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MMTC Ltd.

BSE: 513377 Sector: Others
NSE: MMTC ISIN Code: INE123F01029
BSE 00:00 | 17 Aug 32.50 0.25
(0.78%)
OPEN

32.30

HIGH

33.30

LOW

32.15

NSE 00:00 | 17 Aug 32.60 0.40
(1.24%)
OPEN

32.20

HIGH

33.20

LOW

32.20

OPEN 32.30
PREVIOUS CLOSE 32.25
VOLUME 222397
52-Week high 67.73
52-Week low 30.33
P/E 104.84
Mkt Cap.(Rs cr) 4,875
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 32.30
CLOSE 32.25
VOLUME 222397
52-Week high 67.73
52-Week low 30.33
P/E 104.84
Mkt Cap.(Rs cr) 4,875
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

MMTC Ltd. (MMTC) - Auditors Report

Company auditors report

Report on the Standalone Ind AS Financial Statements

1. We have audited the accompanying Standalone Ind AS financial statements of MMTCLimited ("the Company") which comprises the Balance Sheet as at 31st March2017 the statement of Profit and Loss (including other comprehensive income) thestatement of Cash Flows and statement of changes in Equity for the year then ended and asummary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Ind AS Financial Statements

2. 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 to give a true and fair view of the financialposition financial performance (including other comprehensive income) cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards specified in the Companies(Indian Accounting Standards) Rules 2015 (as amended) under Section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of 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 Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditors' Responsibility

3. 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 theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder. We conductedour audit in accordance with the Standards on Auditing specified under Section 143(10) ofthe Act and other applicable authoritative pronouncements issued by the Institute ofChartered Accountants of India. Those Standards and pronouncements require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether the standalone Ind AS financial statements are free from materialmisstatement.

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 auditors' 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 92 financial statementsthat give a true and fair view in order to design audit procedures that are appropriatein the circumstances. An audit also includes evaluating the appropriateness of theaccounting policies used and the reasonableness of the accounting estimates made by theCompany's Directors as well as evaluating the overall presentation of the standalone IndAS 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 Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationprovided to us the aforesaid Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including Ind AS of the financialposition of the Company as at 31stMarch 2017 and its financial performance includingother comprehensive income its cash flows and the changes in the equity for the yearended on that date

Emphasis of Matter a. We draw attention to Note No. 36 (ix) to the standalone IndAS financial statements in respect of non-provision of liability if any arises in caseof non- extension of time/waiver/write off of GR-1 forms. b. We draw attention to Note No.49 to the standalone Ind AS financial statements in respect of Balances under SundryCreditors/Sundry Debtors/Claims Recoverable/Loans &advances/Other Liabilities whichin many cases have not been confirmed and any adjustments due to consequentreconciliation if any required is not ascertainable. c. We draw attention to Note No.36(v) (vi) and 38 (c) to the standalone Ind AS financial statements in respect of fundbased and non-fund based exposure of the Company in M/s Neelachal Ispat Nigam Ltd. (NINL)a Joint Venture Company. Our opinion is not modified in respect of this matter.

Other Matters

A. The comparative financial information of the Company for the year ended March31 2016 and the transition date opening balance sheet as at April 1 2015 included inthese standalone Ind AS financial statements are based on the previously issued statutoryfinancial statements for the years ended March 31 2016 and March 31 2015 prepared inaccordance with the Companies (Accounting Standards) Rules 2006 (as amended). Financialstatement for the financial year ended 31st March 2016 were audited by us and expressed anunmodified opinion vide report dated 27th May 2016 whereas financial statement for theyear ended 31st March 2015 which were audited by the predecessor auditor and expressed anunmodified opinion vide report dated 21st May 2015. The adjustments to those financialstatements for the differences in accounting principles adopted by the Company ontransition to the Ind AS have been audited by us.

B. We did not audit the Ind AS financial statements/ financial information of 8regional offices included in the standalone financial statements of the company whose IndAS financial statements/financial information reflect total assets of INR 45597.62million as at March 31 2017 and total revenue of INR 78702.83 million for the year endedon that date as considered in the standalone Ind AS financial statements. The Ind ASfinancial statements/financial information of these branches have been audited by thebranch auditors whose reports have been furnished to us and our opinion in so far as itrelates to the amount and disclosure included in respect of these branches is basedsolely on the report of such branch auditors.

Report on Other Legal and Regulatory Requirements

4. 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 give in the "Annexure-1" a statement on the matters specifiedin the paragraph 3 and 4 of the Order to the extent applicable.

