Mar 31, 2023
MMTC Limited
Report on the Audit of the Standalone Financial Statements
Qualified Opinion
We have audited the accompanying financial statements of MMTC Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31,2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and notes to the financial statements including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âthe financial statementsâ), in which are incorporated the financial statements for the year ended on that date audited by the Branch Auditors of the Companyâs Regional and sub-regional Offices at Mumbai, Vizag, Chennai, Hyderabad and Bhubaneshwar(SRO).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2021, as amended, thereof (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2023, the profit and total comprehensive income(Comprising of net profit and total comprehensive income), changes in equity and its cash flows for the year ended on that date.
1. We draw attention to note no 40(f)(a) of the accompanying financial statement, which states that the liability @1.5% of profit before tax (âPBTâ) for the year in respect of scheme for retirees prior to 01.01.2007 (closed group) has not been recognised even though the Company has reported PBT of INR. 1279.16 crore (P.Y. 120.60 crore), on the basis of affordability. Also, the Company has not provided form PRMBS (open group) @ 4.5% of Basic and DA for serving employees. During the previous year provision in respect of retirees after 01.01.2007 pertaining to FY 2019-20 and 2020-21 had been withdrawn due to loss during these previous years. The management will review the above in the next financial year. The non-recognition of provision according to the schemes above constitutes a departure from the accounting standards as prescribed under section 133 of the Act. An amount of INR. 19.18 crore (P.Y. 1.81 crore) (1.5% of PBT) and INR. 1.63 crore (P.Y. 3.29 crore) (4.5% of Basic and DA) estimated by the management, should have been provided as per the accounting standards. Accordingly, the provision for PRMBS would have been increased by INR. 20.81 crore (P.Y. 5.10 crore) and net income and shareholdersâ fund would have been reduced by the given amount.
We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditorâs Responsibilities for the Audit of the financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIâs Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditorâs responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.
Sl. No |
Key Audit Matter |
Auditorâs Response |
1. |
Refer note no. 34 on the claims not acknowledged as debt incorporating therein claims on account of pending legal cases. There are large numbers of cases pending before various adjudicating authorities. These legal cases involve significant judgement to determine the possible outcome of those disputes and independent legal assessment to pursue the case. The company has 5 regional offices, 1 sub-regional office and different divisions to handle the trade activities including accounting of that particular activity. However, in lot of cases the legal cases are pursued at corporate office level while related financial information / transactions are dealt at RO level, thereby difficulties are faced in giving a comprehensive and holistic treatment to the transaction. |
We obtained list of all the pending legal cases handled at Corporate office legal division on 31st March 2023 with a note from management on the changes in the status of the cases from that of last year. We considered the effect of information provided by the management and analysed the impact of financial obligation of the Company. It was suggested to management to have legal cases and financial obligation if any at the same location in order to have clarity in reporting in financial statement. |
2. |
Assessment of impairment of investment in subsidiary and joint ventures (Refer note no. 6) The company as at 31st March,2023 has non-current and current investments. |
Our audit procedures include but we are not limited to the following: Obtained and understanding of the management process. Discussed extensively with management regarding impairment indicators and evaluated the design and testing operating effectiveness of controls. Assessed the methodology used by the management to estimate the recoverability of investment and ensured that it is consistent with applicable accounting standards. |
Restructuring and default in loan repayment
We draw attention to Note No. 29 of the accompanying financial Statements, which states that Consequent upon receipts of divestment proceeds from NINL on 4.7.2022 an amount of INR. 2551.44 crore as on 31.3.2022 have been paid towards principal and normal agreed interest upto 31.3.2022. An amount of Rs. 106.41 crore out of which Rs. 63.68 crore pertains to interest from 01.04.2022 to 31.03.2023 & remaining amount of Rs. 42.73 crore relates to additional interest and other charges under RTR subject to final settlement with banks. The matter is now closed with State Bank of India and Punjab & Sind Bank. Other lender banks are also taking up their matter with appropriate authorities. The management is of the view that the remaining banks shall take into consideration the concession if any and no addition provision is required to be made.
Our opinion is not modified in respect of the above matter.
We draw attention to Note No. 34 (vii) to the accompanying financial statements, which states that the Company has created a contingent liability of INR 0.07 crore (P.Y. 0.07 crore) on account of demand raised by Stock Exchange Board of India (SEBI) in relation to non-compliance of regulation 33 of SEBI. The management is in the process of having these demands waived and thus no provision has been made in the financial statements.
Our opinion is not modified in respect of the above matter.
We draw attention to Note No. 34 (vii) to the accompanying financial statements, which states that an amount of INR.
