Mar 31, 2018
Report on the Standalone Indian Accounting Standard (Ind-AS) Financial Statements
We have audited the accompanying Standalone Ind-AS Financial Statements of MAHAMAYA STEEL INDUSTRIES LIMITED (âthe Companyâ), which comprises the Balance Sheet as at March 31, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Ind AS Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS Financial Statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performanceincluding other comprehensive income),cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards(Ind AS) prescribed under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone Ind AS Financial Statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit of the standalone Ind AS Financial Statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS Financial Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS Financial Statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone Ind AS Financial Statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS Financial Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS Financial Statements.
Basis for qualified opinion
(i) The company has recognised electricity duty receivable amount of Rs.0.45 crores by the way of reversing electricity duty expenditure for the year; the company has not provided any sanction from the competent authority (CSIDC);in the absence of any reasonable certainty of the ultimate collection the receivable amount is not in line with the Indian Accounting Standard (Ind AS-18)(Revenue Recognition) of ICAI. The company has been following the same procedure for the earlier years which is having a cumulative effect of receivable balance of Rs. 9.99 crores.Had the company would not been recognised the same receivable during the year, the profit of the company would have been reduced to the extent of Rs.0.45 crores and the cumulative reduction in the receivable (Current Assets) and share holder''s fund to the extent of 9.99 Crores for the year.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in the Basis for qualified opinion paragraph above, the aforesaid standalone Ind AS Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the state of affairs(financial position) of the Company as at March 31, 2018, and its profit (financial performance including other comprehensive income ), its cash flows and the changes in equity for the year ended on that date.
Emphasis of matters
We draw attention to the following matters in the notes to the financial statements;
(i) Note No.11 (Trade Receivable) of the financial statement where the company had recognised Income amount of Rs.52.99 lakhs from of its customer against which they have got a court decree and the same is not yet received. The outcome of the ultimate realization is not known at present.
(ii) The company has made a provision of Rs.5.50 lakhs on its old debtors and due to inadequate system of provisioning we are unable to comment on the amount and its impact in financial statement for the year.
(iii) The management need to improve the effectiveness and efficiency of internal control of the company regarding the Physical verification of inventories, Parties confirmation, recoveries of old dues and related party transactions.
(iv) 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 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in Annexure âAâ a statement on the matters specified 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 best of 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 the Company 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 and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d) In our opinion, except as per the above paragraph, the aforesaid standalone Ind AS Financial Statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Bâ.
g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and 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 financial position in its standalone Ind AS Financial Statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
(Referred to in Para-1 âReport on Other Legal and Regulatory Requirementsâ in our Independent Auditors'' Report to the members of the Company on the Standalone Ind AS Financial Statements for the year ended March 31, 2018).Statement on Matters specified in paragraphs 3 & 4 of the Companies (Auditor''s Report) Order, 2016:
i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) As explained to us, the Company has a programme for physical verification of fixed assets at periodic intervals.. In our opinion, the period of verification and the process needs 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 reasonable intervals by the management. In our opinion, the period of verification and the process needs to be strengthened
iii. The Company has granted advances for purchase of raw materials to one party covered 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 to the 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 the register maintained under section 189 of the Act.
iv. In our opinion and according to the information and explanations given to us and the records examined by us, in respect loans, investments and guarantees, provisions of the section 185 and 186 of the Companies Act, 2013 have been complied with except in case of transaction in ordinary course of purchase and sale of materials.
v. In our opinion and according to the information and explanations given to us, the Company has not accepted any Deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions 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 to the Rules made by the Central Government of India, for maintenance of cost records under sub section (1) of section 148 of the Act, and are of the opinion that, prima facie the prescribed accounts and records have generally been made and maintained. We have not, however, made a detailed examination of the records with a view to examine whether they are accurate and complete.
vii. (a) According to the information and explanations given to us and the records examined by us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues with the appropriate authorities, wherever applicable and there are no such outstanding dues as at March 31, 2018, 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 examined by us, there are no dues of Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise and Value added tax outstanding on account of any dispute except:
Sl. No. |
Name of the Statute |
Nature of the duties |
Amount in Lacs |
Period to which the amount relates |
Forum where dispute is pending |
1 |
Sales Tax statute of the State |
Sales\ Comm.tax |
4.98 |
1990-91 |
Before the Hon''able High Court of Chhattisgarh |
2 |
Income tax Act,1961 |
TDS |
17.12 |
2008-09 |
ACIT, Raipur |
3 |
Income tax Act,1961 |
TDS |
4.18 |
2009-10 |
ACIT, Raipur |
4 |
Income tax Act,1961 |
Income tax |
113.36 |
2010-11 |
CIT (A), Raipur |
5 |
Income tax Act,1961 |
TDS |
2.46 |
2010-11 |
ACIT, Raipur |
6 |
Income tax Act,1961 |
Income tax |
50.26 |
2011-12 |
CIT (A), Raipur |
7 |
Income tax Act,1961 |
TDS |
2.77 |
2011-12 |
ACIT, Raipur |
8 |
Income tax Act,1961 |
Income tax |
235.92 |
2012-13 |
I.T.A.T. |
9 |
Income tax Act,1961 |
Income tax |
945.67 |
2013-14 |
ACIT, Raipur |
10 |
Income tax Act,1961 |
Income tax |
843.80 |
2014-15 |
CIT (A), Raipur |
11 |
Income tax Act,1961 |
TDS |
5.14 |
2015-16 |
ACIT, Raipur |
12 |
Central Excise Act 1944 |
Excise duty |
18.39 |
2011-12 |
Assistant Commissioner, Raipur |
13 |
Central Excise Act 1944 |
Excise duty |
4.23 |
2010-11 |
Assistant Commissioner, Raipur |
14 |
Central Excise Act 1944 |
Excise duty |
171.67 |
1998-1999 to 1999-2000 |
Chhattisgarh High Court |
15 |
Central Excise Act 1944 |
Excise duty |
30.00 |
2012-13 |
CESTAT,New Delhi |
Total |
2449.95 |
viii. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to banks. The Company does not have dues to financial institutions, government or debenture holders.
ix. The Company has not raised money through initial public offer or further public offer and term loans, hence the provisions of paragraph 3 (ix) of the Order are not applicable.
x. During the course of our examination of the books of account and records of the Company, and according to the information and explanation given to us and representations made by the Management, no material fraud by or on the Company, has been noticed or reported during the year.
xi. In our opinion and according to the information and explanations given to us, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule- V to the Companies Act.
xii. In our opinion and according to the information and explanation given to us, the Company is not a Nidhi Company.
xiii. According to the information and explanation given to us and based on our examination of the records of the Company, except as mentioned in above para, the transactions with related parties are in compliance with Section 177 and 188 of the Act, where applicable, and details of such transactions have been disclosed in the Standalone Ind AS Financial Statements as required by the applicable accounting standards.
xiv. According to the information and explanation given to us and based on our examination of the records, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
xv. According to the information and explanation given to us and based on our examination of the records, the Company has not entered into non-cash transactions with the directors or persons connected with him. Hence the provisions of Section 192 of the Act are not applicable.
xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934 hence the provisions of paragraph 3 (xvi) of the Order are not applicable.
Referred to in Para 2 (f) "Report on Other Legal and Regulatory Requirements" in our Independent Auditor''s Report to the members of the Company on the standalone Financial Statements for the year ended March 31, 2018.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of MAHAMAYA STEEL INDUSTRIES LIMITED ("the Company") as of March 31, 2018 in conjunction with our audit of the 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 internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in 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 of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness.
Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement 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 to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone Ind AS Financial Statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Standalone Ind AS Financial Statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the Standalone Ind AS Financial Statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, except the Physical verification of inventories and related party transactions, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India"
For, R D N A AND CO LLP
Chartered Accountants
Firm Reg. No.04435C
Ramesh Kumar Singhania
Place : Raipur Partner
Dated : May 28, 2018 Membership No.: 041880
Mar 31, 2016
To the Members of
MAHAMAYA STEEL INDUSTRIES LIMITED
1. Report on the Standalone Financial Statements :
We have audited the accompanying standalone financial statements of Mahamaya Steel Industries Limited (âthe Company''), which comprise the balance sheet as at 31 March 2016 the statement of profit and loss and the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information for the year then ended.
2. Managementâs Responsibility for the Standalone Financial Statements :
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
3. Auditorâs Responsibility :
Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
4. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Basis for Qualified Opinion :
The company has recognized electricity duty receivable amount of Rs.1.05 crores(Note No.13& 25) by the way of reversing electricity duty expenditure for the year; the company has not provided any sanction from the competent authority (CSIDC);in the absence of any reasonable certainty of the ultimate collection the receivable amount is not in line with the Accounting Standard (AS-9)(Revenue Recognition) of ICAI. The company has been following the same procedure for the earlier years which is having a cumulative effect of receivable balance of Rs. 8.82 crores. Had the company would not been recognized the same receivable during the year, the profit of the company would have been reduced to the extent of Rs.1.05 crores and the cumulative reduction in the receivable (Current Assets) and share holder''s fund to the extent of 8.82 Crores for the year.
6. Qualified Opinion :
In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in the Basis for qualified opinion paragraph above, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2016 and its loss and its cash flows for the year ended on that date.
Emphasis of matters :
We draw attention to the following matters in the notes to the financial statements;
Note No.18 (Other current assets) of the financial statement where the company had recognized receivable amount of Rs.114.56 lakhs from one of its employee committed fraud during the earlier financial year, the company had filed a legal suit against the employee and the same is subject to judicial proceedings. The outcome of the ultimate realization and the legal suit is not known at present.
Our opinion in not modified in respect of these matters.
7. Report on Other Legal and Regulatory Requirements :
As required by the Companies (Auditor''s Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.
8. 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 best of 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 the Company so far as it appears from our examination of those books;
(c) the balance sheet, the statement of profit and loss and the cash flow statement dealt with by this Report are in agreement with the books of account;
(d) Except to the para mentioned above, in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
(e) on the basis of the written representations received from the directors as on 31 March
2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2016 from being appointed as a director in terms of Section 164 (2) of the Act; and
(f) With respect to the adequacy of internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in Annexure-B'' and
(g) with respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
I. the Company has disclosed the impact of pending litigations(Note-30) on its financial position in its financial statements.
ii. the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts. And
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
ANNEXURE "A" TO THE INDEPENDENT AUDITOR''S REPORT
The Annexure referred to in paragraph 7 of our Independent Auditors'' Report of even date to the members of the Company on the standalone financial statements for the year ended 31 March 2016, we report that:
(i) (a) According to the information and explanations given to us the Company is in process of maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) As explained to us the Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.