5. 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 appears from our examination of those books; c) The reports on theaccounts of the branch offices of the Company audited under section 143 (8) of the Act bythe Branch auditors have been sent to us and have been properly dealt with by us inpreparing the report;

d) The Balance Sheet the Statement of Profit and Loss the statement of Cash Flows andStatement of Changes in Equity referred to in this report are in agreement with the booksof account.

e) In our opinion the aforesaid standalone Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with relevant rulesissued thereunder;

f) On the basis of written representations received from the directors as on 31st March2017 taken on record by the Board of Directors none of the directors is disqualified ason 31st March 2017 from being appointed as a director in terms of Section 164(2) of theCompanies Act 2013. g) with respect to the other matters to be included in the Auditor'sReport in accordance with Rule

11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the best ofour information and according to the explanations given to us i. There are pendinglitigations including matters relating to sales tax custom duty and excise duty which aredisclosed as contingent liability - refer to Note 36 and 38 to the standalone Ind ASfinancial statements the impact of the same is unascertainable as the matters aresub-judice. ii. The Company has made provision as required under the applicable law oraccounting standards for material foreseeable losses if any on long term contractsincluding derivative contracts. iii. There has been no delay in transferring amountsrequired to be transferred to the investors 94 Education and Protection Fund by theCompany. iv. With respect to the adequacy of internal financial controls over financialreporting of the company and operating effectiveness of such controls refer to ourseparate Report in

"Annexure-2" v. The company has provided requisite disclosure in note no.52 to these standalone Ind AS financial statements as to holding of Specified Bank Noteson 8th November 2016 and 30th December 2016 as well as dealing in specified notes duringthe period 8th November 2016 to 30th December 2016. The disclosures are in accordance withthe books of accounts maintained by the company and as produced before us by themanagement.

6. As required by C & AG of India through sub-directions issued under Section 143(5) of the Company's Act we give our report in the attached "Annexure-3"

For O.P.Tulsyan & Company
Chartered Accountants
FRN: 500028N
Place: New Delhi Rakesh Agarwal
Date: 29.05.2017 Partner
M No.: 081808

Annexure-1 To the Independent Auditors' Report on the Standalone Ind AS FinancialStatements95 of MMTC LTD.

(Referred to in Paragraph 1 under the "Other Legal & RegulatoryRequirement") We further report that:

1. In Respect of Its Fixed Assets

i. The Company has maintained proper records in respect of its fixed assets showingfull particulars including quantitative details and situation of fixed asset. ii. Based onthe physical verification reports produced before us in our opinion the said assets havebeen physically verified by the management at reasonable intervals. iii. Title Deeds ofimmoveable property are held in the name of the company except in the case mentionedbelow:

Region/Office Asset Description Gross Value Area Remarks
Corporate Office Land for Residential Colony at New Delhi 13.16 Lakhs 32.33 Lease Agreement is in Joint Name Acres of MMTC and State Trading Corporation
Bhubaneshwar Office Residential Building Roads Culverts and Electrical Installations 49.01 Lakhs 2 Acres Lease Deed Expired in 2011

2. In Respect of Its Inventory i. As explained to us the inventories have beenphysically verified during the year by the management. ii. In our opinion and according tothe information and explanation given to us no material discrepancies were noticed duringthe course of physical verification. iii. In our opinion and according to the informationand explanation given to us the procedure of physical verification of inventoriesfollowed by the management needs to be further strengthened in relation to the size of theMMTC Limited and the nature of its business.

3. Loans given to parties covered under section 189

The company has granted unsecured loan to one of itsjoint venture company M/sNeelachalIspat Nigam Limited.

i. In our opinion and according to the information and explanation given to us termsand conditions on which loan has been granted is not pre-judicial to the interest of thecompany. ii. According to the information and explanation given to us repayment schedulehas been agreed with the company. iii. According to the information and explanation givento us there is no amount over due.

4. Compliance of Provision of Section 185 and 186 of the Companies Act 2013 inrespect of loans guarantees and securities According to the information andexplanations given to us and as per the records verified by us the company has compliedthe provisions of Section 185 and 186.

5. Acceptance of Deposits 96

According to the information and explanations given to us the company has not accepteddeposits as per the directive issued by the Reserve Bank of India and the provision ofSection 73 to 76 or any other relevant provision of the Act and the rules framed thereunder.

6. Maintenance of Cost Records

As explained to us maintenance of cost records has not been prescribed by the CentralGovernment for the company under Section 148(1) of the Act.

7. Undisputed & Disputed Statutory Dues

(a) According to the information and explanations given to us and as per the recordsverified by us the Company has been regular in depositing undisputed statutory duesincluding Income Tax Provident Fund dues Professional Tax Value Added Tax and ServiceTax with the appropriate authorities. (b) There were no undisputed amount payable inrespect of Income Tax Provident Fund dues Professional Tax Value Added Tax and ServiceTax and other statutory dues in arrear as at 31st March 2017 for more than six months fromthe date they became payable. (c) In case if dues of Income Tax or sales tax or servicetax or duty of custom or duty of excise or value tax or cess have not been deposited onaccount of any dispute are attachedas Annexure A:

8. Loans from Banks/Financial Institutions/Government/Debentures

According to the information and explanations given to us and as per the recordsverified by us the company has not defaulted in repayment of loans or borrowings to afinancial institution bank Government or dues to debenture holders.