0.01 crore is included for non-compliance of appointment of Independent Director within the stipulated time. The management is in the process of receiving an approval from the concerned ministry, thus no provision has been made in the financial statements
Our opinion is not modified in respect of the above matter.
We draw attention to Note No. 36 (n) to the accompanying financial statements, which states that an amount of INR. 0.10 crore on account of foreign debtors outstanding for more than twenty years was written off with the approval of the Board of directors of the Company during the year and the provisions created earlier for bad and Doubtful Debts/Claims/Loans were withdrawn. The management of the Company is under the process of taking an opinion on the FEMA guidelines through an expert and action (if any) will be taken accordingly.
Our opinion is not modified in respect of the above matter.
1. We did not audit the financial statements/ financial information of 5 Regional Offices included in the standalone financial statements of the Company whose financial statements/financial information reflect total assets of INR. 375.47 crores as at March 31,2023 and total revenue of INR. 230.62 crores for the year ended on that date, as considered in the standalone financial statements. The financial statements/financial information of these branches have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors.
2. The sub - regional office of Bhubaneshwar has provided a qualified opinion and has reported that the SRO has recognised income INR. 0.25 crore which arose due to forfeiture of eMd as the party failed to comply with terms and conditions of the tender. All the activities starting from floating of the tender, execution of the contract and the decision to cancel the lots allotted to the parties for failure to deposit the payment and forfeit the EMD pertain to FY 2021-22.
As the forfeiture pertains to FY 2021-22, such income is a prior period item in the Financial statement for FY 2022-23 which should have been disclosed as per the requirements of IND AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors. Such omission has decreased the loss of FY 2022-23 by INR. 0.25 crore and reduced the EMD amount under Other Financial liabilities in FY 2022-23. As per the requirements of INDAS 8 the said Miscellaneous Income of INR. 0.25 Crore., should have been corrected in the Financial statements retrospectively and accordingly Financial statements for FY 2022-23 and the comparative amount of the prior period should have been restated.
The accounting standard requires retrospective adjustment only if the amount is material. An amount of INR. 0.25 crore is material at the SRO level but in the standalone financial statements the given amount is not material and thus has been adjusted through Prior period errors provided in Note No. 48 of the accompanying financial statements.
Our opinion is not modified in respect of this matter.
3. The regional of Mumbai under Emphasis of matter para has reported that there is a dispute pertaining to Sada Lease Land, Goa due to which there is a retrospective change in the lease rentals from year 2005 to 2022. The change in the lease rentals has been debited to Profit & Loss Account in the following manner:
Lease Rent of earlier years - 274.83 lakhs
Interest on lease - 46.91 lakhs
Depreciation on ROU Assets - 0.85 lakhs
Further the lease rentals for the block of 2021-25 has not been revised. Last revision was made in the block of 2015-20. Subsequent to this period, revision has been pending as on date and the RO has recognized expenses based on the 2015-20 revision.
Our opinion is not modified in respect of this matter.
Management''s Responsibilities for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. 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.
In preparing the financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, based on our audit 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 of the aforesaid financial statements.
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, the aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act, read with the companies (Indian accounting Standards) Rules, 2015 as amended;
e) Being a Government Company pursuant to the Notification No. GSR 463(E) dated 5 June 2015 issued by the Ministry of Corporate Affairs, Government of India, provisions of sub-section (2) of Section 164 of the Act, are not applicable to the Company;
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) As per Notification number G.S.R. 463 (E)dated 5th June, 2015 issued by Ministry of Corporate Affairs, section 197 of the Act regarding remuneration to director is not applicable to the Company, since it is a Government Company.
h) 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, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. There are pending litigation including matters relating to sales tax, custom duty and excise duty which are disclosed as contingent liability - refer to Note 34 and 36 to the standalone financial statements, the impact of the same is unascertainable as the matters are sub-judice.
ii. The Company is not having any long-term contracts including derivative contracts for which there were any material foreseeable losses; and
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31 March 2023;
iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds
(which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer note 50 (e)).
(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer note 50(f))
(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
v. The Company has not declared or paid any dividend during the year ended 31 March 2023.
vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31,2023.
3. As required by CAG of India through directions, issued under Section143(5) of the Act, 2013 we give our report in the attached âAnnexure Câ.