(c) According to the information and explanation given to us and on the basis of our examination of the records of the company, the title deeds of immovable properties, as disclosed in Note-11 on the fixed assets to the financial statements are held in the name of the company.
(ii) (a) According to the information and explanations given to us the company has been physically verified the inventory (except stock lying with third parties) at reasonable intervals during the year. In respect of inventories lying with third parties, these have substantially been confirmed by them.
(b) According to the information and explanations given to us the procedures of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the company and the nature of the business. Further the discrepancies noticed in our physical verification of inventory as compared to books of accounts were not material.
(iii) According to the information and explanations given to us the Company has not granted loans to the bodies corporate covered in the register maintained under section 189 of the Companies Act, 2013 (âthe Act''). Accordingly, paragraph 3(iii) of the order is not applicable during the year.
(iv) The company has not granted any loans, investments, guarantees and securities granted in respect of which the provisions of section 185 & 186 of the Act are applicable and hence not commented thereon.
(v) According to the explanation and information given to us, the Company has not accepted any deposits within the meaning of section 73 to 76 of the Act and the rules framed there under to the extent notified during the year.
(vi) The Central Govt. has prescribed maintenance of cost records under section 148(1) of the Companies Act 2013 in respect of manufacturing activities of the company. We have broadly reviewed the accounts and records of the company in this connection and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) According to the information and explanations given to us and on the basis of our
examination of the records of the company, the company is regular in depositing the undisputed statutory dues including provident fund, employee''s state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities. And there is no arrear of outstanding statutory dues at the last day of the financial year concerned for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, the disputed amounts payable in respect of provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues aggregating to Rs.1127.62 lakhs, that have not been deposited on account of matters pending before the appropriate authorities are as under;
Sl. No. |
Name of the Statute |
Nature of the duties |
Amount in Lacs |
Period to which the amount relates |
Forum where dispute is pending |
1 |
Sales Tax statute of the State |
Sales\ Comm. tax |
4.98 |
1990-91 |
Before the Hon''able High Court of Chhattisgarh |
2 |
Income tax Act 1961 |
Income tax |
945.67 |
2013-14 |
ACIT, Raipur |
3 |
Central Excise Act 1944 |
Excise duty |
18.39 |
2011-12 |
Assistant Commissioner, Raipur |
4 |
Central Excise Act 1944 |
Excise duty |
5.79 |
2011-12 |
Additional Commissioner, Raipur |
5 |
Central Excise Act 1944 |
Excise duty |
7.70 |
2013-14 |
Commissioner (Appeal), Raipur |
6 |
Central Excise Act 1944 |
Excise duty |
18.41 |
2014-15 |
Commissioner (Appeal), Raipur |
7 |
Central Excise Act 1944 |
Excise duty |
9.91 |
2015-16 |
Assistant Commissioner, Raipur |
8 |
Central Excise Act 1944 |
Excise duty |
0.10 |
2015-16 |
Superintendent (Tech), Raipur |
9 |
Central Excise Act 1944 |
Excise duty |
116.67 |
2012-13 |
CESTAT, New Delhi |
Total |
1127.62 |
(viii)According to the records of the company examined by us and the information and explanation given to us, the company has not defaulted in repayment of loans or borrowings to any banks, financial institutions or govt. Further, the company does not have any debentures issued/ outstanding any time during the year.
(ix) The company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year. The company has obtained fresh term loan during the year and the same has been mainly applied for the purpose for which these are obtained.
(x) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.
(xi) According to the information and explanations given to us and based on our examination of the records of the company, the company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule v to the Act.
(xii) In our opinion and according to the information and explanation given to us, the company is not a nidhi company. Accordingly, paragraph 3 (xii) of the Order is not applicable during the year.
(xiii) According to the information and explanation given to us and based on our examination of the records of the company, transactions with the related parties are in compliance with sections 177 and 188 of the Act wherever applicable and details of such transactions have been disclosed in Note -31 to the financial statement as required by the applicable accounting standard.
(xiv)According to the information and explanation given to us and based on our examination of the records of the company, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
(xv) According to the information and explanation given to us and based on our examination of the records of the company, the company has not entered into any non-cash transactions with directors or persons connected with them as prescribed under section 192 of the Act. Accordingly, paragraph 3 (xv) of the Order is not applicable during the year.
(xvi)The company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934. Accordingly, paragraph 3(xvi) of the order is not applicable during the year.
ANNEXURE "B" TO THE INDEPENDENT AUDITOR''S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF MAHAMAYA STEEL INDUSTRIES LIMITED Report on the Internal Financial Controls under Clause (i) of Sub-section-3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the Internal Financial controls over financial reporting of MAHAMAYA STEEL INDUSTRIES LIMITED ("the Company") as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on the date.
Management''s Responsibility for Internal Financial Controls :
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditor''s Responsibility:
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance note") and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respect.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting:
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purpose in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting including those policies and procedures that (1) pertain to the maintenance of records that, in reasonable details, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statement.
Inherent Limitations of Internal Financial Controls Over Financial Reporting:
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evolution of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion:
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal controls over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For, R.K. Singhania & Associates
Chartered Accountants
F.R.No. 004435C
Place : Raipur Ramesh Kumar Singhania
Date : 28th May 2016 Partner
Membership No. 041880
Mar 31, 2015
Report on the Standalone Financial Statements:
We have audited the accompanying standalone financial statements of
Mahamaya Steel Industries Limited ('the Company'), which comprise the
balance sheet as at 31 st March, 2015, the statement of profit and loss
and the cash flow statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements:
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation and presentation of these standalone financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error
Auditor's Responsibility:
Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Basis for Qualified Opinion:
(i) The company has recognized electricity duty receivable amount of
Rs. 2.22 Cr. (Note No.13 & 25) by the way of reversing electricity duty
expenditure for the year; the company has not provided any sanction
from the competent authority (CSIDC); in the absence of any reasonable
certainty of the ultimate collection the receivable amount is not in
line with the Accounting Standard (AS-9)(Revenue Recognition) of ICAI.
The company has been following the same procedure for the earlier years
which is having a cumulative effect of receivable balance of Rs. 7.77
Cr. Had the company would not been recognised the same receivable
during the year, the profit of the company would have been reduced to
the extent of Rs. 2.22 Cr. and the cumulative reduction in the
receivable (Current Assets) to the extent of 7.77 Cr.
(ii) The company has recognised interest receivable from outstanding
debtors (Note No.20)(Other Income) amount of Rs. 31.23 lacs without
confirmation of the same, which is subject to legal proceedings. In the
absence of certainty in ultimate collection the amount is not
qualifying as an income (AS - 9) (Revenue Recognition) of ICAI. Had the
company would have not been recognised the said income the profit would
have been reduced to the extent of Rs. 31.23 lacs and the consequential
reduction in Receivables to the extent of Rs. 31.23 lacs during the
year.
Qualified Opinion:
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matters
described in the Basis for qualified opinion paragraph above, the
aforesaid standalone financial statements give the information required
by the Act in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India,
of the state of affairs of the Company as at 31st March 2015 and its
profit and its cash flows for the year ended on that date.
Emphasis of matters:
We draw attention to the following matters in the notes to the
financial statements;
(i) Note No.6 (Long term Provisions) of the financial statement, where
the company has made the provision for gratuity as per AS-15 ( Employee
Retirement Benefit) amount of Rs. 45.85 lacs as per actuarial
valuation; neither the company has created any planned asset nor
contributed to any recognised fund against the aforesaid liability.
(ii) Note No.18 (Other current assets) of the financial statement where
the company had recognised receivable amount of Rs. 114.51 lacs from
one of its employee committed fraud during the earlier financial year,
the company has filed a legal suit against the employee and the same is
subject to judicial proceedings. The outcome of the ultimate
realization and the legal suit is not known at present.
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, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in the paragraph 3 and 4 of the
Order, to the extent applicable.
(2) As required by Section 143 (3) of the Act, we report that:
a) we have sought and obtained all the information and explanations
which to the best of 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 the Company so far as it appears from our examination of those
books;
c) the balance sheet, the statement of profit and loss and the cash
flow statement dealt with by this Report are in agreement with the
books of account;
d) in our opinion, the aforesaid standalone financial statements comply
with the Accounting Standards specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014;
e) on the basis of the written representations received from the
directors as on 31st March 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March 2015
from being appointed as a director in terms of Section 164 (2) of the
Act; and
f) with respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. the Company has disclosed the impact of pending litigations(Note-18)
on its financial position in its financial statements.
ii. the Company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses, if any,
on long-term contracts including derivative contracts(Note28). and
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT
The Annexure referred to in our Independent Auditors' Report to the
members of the Company on the standalone financial statements for the
year ended 31st March 2015, we report that:
(i) a) According to the information and explanations given to us the
Company is in process of maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) As explained to us the Company has a regular programme of physical
verification of its fixed assets by which fixed assets are verified in
a phased manner over a period of three years. In accordance with this
programme, certain fixed assets were verified during the year and no
material discrepancies were noticed on such verification. In our
opinion, this periodicity of physical verification is reasonable having
regard to the size of the Company and the nature of its assets.
(ii) a) According to the information and explanations given to us the
company has conducted physical verification of inventory at reasonable
intervals during the year.
b) According to the information and explanations given to us the
procedures of physical verification of inventory followed by the
management is reasonable and adequate in relation to the size of the
company and the nature of the business.
c) According to the information and explanations given to us the
Company is maintaining proper records of inventory and there were no
material discrepancies noticed on physical verification.
(iii) a) According to the information and explanations given to us the
Company has not granted any loans to the bodies corporate covered in
the register maintained under section 189 of the Companies Act, 2013
('the Act').
b) As there is no case of the loans granted to the bodies corporate
listed in the register maintained under section 189 of the Act,
Accordingly, paragraph 3(iii) (b) of the Order is not applicable to the
Company in respect of repayment of the principal amount.
c) According to the information and explanations given to us there are
no overdue amounts of more than rupees one lakh in respect of the loans
granted to the bodies corporate listed in the register maintained under
section 189 of the Act.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and sale of goods and
services. We have not observed any major weakness in the internal
control system during the course of the audit.
(v) According to the information and explanations given to us, the
Company has not accepted any deposits from the public.
(vi) The Central Govt. has prescribed maintenance of cost records under
section 148(1) of the Companies Act 2013 in respect of manufacturing
activities of the Company.We have broadly reviewed the accounts and
records of the company in this connection and are of the opinion that
prima facie, the prescribed accounts and records have been made and
maintained. We have not, however, made a detailed examination of the
same.