9. Proceeds of Public Issue(including debt instruments)/Term Loans

According to the information and explanations given to us and as per the recordsverified by us the Company has not raised any money during the year throughinitial/further public offer (including debt instruments). Term loans raised by thecompany during the year have been utilized for the purpose for which they were obtained.

10. Frauds on or by the Company

According to the information and explanations given to us and as per the recordsverified by us carried out in accordance with the generally accepted auditing practicesin India we have neither come across any instance of fraud on or by the company or itsofficers noticed or reported during the year nor have we been informed of such case bythe management.

11. Managerial Remuneration

According to the information and explanations given to us and as per the recordsverified by us managerial remuneration has been paid/provided for by the company duringthe year under review is within the purview of Section 197 read with Schedule V to theAct.

12. Nidhi Companies

The Company is not a Nidhi Company during the year under review and hence the criteriaas stipulated under Nidhi Rules 2014 are not applicable to the company.

13. Related Party Transactions 97

As per the information and explanations given during the course of our verification inour opinion all transactions with the related parties made by the company were incompliance with section 177 and 188 of the Act to the extent applicable to the companyduring the year the relevant details in respect of which have been appropriatelydisclosed in the Ind AS financial statements.

14. Preferential Issue

During the year the company has not made any preferential allotment or privateplacement of equity shares or convertible debentures and hence the requirements of Section42 of the Act are not applicable.

15. Non-Cash Transactions with Director's etc.

As per the informations and explanations provided to us during the year the Companyhas not entered into any non-cash transactions with directors or persons connected withthe directors within the purview of section 192 of the Act are not applicable.

16. Provision of 45-IA of the Reserve Bank of India Act1934

According to the information and explanations given to us and as per the recordsverified by us during the year the Company is not required to be registered underSection 45-IA of the Reserve Bank of India Act 1934.

For O.P.Tulsyan & Company
Chartered Accountants
FRN: 500028N
Place: New Delhi Rakesh Agarwal
Date: 29.05.2017 Partner
M No.: 081808

Annexure-2 To the Independent Auditors' Report of even date on the Ind AS standalonefinancial 102 statements of MMTC Ltd.

Report on the Internal Financial Controls over financial reporting under Section143(3)(i) of the

Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of MMTCLtd. ("the Company") as of March 31 2017 in conjunction with our audit ofthe standalone Ind AS 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 (the ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

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 reportingand the Standards on Auditing issued by the ICAI deemed to be prescribed under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls. Those standards and the Guidance Note 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 exist and testing and evaluating the designand operating effectiveness of the internal control based on the assessed risk . Theprocedures selected depend on the auditor's judgment including the assessment of risks ofmaterial misstatements of the 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 of our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting: 103

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 Ind AS 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 the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

2. Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of Ind AS financial statements in accordance with generally acceptedprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

3. Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the Ind 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 subject to a few areas in which improvement as discussed and agreedwith the management is required the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31st 2017 basedon the 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 Institute ofChartered Accountants of India.

Place: New Delhi For O.P. Tulsyan & Company
Date: 29.05.2017 Chartered Accountants
FRN.: 500028N
Rakesh Agrawal
Partner
M No.: 081808

Annexure-3: To the Independent Auditors' Report of even date on the Standalone Ind ASFinancial 104 Statements of MMTC Ltd.

Sl. No. Description Observation
1. Whether the Company has clear title/lease deeds for freehold and leasehold respectively? If not please state the area of freehold and leasehold land for which title/lease deeds are not available? As per explanation and information given to us and records verified by us in respect of Corporate Office & DRO and based on audit reports read with CARO reports received from other auditors for 8 regional offices the details in respect of availability of title deed of Immoveable Properties are given below:
2. Whether there are any cases of waiver/write off of debts/loans/interest etc.. If yes the reason therefore and the amount involved. As per explanation and information given to us and records verified by us Rs. 6613879 has been written off during the financial year.
3. Whether proper records are maintained for inventories lying with third parties & assets received as gift/grant(s) from Govt. or other authorities. As per explanation and information given to us and records verified by us in respect of Corporate Office & DRO and based on audit reports received from other auditors for 8 regional offices proper records are maintained for inventories lying with third parties. It is informed to us during the year no assets received as gift/grant from Government or other Authorities.

Detail of Freehold/Leasehold Land :

Region/Office Asset Description Gross Value Area Remarks
Corporate Office Land for Residential Colony at New Delhi 13.16 Lakhs 32.33 Acres Lease Agreement is in Joint Name of MMTC and State Trading Corporation
Bhubaneshwar Office Residential Building Roads Culverts and Electrical Installations 49.01 Lakhs 2 Acres Lease Deed Expired in 2011. Paradeep Port recommended for renewal of lease for 15 years. Final approval from Government is awaited.

 

Place: New Delhi For O.P.Tulsyan & Company
Date: 29.05.2017 Chartered Accountants
FRN.: 500028N
Rakesh Agarwal
Partner
M No.: 081808