Place: New Delhi Chartered Accountants
Date: 30.05.2023 FRN: 002312N
UDIN: 23095584BGWCXK3321
Partner
M.No.095584
Mar 31, 2022
Report on the Audit of the Standalone Financial Statements Qualified Opinion
We have audited the accompanying financial statements of MMTC Limited (âthe Company"), which comprise the Balance Sheet as at March 31,2022, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and notes to the financial statements including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âthe financial statementsâ), in which are incorporated the financial statements for the year ended on that date audited by the Branch Auditors of the Companyâs Regional and sub-regional Offices at Mumbai, Vizag, Chennai, Hyderabad and Bhubaneshwar(SRO).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules,2021, as amended, thereof (âInd ASâ) and other accounting principle generally accepted in India, of the state of affairs of the Company as at March 31,2022, the losses and total comprehensive income(Comprising of net loss and total comprehensive loss), changes in equity and its cash flows for the year ended on that date.
Basis for Qualified Opinion
1. We draw attention to note no 17 of the accompanying financial statement, which states that the quarterly returns or statements of current assets are filed by the company with banks on the basis of provisional monthly information statement prepared for internal purposes. As per Notification of Ministry of Corporate affairs (âMCAâ) dated 24 March 2021, in regards with amendments to schedule III of division II the Company is required to disclose the quarterly reconciliation of statements in agreement with the books. As informed by the management given the volume and nature of business the reconciliation of these statements could not be performed and material discrepancy if any could not be determined. Thus, the required disclosure has not been presented in the financial statement.
2. We draw attention to note no 36(k) of the accompanying financial statement, which states that there are several provisions for doubtful recoverable amounting to INR1.13 crore, the recoverability assessment of these balances could not be performed due to non-availability of sufficient information. The company has initiated an internal note to prepare a guideline to assess the recoverability of such balances. As per the management these provisions made relates to balances outstanding for a significant period of time and no sufficient evidence is available for recovery of these accounts, but due to non-availability of any internal guidelines these provisions have not been written off. Accordingly, the provisions and respective recoverable balances would have been reduced by INR. 1.13 crore.
3. We draw attention to note no 40(f)(a) of the accompanying financial statement, which states that the liability @1.5% of profit before tax (âPBTâ) for the year in respect of scheme for retirees prior to 01.01.2007 (closed group) has not been recognised even though the Company has reported PBT of INR. 120.60crore, on the basis of affordability. Also, the Company has not provided form PRMBS (open group) @ 4.5% of Basic and DA for serving employees. During the year provision in respect of retirees after 01.01.2007 pertaining to FY 2019-20 and 2020-21 has been withdrawn due to loss during these previous years. The management will review the above in the next financial year. The non-recognition of provision according to the schemes above constitutes a departure from the accounting standards as prescribed under section 133 of the Act. An amount of INR. 1.81 crore (1.5% of PBT) and INR. 3.29 crore (4.5% of Basic and DA) estimated by the management, should have been provided as per the accounting standards. Accordingly, the provision for PRMBS would have been increased by INR. 5.10crore and net income and shareholdersâfund would have been reduced by the given amount.
We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditorâs Responsibilities for the Audit of the financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIâs Code of Ethics.
We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditorâs responsibilities for the audit of the standalone Ind AS
financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.
Sr. No. |
Key Audit Matter |
Auditorâs Response |
1. |
Refer note no. 34 on the claims not acknowledged as debt incorporating therein claims on account of pending legal cases. There are large numbers of cases pending before various adjudicating authorities. These legal cases involve significant judgement to determine the possible outcome of those disputes and independent legal assessment to pursue the case. The company has 5 regional offices, 1 subregional office and different divisions to handle the trade activities including accounting of that particular activity. However, in lot of cases, the legal cases are pursued at corporate office level while related financial information/transactions are dealt at RO level, thereby difficulties are faced in giving a comprehensive and holistic treatment to the transaction. |
We obtained list of all the pending legal cases handled at Corporate office legal division on 31 st March 2022 with a note from management on the changes in the status of the cases from that of last year. We considered the effect of information provided by the management and analysed the impact of financial obligation of the Company. It was suggested to management to have legal cases and financial obligation if any at the same location in order to have clarity in reporting in financial statement. |
2. |
Refer note no. 11 include advance to related parties wherein interest income on loan/advance given to NINL been recognized as an income during the year. |
In view of the significance of the matter, we applied following audit procedures in this area, among others to obtain sufficient appropriate evidence. We discussed the matter with the management to understand the possibility of recovery of interest Considered the appropriateness of Company''s revenue recognition policy and its compliance in terms of IND AS 115 Revenue recognition. Assessed the relevant disclosures made in the financial statements. |