(vii) a) According to the information and explanations given to us and
on the basis of our examination of the records of the Company, the
company is regular depositing the undisputed statutory dues including
provident fund, Employee's state insurance, income tax, sales tax,
wealth tax, service tax, duty of customs, duty of excise, value added
tax, cess and any other statutory dues with the appropriate
authorities. And there is no arrear of outstanding statutory dues at
the last day of the financial year concerned for a period of more than
six months from the date they became payable.
b) According to the information and explanations given to us, the
disputed amounts payable in respect of provident fund, income tax,
sales tax, wealth tax, service tax, duty of customs, value added tax,
cess and other material statutory dues aggregating to Rs. 214.48 lacs
that have not been deposited on account of matters pending before the
appropriate authorities are as under
Sl. Name of Nature of Amount Period to which
No. the Statute the Dues (Rs. In the amount
Lacs) relates
01. Sales Tax Statue Sales/Comm- 4.98 1990-91
of the State ercial Tax
02. Central Excise Excise Duty 18.39 2011-12
Act, 1944
03. Central Excise Excise Duty 18.92 2010-11
Act, 1944
04. Central Excise Excise Duty 116.67 2012-13
Act, 1944
05. Central Excise Excise Duty 55.52 2013-14
Act, 1944
TOTAL 214.48
Name of the Statute Forum where dispute is pending
Sales Tax Statue of
the State Before the Hon'able High Court of Chhattisgarh
Central Excise Act, 1944 Commissioner (Appeal)
Central Excise Act, 1944 CESTAT
Central Excise Act, 1944 CESTAT
Central Excise Act, 1944 CESTAT
c) According to the information and explanations given to us the
company has remitted the amount which were required to be transferred
to the investor education and protection fund in accordance with the
relevant provisions of the Companies Act, 1956 (1 of 1956) and rules
there under has been transferred to such fund within time.
viii) According to the information and explanations given to us the
Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the financial year
and in the immediately preceding financial year.
ix) According to the information and explanations given to us the
Company did not have any outstanding dues to financial institutions,
banks or debenture holders during the year.
x) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
xi) According to the information and explanations given to us the term
loans mainly applied for the purpose for which the same loan have been
obtained during the year.
xii) According to the information and explanations given to us, no
material fraud on or by the Company has been noticed or reported during
the course of our audit.
For, R.K.Singhania & Associates
Chartered Accountants
Firm Registration No. 004435C
Date: 30th May 2015 Ramesh Kumar Singhania
Place: Raipur Partner
Membership No. - 041880
Mar 31, 2014
We have gydded the accompanying financial statements of Mahamaya Steel
Industries Limited ("the Company"}, which comprises of the Balance
Sheel seat March 31.2014,the Statement of Profit and Loss account and
ihe Cash Flew Siaia meat for Ihe year then andad and a sum Tiary of
significant scwunflngpolicies and other explanatory intonmatiop
Management's Raspersibility for the Financial Statements:
The Company's Management is responsible for the preparation of these
financial statements the 111 v
Audiors' Responsibility:
Curitesponslaility in. 1c express an opinion on these financial
statement based on our audit. We conducted our audit in accordance w.ih
the Standards or Auditing issued by ihe Institute of Chartered
Accountants of India. Those Standards require lhal wo comply with
ethical nquiremoiitfl and c an and perform the aurtino obtain
reasonable assurance about whether (he fins ncial state mien Is ara
Frea From materia I mba tats manta.
An and involves performing procedures lo oblain audit evidence about
1he amounts and disclosures in Ihe financial statements. Thu procedures
se'ecled depend on 1he aucilor's lodgment, Including ihe assessment of
Ihe risks of material misstatement of Hie financial statements, whether
due to fraud or error. In making those rsk assessments, 1he audilor
censders internal conlrol relevant to the Company's preparation and
fair presentation of (ho financial statement in orxter to design audit
procedures lhat are appropriate in Ihe circumstances, but no1 for The
purposes of expressing an opinion on ire effectiveness cf the Company's
interna1 control. An aud 1 also includes vaUating the appropriateness
of accounting policies used and the reasonableness cl the account ug
estimates made by the management as wellaseva uating the overall
presentation of Ihe financial statements.
We believe that the aud 1 evidence we have obtained .f, sufficient and
appropriate lo provide a basis of our audit opinion.
Basis for qualified opionion :
(i) Reference is invited to note 3D (a) ctea ling with eiectecity duty
exemption The Compa ny paid power charges during 1he year and out of
1he total amount has reduced an amount of 7 2M.35 lacs from it. This
arr:ount instead of be ng treated as expendiiure has been recognized as
an asset under the head eleclncily duty receivable. It is claimed by
the
Company that under (he industrial policy oF 1he SLaLe oF Chhatlisgarh
this amount is reimbursable to We company as etetlritily duly subsidy,
flic &amo treatment was also done in the earlier years and aggregate
amount wtlkh Stood receivable as on the start of 1he financial year
under review was 7 301 34 lacs. We have no1 been prow ded with copies
of any sanction letter from the competent authority of me Government or
any other document in support of the racovarabjlity Of the said amount
of suos:dy. Therefore in the absence of reasonable certainty, as
regards dibmate collection of the same, oven after passage -of
significant time the noove recognition is no; in accordance willr
accounting Standard. The profit for the year and long term advances is
overstated to the extent of 7 254.35 lacs. The cumi Mali vie effect on
reserves and surplus and assets is 7 655 59 lacs.
{2) Reference is invited lo note number 30 (b) dealing with a Fnar-byl
fraud reported by the Company ft has been informed to us that after end
of the financial year 2012-13. (he management came to kit mat during
200S to 201 3 one of the employees work ng in Accounts Department of
the Company had committed fraud by fabrication of bills and Goods
Receipt Notes in respect of Store purchases. The quantum a^grogatcdi to
Â¥ 11A 51 lacs. The company has lodged first information report with
Police Department. The company m view of Its hope for recovery of me
said amount has treated the amount of T 114.61 lacs as amount
recoverable (asset) from the said person The corresponding effect has
reduced current year expenses and thereby has the effect of
overstatement of profit as well as current assets for the year by 7
114.51 lacs. This treatment, in cu r op. niori is not in accordance
with accounting standard as the reasonable certainty of
recovarabStytifamtiUnt in queslion is nol fully established.
Qualified Opinion:
In our opinion and to the best of our informahon and according (o l-.e
explanations given lo us, except for Cfre effects of the matter
described m paragraph afiove lg Basis of qualified opinion the
aforesaid financipi statements $ ive the information req uired by the
Act in the manner so required and give a trtje and fan view in
conformity with the accounting principles genera ly accepted in India:
(a) In the case of the Balance Sheet, of Lie state of affa rs of the
Company as at March 31, 2014;
{b) In (he case ol 1he Statement of Profit and Loss, o1 the Rrofit for
the year ended on that dateiand
(c) In the case of the Cash Flow $ig lemeni, of the cash flows for the
year ended on Ih&t date.
Emphasis of Matter:
(a} Your attention is mviled towards Note Number 30 (c) dealing with
charging of interest from outstanding debtor. "mo total impact on the
profttabi ty during tho year under review is <;S2.33 rare.
(b) Your aftenlion is invited to No1e Number 30 (I) where it is staled
Lha( Ihe Company is of the opinion that separate segment wise reporting
is not called farm view of me fact that entire revenue of the Company
is from structural manufactunng and all business adivifies are in India
only. The operations of Gas Plant and SMS are mainly for captive use
barring insignificant gross revenue of ¥ 195-1.50 lacs from sale of
Btoornsf Bilfets to cuftsido parties.
Report on Other Legel and Regutatory Requirements:
1. As required by 1he Companies (And tor's. Reoan) Order. 2003 ('the
Order'}, as amended, issued by the Ccnlnti Government of India in terms
oTSeclten 227(4A) of the Apt, we give in the An nexure a statement on
the matters specified In parag rgphs A grid 5 of the Order.
2. As required hy Section 227(4) of the Apt. we report that:
(a] we have obtained an the Information and explanations which to the
best of our knowledge and belief were neces-Eary fer the purpose of gu
r audit.
(b) Except (or the effect of matter described in pa rag raph: 'basis of
uahfied opinion, in cu.r opin :on proper books of account as requi red
by law havo been kept by the Company so far as appears from our
examination of those books.
(c) The Balance Sheet, the Statement of Protit and Less, and the Cash
Flow Statement dealt witnby this Report are m agreement wlthlhe books
of account.
(d) Except for the effect of matter described in paragra ph 'basis of
qual ified opinion', In our opin on the Balance Sheet, the Statement of
Profit and Loss, and the Cash Flow Statement dealt wtih by this report,
read together with Significant Accounting Polities and Notes there on,
are in compliance wilh the Accounting Standards referred to in section
211{3C) oftheAct.
(e} On the basis of written representations received from the directors
ae on March 31, 2014, taken on record by the Board ot C'rectors, none
ot the d'rectors is tfisqua lilted as on March 31,£Gt4, from being
appointed as- a director n terms of Section £74(1) (g} of theAct.
RE: MAHAMAYA STEEL INUSTRIES LIMITED
REFERRED TO EN PARAGRAPH 2 OF REPORT ON OTHER LEGAL LEGAL
HEQUIRElVlE NTS PAR A OF OUR R EPORT 01- EVEN DATE:
1. In reaped of its fixed assats:
a. The company is in the process- of computerization of its manually
maintained reoond-s of (bed assets. The process- has nci been fully
completed ti tiling the year under review. Therefore records showing
particulars including quantilakve details and sHualion of fixed assets
arc nut fully maintained. The identifitiliun marks on asSnlS liavc alSu
not been fully complelec.
b. Although 8 has been explained to us. that all fixed assets have
been physically venfied by the management d uring the year, In a phased
periodi«tl manner, however :n the absence of supporting documents
particularly Identification marks we are unable to state on the
reasonableness of such verificalton. having reganJ to tho size of the
Company and nature of its assets. As informed touS, ne material
discrepancies were noticed an suti physical verification.
c. In our opinion, the Company has not disposed off a su aslant a I
part of its fined assets du ring the year a nd rne gci ng concern
status of the Company is not affeded-
2. In respect of its inventories:
a. Although it has been explained to us that the management at regular
intervals, during the year, has physically vended Inventories However m
the absence of supporting documents wo ate u
b. Ea 56 d on our scrutiny of records rriainta nad by the company we
are of the opinion that the company has ma ntained proper records in
respect of its inventories. It has been informed to us that the company
has carried out physical verification of inventory from I me to time
and discrepances noted dtir.og physical verification have neon
accounted for mthe nooks of accounts of the company,
3. In respect of the loans, secured or unsecured, granted cr taken by
tha company to i from companies, firm or other parlies covered: n the
register ma ntained under Section 3£H of the Companies Act, 1656:
a. The Company has not granted loan during the year to any party
covered under section 301. Therefore our reporting an terms and
conditions and overdue amount is not tilled For. However the Company,
in the past had advanced a sum of T 1000 lacs 1c associates as share
application money, The said company nas not so faraFiotied shares ega a
si the said sum
b. The com cany has not taken roan d uring the year from any parly
covered under section 301 The outstanding balance in resoect of loan
taken in earlier period as at 31 March 2014 was 3 965.00 Lacs.
c. The terms and conditions ter Ihe said loan havs no: bear
communicated 1o lie and 1hjs we are unable lo opine on whether terms
areprima facie prejudicial to the interest or not? and whether any
amount is overdue or not 7. The company has neither paid nor provided
any interest on the said loan.
