefor repayment of principal and payment of interest. However the wholly owned subsidiary isnot regular in payment of interest and repayment is not as per schedule.

(c) In case of wholly owned subsidiary company the amount overdue for more than 90days is Rs. 23964561/-(includes principal Rs. 19876930/- and interest Rs.4087631/-) reasonable steps are being taken by the management for recovery of principaland interest.

iv. The Company has given loan to its associate company and partnership firm in whichrelative of a director is a partner whose year end outstanding balance is Rs. 18.8695119and has given corporate guarantee for Rs. 69800000/- in connection with loan taken byassociate company in contravention of provision of Section 185 of the Companies Act2013.

Further the Company has given interest free loan to 3 parties whose year endoutstanding balance is Rs. 212659680/- which is in contravention of section 186(7) ofthe Companies Act 2013 which require that ‘No loan shall be given under this sectionat a rate of interest lower than the prevailing yield of one year three year five yearor ten year Government Security closest to the tenor of the loan'.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public in accordance with the provisions ofsections 73 to 76 of the Act and the rules framed there under

vi. According to the information and explanations given to us the maintenance of costrecords under Section 148( 1) of the Companies Act 2013 is not applicable in view of rule3 of the Companies (Cost Records and Audit) Amendment Rules 2014 and therefore theprovision of clause (vi) of the Order are not applicable to the Company.

vii. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the Company has generally been regular indepositing undisputed statutory dues including Provident Fund Employees' StateInsurance Income-tax Sales-tax Service Tax Custom Duty Excise Duty Value Added TaxCess or other material statutory dues applicable to it with the appropriate authorities.

(b) There are no dues of Income-tax Sales-tax Service Tax Custom Duty Excise DutyValue Added Tax or Cess which have not been deposited on account of any dispute except thefollowing:

Nature of the Statute Nature of Dues Period to which it relates Amount in Rs. Forum where dispute is pending
income Tax Act 1961 Income Tax Assessment Year 1998-99 499230/- Ahmedabad High Court
Income Tax Act 1961 Income Tax Assessment Year 2011-12 172530/- Commissioner of Income Tax Appeal- Mumbai

viii. The Company does not have any loans or borrowings from any financial institutionbanks government or debenture holders during the year. Accordingly paragraph 3(viii) ofthe Order is not applicable

ix. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.

x According to the information and explanations given to us no fraud by the Company oron the Company by its officers or employees has been noticed or reported during the courseof our audit.

xi. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Companies Act.

xii. In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards

xiv. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)of the Order is not applicable.

xvi. The Company is not required to be registered under section 4S-1A of the ReserveBank of India Act 1934.

For R H Modi & Co.
Chartered Accountants
(Firm Reg. No. 106486W)
R.H.Modi
Place: Mumhai Proprietor
Date: 30 MAY 2017 Membership No.: 37643

ANNEXURE "B" TO THE INDEPENDENT AUDITOR' 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 MinalIndustries Limited ("the Company") as of 31 March 2017 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

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.

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 and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material 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 thepreparation of standalone financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial controlover financial reporting includes those policies and procedures that (l) 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 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 the Company has in all material respects and adequate internalfinancial control system and the internal control system adopted by the Company hasadequate risk management and assessment system but in company's perspective theeffectiveness of said system is less effective. Further an adequate internal financialcontrol system were operating effectively as of March 31 2017 however it is required tobe strengthen based on the internal control over financial reporting criteria establishedby the Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants

of India.

For R H Modi & Co.
Chartered Accountants
(Firm Reg. No. 106486W)
K.H.Modi
Place: Mumbai Proprietor
Date: 30 MAY 2017 Membership No.: 37643