4. In our opinion and according Lo too information ard explanations
given to u6,1h tough reports of Internal Aud'lora conveying thaL there
are- adequate internal conlrols procedures commensurate vxiih the size
of the company ana nature af its business For ihe purchase of nventary,
fixed assets and also forthe sale of goods. During 1he course of our
aud it, we have not observed any major wea Kress in internat cor.lrol.
5. In respoeL el Iransactions covered under Section 301 of the
Companies Act, 1956
a. In a let opinion and according tn 1he information and explanations
given 1o us. the transactions trade in pursuance of conlracls or
agreements, that neec ed 1o be entered intolhe register maintained
under Section 301 oflhe Companies Ad. 19$6 hsvybeensy entered
b. We have not been provided with all necessary information on the
subject and therefore we are unable to slate whether transactions in
pursuance of contracts ar agreement, entered n the register mantained
under Section 301 of 1he Companies Ad, 1556 aggregating duringihe year
to 7 s.nO.OOQf- (Rupees Flue Lare^or more In respect of any party n ihe
said financial year are prime Facie reasonable cr not. having regard lo
the pra va "ling market proes a1 th.e relevant time.
6. According ty thy Information and explanations given 1n us Ihy
Company has nyl accepted any deposits from ifte public Therefore Ihe
provisions of clause 4 (vi) yf we Companies {Auditor's Report) Ortfer,
2W3 are not applicable to 1he Company,
7. In ouropinion, anO based on information and explanationgivenlous,
IWs Rejesh-J Agarwar 4 Co, Chadereo Accountants Raipurconduded internal
audil function of the company. They were given Hie responsibility of
making verification of all transactions end to report on monthly haste-
We have gone tbrough their reports and wy have been Informed teat all
Ihe snortcomlngre observed by them have been reolHieeF. Hence, wo haw
retied upon the internal audit report.
8. The cost records pursuant to the Companies (Cost Accounting
Records? Rufes, 2011 prescribed by the Ce ntal Government under section
209(1) {d j of the Companies Act 1956 have not been seen by us. We have
been informed that applicable cost audit o: s.:cn records FSSfi II tn
progress,
9. A. According to the records of Ihe Company and based on
information-and Explanations made available to ua. undisputed statutory
cues including ProvderU Fund, Investor Education anc Protection Fund
{if any?, Employees' State Insurance, Income- Tax, Sates-Tax,
Commercial Tax. Wealth T&y. Service Tax. Customs Duly. Endse Duty, Cess
and other statutory dues haw been generally regularly deposited with
the appropriate aulftorities (H any>. According to ihe inform all on
and explanations given to us, no undisputed amounts of nature mentioned
above payable in respect of the aforesaid dues were outstanding as gt
311* March, 2016 ft>r a period of more than six monihs from ihe date of
becoming pay able.
B. The disputed s1a1u1ory dues aggrega1ing to 7 2291.GO Lacs. mat have
nol been deoositod or account of matters pending before the appropriate
authorities are as under
SI Name of Nature of Amount Period to which
No. the Statute the Dues Rs In the amount
Lacs] relates
01. Sales Tan Statue Sales/Comm- 4.98 1990-1991
of the State ercial Tax
02. Cenlral Excise Excise Duty 16.39 2011-2012
Act. 1944
03. Cenlral Excise Excise Duty 16.92 2010-2011
Act. 1944
04. Central Exds* Excise Duty 116,67 2012-2013
Act., 1944
05. Income Tax Tax and 2132.04 2005-06 to
Act. interest 2011-12
Demand
TOTAL 2331.00
SI Name of Forum who re- dispute
No. the Statute is pending
01. Sales Tan Statue Before the High Court of
of the State Chhattisgarh, Bilaspur
02. Cenlral Excise Commissioner [Apoea I)
Act. 1944
03. Cenlral Excise CESTAT
Act. 1944
04. Central Exds* CESTAT
Act., 1944
05. Income Tax CIT (Appeal )
Act.
16. The Company does not have any accumulated losses at the end oflhe
financial year and has net i n tuned cash losses during Ihe financial
year covered by the a Lid :L ard in the in mediately preceding financial
year.
11, Based on our audit procedures and according to Die Information and
explanations given to us, we erectthe opinion that the company has not
defaulted in repayment of dues tofirancia nslilulions, ba nks a - d
debenture holders.
12. In our opinion and accercing to 1he information and explanations
given lo us. no loans and advances haw Peon granted by toe Company on
tie basis or security by way of pledge or shares debentures ar.d other
securities,
13. In our opinion, and according to 1he information 6 explanations
given to vs, 1Pe Company is net a chit fond or a nidhi.'mutuaE benefit
fundrsociety. Therefore, clause 4(xiii) of the Companies {Auditor's
Report) Order 2C03 fas amended) is nol applicants 1o the Company
14, According 1o the information and explanation given lo tie, tho
Company has maintained proper records of in wsiments made by it pvt Pas
not entered In to transactions end contracts n reaped of dealing or
tracing in shane-s. securities, decanlures. The Company in its own name
has held all investments.
15. As informed to us, the Company has not given any guarantees for
loan taken by a body corporate from Panks or any oOierfinancial
institutions
16. As informed to us. the Company has not 'aised now term loans from
hanks during tho year. The term loans outstanding a1 the beginning of
the year have been applied for the purposes for which Ihey were raised.
17. According to the information and explanations given to us ard on
an overall examination of tire Balance Street of Ihe Company, we iar*
of the opinion that llic Company has not utilized money from shcwt-femi
sovrees icwards repayment of long-term borrowings scquteMlon of fixed
assets ana for ler.g te rm investments.
18. During Ihe year, Iha Company has not made preferential a'lptment of
shares to parties and Companies WvSred in 1he Register maintained under
Seelies 301 dt Ule Companies Act, 1956.
19, According 1» the information and eypr-^n&lions given to us, during
the year covered by our audit report, the company hga not 'ssued any
debentures.
20. During the year covered by our audit report, the company has rot
raised money byway oF public issue.
21. As disclosed by the management in ."ote number 30 (b) a fraud by one
oF the employee was reported during ths year under review, it has boon
informed to us that afw end of Ihe financial year 2012-13 the management
came to know that during 2003 to 2013 one of the employees working in
Accounts Department of the Company had committed fraud by fabrication of
Dins and Goods Receipt Notes in rosped of Stow purchases The quantum
aggregated to ¥ 1 in.51 lacs, The company has todged first Information
report with Police Department, We have been informed by the management
and to the best of
For, BATRACEEPAK A. ASSOCIATES
CHARTERED ACCOUNTANTS
(Registration No.005408C)
Place : Raipur [DEEPAK BATRAJ
Date ; 30th May, 2014 PARTNER
Membership no.74052
Mar 31, 2013
Report on the Financial Statements:
We have audited the accompanying financial statements of Mahamaya Steel
Industries Limited (the Company"), which comprise itie Balance Sheet as
at March 31,2013, the Statement of Profit and Loss and the Gash Flow
Statement tor tha year then ended and a summary ol significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements.
The Management is responsible for the preparation of these financial
statements thai give a true and (air view ol the hnancial position,
financial performance and cash Hows of the Company in accordance *iih
the accounting principles generally accepted in India including
Accounting Standards relerred to in Section 211(3C) of the Companies
Act, 19&6 ("Itie Act"). This responsibility includes the design,
implementation and maintenance ol internal control relevant to the
preparation and presentation ol the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error
Auditors'' Responsibility:
Ou r responsibil ity is to express an opinion on these financial
statements based on our audit, We conducted our audit in accordance
with Ihe Standards on Auditing issued by the Institute ol Chartered
Accountants of India. Those Standards requi re that we comply with
ethical requi rements and plan and perform the a udit to ootai n
reasonable assurance about whether Ihe f i nancial statements are free
from material mi sstatements.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment ol
the risks ol material misstatement of the financial statements, whether
due to fraud or error.
In making those risk assessments, the auditor considers internal
control relevant to the Company''s preparation and fair presentation ol
the hnancial statements in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by the management, as well as evaluating
the ova rail presentation of the financial statements.
We believe that (he audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion:
In our opinion and to the best of our inlormation and according to the
explanations given to us. subject to para 2 (d) of report on other
tegat and Regulatory requirement and subject to emphasis of matter the
aforesaid financial statements give Ihe information required by tha Act
in Ihe manner so requi red and give a true and fair view in conformity
with ihe accounting principles generally accepted in India:
(a) In the case of Ihe Balance Sheet, of the state of affairs of Ihe
Company asat March 31. 2013:
b) In the case of the Statement of Profit and Loss, ol the Profit for
the year ended on that date; and
(c) In the case of the Cash Flow Statement, o! the cash flows for the
yea r ended on thai date.
Report on Other Legal and Regulatory Requirements:
1. As required by the Companies (Auditor''s Report) Order 2003 (the
Order") issued by the Central Government of India in terms of Section
227(4A) of the Act. we give in ihe Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order. 2. As requi red by
Section 227(3) ol the Act. we report that:
[a) We have obtained all the information and explanations which to the
besl of our knowledge and belief were necessary for the purpose ol ou r
audit;
(b) In our opinion, proper books ol account as required bylaw have been
kept by me Company so far as appears from our examm ation of those
books,
(c> The Balance Sheet, Ihe Statement of Prolil and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) I n our opinion, the Balance Sheet, the Statement of Profit and
Loss. and the Cash Flow Statement dealt with by this report, read
together wrth Significant Accounting Policies and Notes there on, are
in compliance with the Accounting Standards referred to in section 211
(3C) of the Act;
(e) On the basis of written representations received from the directors
as on March 31.2013, taken on record by the Board of Directors, none of
the directors is disqualified as on March 31. £013, from being appoi
nted as a di rector in terms of Section 21A (1 )(g) of Ihe Act.
Emphasis of Mailer:
(a) We invite your attention to note 30(a) dealing with search
operations by Excise Department. The company has accepted ihe findings
of Excise Department about excess stock of 1£65.l 96 MT found during
the course of search amounting to 466.69 lacs, the same is duly
recorded in Ihe books of accounts of ihe company. Simultaneously
company has also recorded for reduction in raw materials of SMS
Division by 1590.000 MT.
(b) Your attention is invited towards Note No. 30(b) dealing with
electricity duty exemption. The total impact on the profrtabil ity du
ring the year under review i s 301.34 lacs i n which f. 159.79 lacs
pertains to Accounting year 2011 -12 but has been accounted as income
lor the period under review.
ANNEXURE TO INDEPENDENT AUDITORS REPORT RE: MAHAMAYASTEEL INDUSTRIES
LIMITED
REFERRED TO IN PARAGRAPH 2 OF REPORT ON OTHER LEGAL* LEGAL REQUIREMENTS
PARA OFOURREPOHTOFEVENDATE:
1. In respect of its lixed assets:-
a. The company has manually maintained records showing lull including
quantitative details and situation of fixed assess. It has been further
informed to us that compulenzed fixed assets register of the company is
undercompilalion,
o. As explained to us, fixed assets have been physically vertlied by
the management on periodical intervals, which in our opinion is a fair
practice, having regard to the size of ihe Company and nature of its
assets.
c. The Company has not disposed off substantial part of fixed assets
during the year and the going concern status of the Company is not
affected.
2. In respect of its inventories:
a. As explained to us, inventories were physically vended during the
year by me management at reasonable intervals.
b. In our opinion and according to the information and explanations
given to us, the procedures of physical verif icahon of inventories
followed by the management were reasonable and adequate in relation to
the size ol the Company and the nature of its business,
c. Based on our scrutiny ol records maintained by the company we are
of Ihe opinion that the company has maintained proper records in
respect of its inventories. II has been informed to us that the company
has carried out physical verification ol inventory from time to time
and discrepancies noted during physical verification have been
accounted for in the books of accounts of the company In this regard we
draw attention to note No.30(a) of Notes on Account wherein the company
has disclosed impact of stock variation during physical verification by
Excise Department.
3. In respect of the loans, secured or unsecured, granted or taken by
the company Id /from companies, f i mn or other parties covered m the
register maintained under Section 301 of the Companies Act, 1956:
a. The Company has not granted loan during the year lo any party
covered under section 301. Therefore our reporting on terms a nd
conditions and ove rdue amount is not called for,
b. The company has taken loan of ? 1021.00 lacs during the year from
two companies. The outstanding balance as at March 312013 was f 1020.00
Lacs.
c. In our opinion and according to the information and explanations
given to us. the rale of interest. wherever applicable and other terms
and conditions are not prima facie prejudicial to the interest of the
Company.
d. There is no overdue amount in respect of loanstaken by the Company.
4. In our opinion and according to the inlormation and explanations
given lo us, there are adequate Internal control procedures
commensurate with the size of the company and the nature of its
business for the purchase ol inventory. Iixod assets and also sale ol
goods in services. It has been informed by the management that dutmg
the year one ol the employee working in Accounts Department committed
fraud by using forged bills and Good Receipt Notes. The matter is under
investigation. Although no impact ol this iraud has been recorded in
ihe books of accounts ol the company, However, the management expects
total amount involved to be ol f. 1.15 crores. Other than this we have
neither Icome across nor have been informed by any continuing failure
to correct major weakness of internal control system.
5 In respect of transaction 5 covered under Section 301 of the
Companies Act. 1956
a. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance ol contracts or
agreements, that needed to be entered into me register maintained u
nder Section 301 of the Compan ies Act, 1956 have bee n so entered,
b. In our opinion and according to the information and explanations
given to us, transactions in pursuance of contracts or agreements,
entered in the register maintained under Section 301 of the Companies
Act, 1356 aggregating during the year Id t 5.00.000/- (Rupees Five
Lacs) or more in respect of any party in the said financial year are
prima facie reasonable having regard to the prevailing market prices at
the relevant time.
6, According to the information and explanations given to us, the
Company has not accepted any deposits Iromthe public. Therefore the
provisions of clause 4 (vi) of the Companies (Auditor''s Report) Order,
2003 are not applicable to the Company.
7, In our opinion, Ihe internal audit system ol the Company is
commensurate with ils size and nature ol its business.
6 The cost records pursuant to the Companies (Cost Accounting Records}
Rules, 2011 prescribed by the
Central Government under section 209(1 )(d) of the Companies Acl 1956
have not been seen by us. We have been informed that applicable cost
audit of such records is sltll in progress.
9. A. According to the records 0! Ihe Company and based on
information and explanations made available to us, undisputed statutory
dues including Provident Fund, Investor Education and Protection Fund
(il any), Employees'' State Insurance. Income-Tax. Sales-Tan, Commercial
Tax. Wealth Tax, Service Tax. Customs Duty. Excise Duty. Cess and
olher statutory dues have been generally regularly deposited with the
appropriate authorities [if any), According to the information and
explanations given lo us. no undisputed amounts of nature mentioned
above payable in respect of the aforesaid dues were outstanding as at
31'' Ma rch. 2013 for a period of more than six months from the dateof
becoming payable.
10. The Company does not have any accumulated losses al the end ol the
financial year and has not incurred cash losses during the financial
year covered by Ihe audit and in the immediately preceding financial
year.
11. In our opinion and according to the information and explanations
given to us. the company has not defaulted in repayment of dues to any
Financial Institution or Banks.
12. In our opinion and according to the information and explanations
given to us. no loans and advances have been granted by the Company on
the basis of security by way of pledge of shares, debentures and other
securities
13. In our opinion and according to the information & explanations
given to us. the Company is not a chit fund or a nidhi/mutual benefit
fund>society. Therefore, clause 4(xiii> of the Companies (Auditors''
Report) Order 2003 (as amended) is not applicable to the Company.
14. According to the information and explanation given to us. the
Company has maintained proper records ol investments made by it but has
not entered in to transactions and contracts in respect ol dealing or
trading in shares, securities, debentures. All investments have been
held by the Company in its own name.
15. As informed to us, the Company has not given any guarantees for
loan taken by a body corporate from banks or any other financial
institutions.
1G. As informed to us, the Company has not raised new term loans from
banks during the year, The term loans outstanding at the beginning of
the year have been applied for me purposes for which they were raised.
17. According lo the information and explanations given to us and on an
overall examination ol the Balance Sheet ol the Company, we are of the
opinion that the Company has not utilized money from short-term sources
towards repayment of long-term borrowings acquisition of fixed assets
and for long term investments.
13 During the year, the Company has not made preferential allotment of
shares to parties and Companies covered in the Register maintained
under Section 301 ot the Companies Act, 1956.
19. According to Ihe information and explanations given to us. during
the year covered by our audit report, the company has not issued an^
debentures,
20. During the year covered by our audit report, the company has not
raised money by way of public issue.
21. We have been inlormed by the management and this is also disclosed
in note No.30{c) that the company has noticed that one of its employees
has committed fraud. The matter is under investigation. The details
can be seen in the said note. To the best ol our knowledge and belief
and according to the information and explanation given to us no olher
material fraud noticed or reported during the year, that causes the
financial statements to be materially misstated-
For. BATRA DEEPAK S ASSOCIATES
CHARTERED ACCOUNTANTS
(Registration NoOOWQBC)
Place : Raipur [DEEPAK BATRA]
Date 30 May, 2013 PARTNER
Membership No,74052
Mar 31, 2012
We have audited the attached Balance Sheet of MAHAMAYA STEEL INDUSTRIES
LIMITED, (the Company) as at 31st March. 2012. the Profit & Loss
Account and the Cash Flow Statement (financial statements) of the
Company for the year ended on that date annexed thereto signed by us
under reference to this report. These financial statements are the
responsibility of the Company's Management. Our responsibility is to
express an opinion on these financial statements, based on our audit.
1. We conducted our audit in accordance with the Auditing Standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatements An audrt
includes examining on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the Management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
2. As required by the Companies (Auditors Report) Order, 2003 (as
amended) issued by the Government of India, in terms of section
227(4A). of the Companies Act. 1956 and on the basis of such checks as
we considered appropriate and according to information and explanation
given to us, we enclose in the annexure hereto a statement on the
matters specified in paragraphs 4 and 5 of the said order.
3. Further to our comments in the annexure referred to in paragraph 2
above, we report that:
a) We have obtained all the information and explanations, which to the
best of 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 the Company so far as appears from our examination of those
books;
c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are m agreement with the books of account;
d) In our opinion, the Balance Sheet. Profit & Loss Account and Cash
Flow Statement dealt with by this report, read together with
Significant Accounting Policies and Notes there on, except for
accounting standard 15. (for detail please refer note 1 policy no 13 of
notes on accounts), are in compliance with the Accounting Standards
referred to In Section 211 (3C) of the Companies Act 1956;
e) We draw attention towards Note on Account 30 (a) and (b) dealing
with treatment of venation observed during search by Income Tax
department and Excise department respectively.
f) Based on written representations made by Directors of the Company,
taken on record by the Board of Directors, and the information and
explanations made available to us. we repot that none of the director
is prima facie disqualified as on March 31.2012 from being appointed as
a director in terms of sec. 274 (1)(g) of the Companies Act, 1956.
g) In our opinion and to the best of our information and according to
explanations given to us. the said accounts read together with
Significant Accounting Policies and Notes there on. but subject to para
(d) and (e) above, give the information required by the Companies Act
1956. in the manner so required, give a true and fair view in
conformity with the accounting principles generally accepted in India:
(i) in the case of Balance Sheet, of the state of affairs of the
Company as at 31st March 2012;
(ii) in the case of Profit & Loss Account, of the Profit for the year
ended on that date; and
(iii) in case of Cash Row Statement, of the cash flows for the year
ended on that date.
ANNEXURE TO AUDITORS REPORT
RE: MAHAMAYA STEEL INDUSTRIES LIMITED
REFERRED TO IN PARAGRAPH 2 OF OUR REPORT OF EVEN DATE:
1. In respect of its fixed assets:
a. The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
b. As explained to us, fixed assets have been physically verified by
the management under a phased programme of verification, which in our
opinion is reasonable, having regard to the size of the Company and
nature of its assets. As informed to us. no maternal discrepancies were
noticed on such physical verification.
c. The Company has not disposed off substantial part of fixed assets
during the year and the going concern status of the Company is not
affected.
2. In respect of its inventories:
a. As explained to us, inventories were physically verified during the
year by the management at reasonable intervals.
b. In our opinion and according to the Information and explanations
given to us. the procedures of physical verification of inventories
followed by the management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. The Company has maintained proper records of inventories. As
explained to us. there was no material discrepancies noticed on
physical verification of inventory as compared to the book records.
However, we draw attention to note no 30 a and b of notes on accounts
dealing with search operations conducted by Income tax department and
Excise department, during the year under review the company has
contested variation pointed out by Income Tax department and Excise
department. While no entry in books of accounts have been made in
respect of differences pointed out by Income Tax department, it has
given effect to differences pointed out by the Excise Department.
3. In respect of the loans, secured or unsecured, granted or taken by
the company to / from companies, firm or other parties covered in the
register maintained under Section 301 of the Companies Act. 1956:
a. The Company has granted loan of Rs. 17.00 lacs during the year to
one Company. There was no outstanding balance as at 31st March, 2012.
b. In our opinion and according to the information and explanations
given to us. the rate of interest, wherever applicable and other terms
and conditions are not prima facie prejudicial to the interest of the
Company.
c. There is no overdue amount in respect of loans granted by the
Company
d. The company has taken loan of Rs. 1.535.00 lacs during the year
from three companies. There was no outstanding balance as at 31 '
March 2012.
e. In our opinion and according to the information and explanations
given to us. the rate of interest, wherever applicable and other terms
and conditions are not prima facie prejudicial to the interest of the
Company.
f. There is no overdue amount in respect of loans taken by the
Company.
4. In our opinion and according to the information and explanations
given to us. there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business for the purchases of inventory, fixed assets and also for the
sale of goods and services. During the course of our audit, we have
neither come across nor have been informed of any continuing failure to
correct major weaknesses in internal control systems.
5. In respect of transactions covered under Section 301 of the
Companies Act. 1956:
a. In our opinion and according to the information and explanations
given to us. the transactions made in pursuance of contracts or
agreements, that needed to be entered into the register maintained
under Section 301 of the Companies Act. 1956 have been so entered
b. In our opinion and according to the information and explanations
given to us. transactions in pursuance of contracts or agreements,
entered m the register maintained under Section 301 of the Companies
Act. 1956 aggregating during the year to Rs.5.00,000/- (Rupees Five
Lacs) or more in respect of any party in the said financial year are
prima facie reasonable having regard to the prevailing market prices at
the relevant time.
6. According to the information and explanations given to us, the
Company has not accepted any deposits from the public. Therefore the
provisions of clause 4 (vi) of the Companies (Auditor s Report) Order.
2003 are not applicable to the Company.
7. In our opinion, the internal audit system of the Company is
commensurate with its size and nature of its business
8. The cost records pursuant to the Companies (Cost Accounting
Records) Rules. 2011 prescribed by the Central Government under section
209(1 )(d) of the Companies Act 1956 have not been seen by us. We have
been informed that applicable cost audit of such records is still in
progress.
9. a. According to the records of the Company and based on information
and explanations made available to us. undisputed statutory dues
including Provident Fund. Investor Education and Protection Fund (if
any). Employees' State Insurance. Income-Tax. Sales-Tax, Commercial
Tax. Wealth Tax. Service Tax. Customs Duty, Excise Duty, Cess and other
statutory dues have been generally regularly deposited with the
appropriate authorities (if any). According to the information and
explanations given to us. no undisputed amounts of nature mentioned
above payable in respect of the aforesaid dues were outstanding as at
31st March. 2012 for a period of more than six months from the date of
becoming payable,
b. The disputed statutory dues aggregating to Rs.24.80 Lacs, that have
not been deposited on account of matters pending before the appropriate
authorities are as under:
SI. Name of Nature of Amount
No. the Statute the Dues (Rs. In Lacs)
01. Sales Tax Sales/ 4.98
Statue of Commercial Tax
the State
02. Central Excise Duty 0.90
Excise Act. 1944
03. Central Excise Duty 18.92
Excise Act. 1944
TOTAL 24.80
Name of the State Period to which Forum where
the amount dispute is
relates pending
Sales Tax Statue of
the State 1990-1991 Before the High Court of
Chhattisgarh, Bilaspur
Central Excise
Act, 1944 2006-2007 Central Excise and Service
Tax Appellate Tribunal
Central Excise
Act, 1944 2005-2006 Asset Commissioner
2006-2007 (Appeal)
2007-2008
10. The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred cash losses during the
financial year covered by the audit and in the immediately preceding
financial year.
11. In our opinion and according to the information and explanations
given to us. the company has not defaulted in repayment of dues to any
Financial Institution or Bank.
12. In our opinion and according to the information and explanations
given to us. no loans and advances have been granted by the Company on
the basis of security by way of pledge of shares, debentures and other
securities.
13. In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, clause 4(xiii) of the Companies
(Auditor's Report) Order 2003 (as amended) is not applicable to the
Company.
14. The Company has maintained proper records of the transactions and
contracts in respect of dealing or trading in shares, secunties,
debentures and other investments and timely entries have been made
therein. All shares have been held by the Company In its own name.
15. As informed to us. the Company has not given any guarantees for
loan taken by a body corporate from banks or any other financial
institutions
16. As Informed to us. the Company has raised new term loans from
banks during the year. The term loans outstanding at the beginning of
the year and those raised during the year have been applied for the
purposes for which they were raised.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that the Company has not utilized money from short-term
sources towards repayment of long-term borrowings acquisition of fixed
assets and for long term investments.
18. During the year, the Company has not made preferential allotment of
preference shares to parties and Companies covered in the Register
maintained under Section 301 of the Companies Act. 1956.
19. According to (he information and explanation given to us. during
the year covered by our audit report, the company has not issued any
debentures.
20. During the year covered by our adult report, the company has not
raised money by way of public issue.
21. To the best of our knowledge and belief and according to the
information and explanations given to us. no material fraud on or by
the Company has been noticed or reported during the year, that causes
the financial statements to be materially misstated.
Place: Raipur For. BATRA DEEPAK & ASSOCIATES
Date: 13th August. 2012 CHARTERED ACCOUNTANTS
(Registration No.005408C)
(DEEPAK BATRA)
PARTNER
Membership No.74052
Mar 31, 2011
We have audited the attached Balance Sheet of MAHAMAYA STEEL INDUSTRIES
LIMITED, (the Company) as at 31s1 March, 2011, the Profit & Loss
Account and the Cash Flow Statement (financial statements) of the
Company for the year ended on that date annexed thereto signed by us
under reference to this report. These financial statements are the
responsibility of the Company's Management. Our responsibility is to
express an opinion on these financial statements, based on our audit.
1. We conducted our audit in accordance with the Auditing Standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatements. An audit
includes examining on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the Management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
2. As required by the Companies (Auditors Report) Order, 2003 (as
amended) issued by the Government of India, in terms of section
227(4A), of the Companies Act, 1956 and on the basis of such checks as
we considered appropriate and according to information and explanation
given to us, we enclose in the annexure hereto a statement on the
matters specified in paragraphs 4 and 5 of the said order.
3. Further to our comments in the annexure referred to in paragraph 2
above, we report that:
a) We have obtained all the information and explanations, which to the
best of 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 the Company so far as appears from our examination of those
books;
c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
Flow Statement dealt with by this report, read together with
Significant Accounting Policies and Notes on Accounts given in Schedule
T comply with the Accounting Standards referred to in Section 211 (3C)
of the Companies Act 1956;
e) Based on written representations made by Directors of the Company,
taken on record by the Board of Directors, and the information and
explanations made available to us, we report that none of the director
is prima facie disqualified as on March 31, 2011 from being appointed
as a director in terms of sec. 274(1 )(g) of the Companies Act, 1956.
f) In our opinion and to the best of our information and according to
explanations given to us, the said accounts read together with
Significant Accounting Policies and Notes on Accounts, given in
Schedule-T" give the information required by the Companies Act 1956, in
the manner so required, give a true and fair view in conformity with
the accounting principles generally accepted in India:
(i) in the case of Balance Sheet, of the state of affairs of the
Company as at 31sl March 2011;
(ii) in the case of Profit & Loss Account, of the Profit for the year
ended on that date; and
(iii) in case of Cash Flow Statement, of the cash flows for the year
ended on that date.
ANNEXURE TO AUDITORS' REPORT
RE: MAHAMAYA STEEL INDUSTRIES LIMITED^ (Formerly known as Rajesh Strips
Limited)
REFERRED TO IN PARAGRAPH 2 OF OUR REPORT OF EVEN DATE:
1. In respect of its fixed assets: -
a. The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
b. As explained to us, fixed assets have been physically verified by
the management under a phased programme of verification, which in our
opinion is reasonable, having regard to the size of the Company and
nature of its assets. As informed to us, no material discrepancies were
noticed on such physical verification.
c. The Company has not disposed off substantial part of fixed assets
during the year and the going concern status of the Company is not
affected.
2. In respect of its inventories:
a. As explained to us, inventories were physically verified during the
year by the management at reasonable intervals.
b. In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. The Company has maintained proper records of inventories. As
explained to us, there were no material discrepancies noticed on
physical verification of inventory as compared to the book records.
3. As informed to us, Company has not granted any loans, secured or
unsecured, to companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956. However, in
respect of unsecured loan taken from the companies covered in the
register maintained under Section 301 of the Companies Act, 1956, we
state that:
a. The Company has taken loan of Rs. 220.00 lacs during the year from
a Company. The balance outstanding as at 31 March 2011 was Rs. 220.00
lacs.
b. In our opinion and according to the information and explanations
given to us, the rate of interest, wherever applicable and other terms
and conditions are not prima facie prejudicial to the interest of the
Company.
c. There is no overdue amount in respect of loans taken by the
Company.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business for the purchases of inventory, fixed assets and also for the
sale of goods and services. During the course of our audit, we have
neither come across nor have been informed of any continuing failure to
correct major weaknesses in internal control systems.
5. lnrespectoftransactionscoveredunderSection301 of the Companies Act,
1956:
a. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
agreements, that needed to be entered into the register maintained
under Section 301 of the Companies Act, 1956 have been so entered.
b. In our opinion and according to the information and explanations
given to us, transactions in pursuance of contracts or agreements,
entered in the register maintained under Section 301 of the Companies
Act, 1956 aggregating during the year to Rs. 5,00,000/- (Rupees Five
Lacs) or more in respect of any party in the said financial year are
prima facie reasonable having regard to the prevailing market prices at
the relevant time.
6. According to the information and explanations given to us, the
Company has not accepted any deposits from the public. Therefore the
provisions of clause 4 (vi) of the Companies (Auditor's Report) Order,
2003 are not applicable to the Company.
7. In our opinion, the internal audit system of the Company is
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of accounts maintained by the
company pursuant to rules made by the Central Government, for the
maintenance of cost records under section 209(1 )(d) of the Companies
Act 1956 in respect of its SMS Plant and are of the opinion that prima
facie the prescribed accounts and records have been made and
maintained. We have, however not made a detailed examination of the
records with a view to determining whether they are accurate or
complete. To the best of our knowledge and according to information and
explanations given to us, the Central Government has not prescribed the
maintenance of cost records for any other product of the Company.
9. a. According to the records of the Company and based on information
and
explanations made available to us, undisputed statutory dues including
Provident Fund, Investor Education and Protection Fund (if any),
Employees' State Insurance, Income-Tax, Sales-Tax, Commercial Tax,
Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other
statutory dues have been generally regularly deposited with the
appropriate authorities (if any). According to the information and
explanations given to us, no undisputed amounts of nature mentioned
above payable in respect of the aforesaid dues were outstanding as at
31s' March, 2011 for a period of more than six months from the date of
becoming payable.
b. The disputed statutory dues aggregating to Rs. 78.35 Lacs, that have
not been deposited on account of matters pending before the appropriate
authorities are as under:-
Sl Name of the Nature of the Dues Amount
No.Statute (Rs. In Lacs)
01.Sales Tax Sales/Commercial Tax 38.27
statute of the
State
02.Central Sales Central Sales Tax 10.07
Tax statute of
the Central
Govt.
03.Central Excise Duty 3.65
Excise Act,
1944
04.Central Excise Duty 26.36
Excise Act,
1944
TOTAL 78.35
Name of the Statute Period to which the Forum where dispute
amount relatesis pending
Sales Tax statute of From Before the High Court
the State 1990-1991 to of Chhattisgarh,
1992-1993 Bilaspur
Central Sales Tax 2002-2003 Deputy
statute of the Commissioner (Appeals),
Central Govt. Raipur
Central Excise Act 2006-2007 Central Excise and
1944 Service Tax Appellate
Tribunal
Central Excise Act 2005-2006 2006-07 & Asstt. Commissioner
1944 2007-08 (Appeals)
10. The Company does not have accumulated losses at the end of the
financial year. The Company
has not incurred cash losses during the financial year covered by the
audit and in the immediately preceding financial year.
11. In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to any
Financial Institution or Bank.
12. In our opinion and according to the information and explanations
given to us, no loans and advances have been granted by the Company on
the basis of security by way of pledge of shares, debentures and other
securities.
13. In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, clause 4(xiii) of the Companies
(Auditor's Report) Order 2003 (as amended) is not applicable to the
Company.
14. The Company has maintained proper records of the transactions and
contracts in respect of dealing or trading in shares, securities,
debentures and other investments and timely entries have been made
therein. All shares have been held by the Company in its own name.
15. As informed to us, the Company has given guarantees for loan taken
by a body corporate from a bank. The terms and conditions of said
guarantee are not prima facie prejudicial to the interest of the
Company.
16. As informed to us, the Company has not raised any new term loans
from banks during the year. The term loans earlier availed have been
applied for the purposes for which these were raised.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that the Company has not utilized any money from short-term
sources towards repayment of long-term borrowings acquisition of fixed
assets and for long term investments.
18. During the year, the Company has not made preferential allotment
of preference shares to parties and Companies covered in the Register
maintained under Section 301 of the Companies Act, 1956.
19. According to the information and explanation given to us, during
the year covered by our audit report, the company has not issued any
debentures.
20. During the year covered by our audit report, the company has not
raised money by way of public issue.
21. To the best of our knowledge and belief and according to the
information and explanations given to us, no material fraud on or by
the Company has been noticed or reported during the year, that causes
the financial statements to be materially misstated.
For, BATRA DEEPAK & ASSOCIATES
CHARTERED ACCOUNTANTS
(Registration No.005408C)
[DEEPAK BATRA]
PARTNER
M.No.74052
PLACE : RAIPUR
DATE :28th MAY, 2011
Mar 31, 2010
We have audited the attached Balance Sheet of MAHAMAYA STEEL INDUSTRIES
LIMITED, (the Company) as at 31st March, 2010, the Profit & Loss
Account and the Cash Flow Statement (financial statements) of the
Company for the year ended on that date annexed thereto signed by us
under reference to this report. These financial statements are the
responsibility of the Companys Management. Our responsibility is to
express an opinion on these financial statements, based on our audit.
We conducted our audit in accordance with Auditing and Assurance
Standards generally accepted in India. Those Standards require that we
plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free from material misstatements. An audit
includes examining on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Companies (Auditors Report) Order, 2003 (as amended)
issued by the Government of India, in terms of section 227(4A), of the
Companies Act, 1956 and on the basis of such checks as we considered
appropriate and according to information and explanation given to us,
we enclose in the annexure hereto a statement on the matters specified
in paragraphs 4 and 5 of the said order.
Further to our comments in the annexure referred to in paragraph 2
above, we report that:
We have obtained all the informations and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit.
In our opinion, proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books.
The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt
with by this report are in agreement with the books of account.
In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow
Statement dealt with by this report, read together with Significant
Accounting Policies and Notes on Accounts given in ScheduleT comply
with the Accounting Standard referred to in Section 211 (3C) of the
Companies Act 1956.
We draw attention that audit is not intended, designed nor performed to
identify or detect problems that may result from the Computer software
or hardware.
Based on written representations made by Directors of the Company,
taken on record by the Board of Directors, and the information and
explanations made available to us, we report that none of the director
is prima facie disqualified as on March 31,2010 from being appointed as
a director in terms of sec. 274(1 )(g) of the Companies Act, 1956.
In our opinion and to the best of our information and according to
explanations given to us, the said accounts read together with
Significant Accounting Policies and Notes on Accounts, given in
Schedule-"T" give the information required by the Companies Act 1956,
in the manner so required, give a true and fair view in conformity with
the accounting principles generally accepted in India:
(i) in the case of Balance Sheet, of the state of affairs of the
Company as at 31st March 2010;
(ii) in the case of Profit & Loss Account, of the Profit for the year
ended on that date; and
(iii) in case of Cash Flow Statement, of the cash flows for the year
ended on that date.
ANNEXURE TO AUDITORS REPORT RE: MAHAMAYASTEEL INDUSTRIES LIMITED
(Formerly known as Rajesh Strips Limited) REFERRED TO IN PARAGRAPH 2 OF
OUR REPORT OF EVEN DATE:
1. In respect of its fixed assets: -
a. The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
b. As explained to us, fixed assets have been physically verified by
the management under a phased programme of verification, which in our
opinion is reasonable, having regard to the size of the Company and
nature of its assets. As informed to us, no material discrepancies were
noticed on such physical verification.
c. The Company has not disposed off substantial part of fixed assets
during the year and the going concern status of the Company is not
affected.
2. In respect of its inventories:
a. As explained to us, inventories were physically verified during the
year by the management at reasonable intervals.
b. In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. The Company has maintained proper records of inventories. During
physical verification of inventories 1690.000 MT. of Blooms has been
found in excess of the book records and the same has been considered in
valuation of closing stock.
3. As informed to us, Company has not granted any loans, secured or
unsecured, to companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956. However, in
respect of unsecured loan taken from the companies covered in the
register maintained under Section 301 of the Companies Act, 1956, we
state that
a. The Company has taken loan of Rs. 1877.50 lacs during the year from
one Company. The balance outstanding including opening balance of the
Company as at 31 March 2010 was Rs. NIL.
b. In our opinion and according to the information and explanations
given to us, the rate of interest, wherever applicable and other terms
and conditions are not prima facie prejudicial to the interest of the
Company.
c. There is no overdue amount in respect of loans taken by the
Company.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business for the purchases of inventory, fixed assets and also for the
sale of goods and services. During the course of our audit, we have
neither come across nor have been informed of any continuing failure to
correct major weaknesses in internal control systems.
5. ln respect of transactions covered under Section 301 of the
Companies Act, 1956:
a. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
agreements, that needed to be entered into the register maintained
under Section 301 oftheCompaniesAct, 1956 have been so entered.
b. In our opinion and according to the information and explanations
given to us, transactions in pursuance of contracts or agreements,
entered in the register maintained under Section 301 of the Companies
Act, 1956 aggregating during the year to Rs. 5,00,000/- (Rupees Five
Lacs) or more in respect of any party in the said financial year are
prima facie reasonable having regard to the prevailing market prices at
the relevant time.
6. According to the information and explanations given to us, the
Company has not accepted any deposits from the public. Therefore the
provisions of clause 4 (vi) of the Companies (Auditors Report) Order,
2003 are not applicable to the Company.
7. In our opinion, the internal audit system of the Company is
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of accounts maintained by the
company pursuant to rules made by the Central Government. For the
maintenance of cost records under section 209(1 )(d) of the Companies
Act 1956 in respect of SMS Plant and are of the opinion that prima
facie in prescribed accounts and records have been made and maintained.
We have, however not made a detailed examination of the records with a
view to determining whether they are accurate or complete. To the best
of our knowledge and according to information and explanations given to
us, the Central Government has not prescribed the maintenance of cost
records for any other product of the Company.
9 a. According to the records of the Company and based on information
and explanations made available to us, undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund (if
any), Employees State Insurance, Income-Tax, Sales-Tax, Commercial
Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other
statutory dues have been generally regularly deposited with the
appropriate authorities (if any). According to the information and
explanations given to us, no undisputed amounts of nature mentioned
above payable in respect of the aforesaid dues were outstanding as at
31st March, 2010 for a period of more than six months from the date of
becoming payable.
b. The disputed statutory dues aggregating to Rs. 56.62 Lacs, that have
not been deposited on account of matters pending before appropriate
authorities as under:-
Sl. Name of the Nature of the Amount Period to
which the Forum where
dispute
No. Statute Dues (Rs. In amount
relates is pending
Lacs) From
01 Sales Tax Sales/Commer 38.27 1990-1991 to Before High
Court of
statute
of the cial Tax 1992-1993 Chhattisgarh
State State
02 Central
Sales Central Sales 10.06 2002-2003 Deputy
Commissioner
statute of Tax (Appeals),
Raipur
the Central
Govt.
03 Central Excise 8.29 1999-2000 & High Court,
Excise Act, Duty
2005-2006 Bilaspur
11944I
Total 56.62
10. The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred cash losses during the
financial year covered by the audit and in the immediately preceding
financial year.
11. In our opinion and according to information and explanations given
to us, the company has not defaulted in repayment of dues to any
Financial Institution or Bank.
12. In our opinion and according to the information and explanations
given to us, no loans and advances have been granted by the Company on
the basis of security by way of pledge of shares, debentures and other
securities.
13. In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, clause 4(xiii) of the Companies
(Auditors Report) Order 2003 (as amended) is not applicable to the
Company.
14. The Company has maintained proper records of the transactions and
contracts in respect of dealing or trading in shares, securities,
debentures and other investments and timely entries have been made
therein. All shares, securities, debentures and other investments have
been held by the Company in its own name.
15. As informed to us, the Company has given guarantees for loan taken
by a body corporate from banks or financial institutions. The terms and
conditions of guarantees aforesaid are not prima facie prejudicial to
the interest of the Company.
16. As informed to us, the Company has not raised any new term loans
from bank during the year. The term loans earlier availed have been
applied for the purposes for which there were raised.
17. According to the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company, we are of the
opinion that the Company has not utilized any money from short- term
sources towards repayment of long-term borrowings acquisition of fixed
assets and long term investments.
18. During the year, the Company has made preferential allotment of
preference shares to parties and Companies covered in the Register
maintained under Section 301 of the Companies Act, 1956.
19. According to the information and explanation given to us, during
the year covered by our audit report, the company has not issued any
debentures.
20. During the year covered by our audit report, the company has not
raised money by way of public issue.
21. To the best of our knowledge and belief and according to the
information and explanations given to us, no material fraud on or by
the Company has been noticed or reported during the year, that causes
the financial statements to be materially misstated.
For, BATRA DEEPAK & ASSOCIATES
CHARTERED ACCOUNTANTS
(Registration No.005408C)
[DEEPAK BATRA]
PARTNER
M.No.74052
PLACE :RAIPUR
DATE : AUGUST 10, 2010
Mar 31, 2009
We have audited the attached Balance Sheet of MAHAMAYA STEEL INDUSTRIES
LIMITED, (the Company) as at 31st March, 2009, the Profit & Loss
Account and the cash flow statement (financial statements) of the
Company for the year ended on that date annexed thereto signed by us
under reference to this report. These financial statements are the
responsibility of the Companys Management. Our responsi- bility is to
express an opinion on these financial statements, based on our audit.
1. We conducted our audit in accordance with Auditing and Assurance
Standards generally accepted in India. Those Standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material
misstatements. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by Management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
2. As required by the Companies (Auditors Report) Order, 2003 (as
amended) issued by the Government of India, in terms of section
227(4A), of the Companies Act, 1956 and on the basis of such checks as
we considered appropriate and according to information and explanation
given to us, we enclose in the annexure hereto a statement on the
matters specified in paragraphs 4 and 5 of the said order.
3. Further to our comments in the annexure referred to in paragraph 2
above, we report that:
a) We have obtained all the information and explanations, which to
the best of 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 the Company so far as appears from our examination of those
books.
c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
Flow Statement dealt with by this report, read together with
Significant Accounting Policies and Notes on Accounts given in Schedule
T" comply with the Accounting Standard referred to in Section 211
(3C) of the Companies Act 1956.
e) We draw attention that audit is not intended, designed nor
performed to identify or detect problems that may result from the
Computer software or hardware.
f) Based on representations made by all the Directors of the Company
and the information and explanations made available to us, we report
that none of the director is prima facie disqualified as on March 31,
2009 from being appointed as a director in terms of sec. 274(1 )(g) of
the Companies Act, 1956.
g) In our opinion and as per information and according to the
explanations given to us, the accounts read together with Significant
Accounting Policies and Notes on Accounts, given in Schedule-"T" give
the information required by the Companies Act 1956 in the manner so
required, give a true and fair view in conformity with the accounting
principles gener- ally accepted in India:
(i) In the case of Balance Sheet, of the state of affairs of the
Company as at 31 st March 2009;
(ii) In the case of Profit & Loss Account, of the Profit for the year
ended on that date; and
(iii) In case of Cash Flow Statement, of the cash flows for the year
ended on that date.
RE: MAHAMAYASTEELINDUSTRIESLIMITED (Formerly known as Rajesh Strips
Limited)
REFERRED TO IN PARAGRAPH 2 OF OUR REPORT OF EVEN DATE:
1. In respect of its fixed assets: -
a. The company has maintained proper records show- ing full particulars
including quantitative details and situation of fixed assets.
b. As explained to us, fixed assets have been physi- cally verified by
the management under a phased programme of verification, which in our
opinion is reasonable, having regard to the size of the Com- pany and
nature of its assets. As informed to us, no material discrepancies were
noticed on such physi- cal verification.
c. The Company has not disposed off substantial part of fixed assets
during the year and the going con- cern status of the Company is not
affected.
2. In respect of its inventories:
a. As explained to us, inventories have been physi- cally verified by
the management at regular intervals during the year. The frequency of
verification is rea- sonable.
b. In our opinion and according to the information and explanations
given to us, the procedures of physi- cal verification of inventories
followed by the man- agement are reasonable and adequate in relation to
the size of the Company and the nature of its busi- ness.
c. The Company has maintained proper records of in- ventories. As
explained to us, there were no mate- rial discrepancies noticed on
physical verification of inventory as compared to the book records.
3. As informed to us, Company has not granted any loans, secured or
unsecured, to companies, firms or other parties covered in the register
maintained under Sec- tion 301 of the Companies Act, 1956. However, in
re- spect of unsecured loan taken from the companies covered in the
register maintained under Section 301 of the Companies Act, 1956, we
state that :
a. The Company has taken loan of Rs. 530.50 lacs during the year from
one Company. The balance outstanding including opening balance of
another Company as at 31 March 2009 was Rs. 1765.00 lacs.
b. In our opinion and according to the information and explanations
given to us, the rate of interest, wher- ever applicable and other
terms and conditions are not prima facie prejudicial to the interest of
the Com- pany.
c. There is no overdue amount in respect of loans taken by the Company.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business for the pur- chases of inventory, fixed assets and also for
the sale of goods and services. During the course of our audit, we have
neither come across nor have been informed of any continuing failure to
correct major weaknesses in internal control systems.
5. In respect of transactions covered under Section 301 of the
Companies Act, 1956:
a. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
agreements, that needed to be entered into the register maintained
under Sec- tion 301 of the Companies Act, 1956 have been so entered.
b. In our opinion and according to the information and explanations
given to us, transactions in pursuance of contracts or agreements,
entered in the register maintained under Section 301 of the Companies
Act, 1956 aggregating during the year to Rs. 5,00,000/- (Rupees Five
Lacs) or more in respect of any party in the said financial year are
reasonable having re- gard to the prevailing market prices at the
relevant time.
6. According to the information and explanations given to us, the
Company has not accepted any deposits from the public. Therefore the
provisions of clause (vi) of the Companies (Auditors Report) Order,
2003 are not ap- plicable to the Company.
7. In our opinion, the internal audit system of the Com- pany is
commensurate with its size and nature of its business.
8. As informed to us, maintenance of cost records as prescribed under
Section 209(1) (d) of the Companies Act, 1956 are stated to be under
preparation.
9. a. According to the records of the Company and based on information
and explanations made-avail- able to us, undisputed statutory dues
including Provi- dent Fund, Investor Education and Protection Fund (if
any), Employees State Insurance, Income-Tax, Sales- Tax, Commercial
Tax, Wealth Tax, Service Tax, Cus- toms Duty, Excise Duty, Cess and
other statutory dues have been generally regularly deposited with the
ap- propriate authorities (if any). According to the informa- tion and
explanations given to us, no undisputed amounts of nature mentioned
above payable in respect of the aforesaid dues were outstanding as at
31st March, 2009 for a period of more than six months from the date of
becoming payable.
b. The disputed statutory dues aggregating to Rs. 110.45 Lacs, that
have not been deposited on account of mat- ters pending before
appropriate authorities as under:. -
Sl. Name Nature of Amount
No. of the the Dues (Rs. In
Statute Lacs)
01. SalesTax Sales/ 20.13
statuteof Commercial
the State Tax
02 SalesTax Sales/ 38.27
statuteof Commercial
the State Tax
03. Central Central 30.13
SalesTax SalesTax
statute of
the Central
Govt
04. Central Excise Duty 21.92
Excise Act,
1944
Sl Period to Forum where
no which the dispute
amount is pending
relates
01 From Deputy
2002-2003to Commissioner
2003-2004 (Appeals), Raipur
and Revenue Board,
Gwalior
02 From Before High Court
1990-1991 to ofChhatBsgarh
1992-1993 State
03 2003-2004 Deputy
Commissioner
(Appeals), Raipur
04 1999-2000& High Court,
2005-2006 .Bilaspur
10. The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred cash losses during the
financial year cov- ered by the audit and in the immediately preceding
financial year.
11. In our opinion and according to the information and explanations
given to us, no loans and advances have been granted by the Company on
the basis of security by way of pledge of shares, debentures and other
securities.
12. In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, clause 4(xiii) of the Companies
(Auditors Report) Order 2003 (as amended) is not applicable to the
Company.
13. The Company has maintained proper records of the transactions and
contracts in respect of dealing or trading in shares, securities,
debentures and other investments and timely entries have been made
therein. All shares, securities, debentures and other investments have
been held by the Company in its own name.
14. As informed to us, the Company has given guaran- tees for loan
taken by a body corporate from banks or financial institutions. The
terms and conditions of guarantees aforesaid are not prima facie
prejudicial to the interest of the Company.
15. As informed to us, the Company has raised new term loans from bank
during the year. The term loan has been applied for the purposes for
which it was raised.
16. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that the Company has not utilized any money from short-term
sources towards repayment of long-term borrow- ings and acquisition of
fixed assets.
17. During the year, the Company has not made any pref- erential
allotment of shares to parties and Companies covered in the Register
maintained under Section 301 of the Companies Act, 1956.
18. As informed to us, the Company has not issued any debentures.
19. The company has not raised money by way of public issue during the
year.
20. In our opinion and according to the information and explanations
given to us, no fraud on or by the Com- pany has been noticed or
reported during the year, that causes the financial statements to be
materially misstated.
For, BATRA DEEPAK & ASSOCIATES
CHARTEREDACCOUNTANTS
PLACE: RAIPUR [DEEPAK BATRA]
DATE: JUNE 30, 2009 PARTNER
M.No.74052