3. |
Assessment of impairment of investment in subsidiary and joint ventures (Refer note no. 6) The company as at 31st March 2022 has non-current and current investments. |
Our audit procedures include but we are not limited to the following: Obtained and understanding of the management process. Discussed extensively with management regarding impairment indicators and evaluated the design and testing operating effectiveness of controls. Assessed the methodology used by the management to estimate the recoverability of investment and ensured that it is consistent with applicable accounting standards. |
4. |
Refer Note No 32 (ii) on provision on Anglo Coal |
In view of the significance of the matter, we applied following audit procedures: Obtained and understanding of relevant documents in relation to the matters of anglocoal. Discussed with management regarding the possible impact and shown in the financial statement. |
Restructuring and default in loan repayment
We draw attention to Note No. 17of the accompanying financial Statements, which states that the Company had requested all lender banks for restructuring of loan in terms of RBI Circular no. RBI/2020-21/16 DOR No.BP/BC/3/21.04.048/2020-21 dated 06.08.2020 for resolution of Covid-19 related stress, the loan was further restructured as on 08.06.2021 wherein the due date of loan and interest repayment was 30.03.2022 with a review period of 30 days. Total outstanding bank loan and interest was to be paid in one go on or before 29.04.2022 (30 days review period after 30.03.2022), mainly out of NINL divestment. As bank loan along with interest could not be repaid on due date/ review period due to non-receipt of disinvestment proceeds of NINL, MMTC account with all lender banks has been downgraded to Sub-standard/ NPA w.e.f. 08.06.2021 ie. the date of loan restructuring. Penal provisions were applicable as per loan restructuring agreements and other legislations and penal/card rate of interest was to be charged on default amount. Consequent upon receipts of divestment proceeds from NINL on 4.7.2022 an amount of INR. 2551.44 crore as on 31.3.2022 have been paid towards principal and normal agreed interest upto 31.3.2022. Further as on 6.7.2022 statement have been obtained and lenders have provided statement with only penal interest form 1.4.2022 till date of payment of complete loan balances. The Company has taken up with the lenders, during Joint lenders meet âJLMâ held on 07.07.2022 to waive off all the penal and other charges including penal/card rate charges prior to 01.04.2022 if any.
Our opinion is not modified in respect of the above matter.
Non-compliance of regulation 33 of SEBI
We draw attention to Note No. 34 (vii)to the accompanying financial statements, which states that the Company has created a contingent liability of INR 0.07 crore on account of demand raised by Stock Exchange Board of India (SEBI) in relation to non-compliance of regulation 33 of SEBI. The management is in the process of having these demands waived and thus no provision has been made in the financial statements Our opinion is not modified in respect of the above matter.
Other Matters
1. We did not audit the financial statements/ financial information of 5 Regional Offices included in the standalone financial statements of the Company whose financial statements/financial information reflect total assets of INR. 3895.08 crore as at March 31,2022 and total revenue of INR.6598.16 crore for the year ended on that date, as considered in the standalone financial statements. The financial statements/financial information of these branches have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors.
2. The regional ofFice of Hyderabad has reported that the company has obtained substantial balance confirmations towards advances from various customers outstanding as at the balance sheet date classified under other liabilities, other than the very old balances of Rs 4.45 crore for which a write back proposal has been sent to head ofFice during the year under audit.
Ouropinion is not modified in respect of this matter.
Managementâs Responsibilitiesforthe Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. 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.
In preparing the financial statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, orthe override of internal control.
⢠Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(l) of the Act, we are also responsible for expressing our opinion on whether the Company has an adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
⢠Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ) issued by the Central Government in
terms of Section 143(11) of the Act, we give in âAnnexure Aâ a statement on the matters specified in paragraphs 3
and 4 of the Order.
2. As required by Section 143(3) ofthe Act, based on ouraudit 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 forthe purposes of ouraudit of the aforesaid financial statements.
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, the aforesaid financial statements comply with the Ind AS specified under Section 133 ofthe Act, read with the companies (Indian accounting Standards) Rules, 2015 as amended;
e) Being a Government Company pursuant to the Notification No. GSR 463(E) dated 5 June 2015 issued by the Ministry of Corporate Affairs, Government of India, provisions of sub-section (2) of Section 164 of the Act, are not applicable to the Company;
f) With respect to the adequacy ofthe internal financial controls over financial reporting ofthe Company and the operating effectiveness of such controls, referto ourseparate Report in âAnnexure Bâ.
g) As per Notification number G.S.R. 463 (E)dated 5th June, 2015 issued by Ministry of Corporate Affairs, section 197 of the Act regarding remuneration to director is not applicable to the Company, since it is a Government Company.
h) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. There are pending litigation including matters relating to sales tax, custom duty and excise duty which are disclosed as contingent liability - refer to Note 34 and 36 to the standalone financial statements, the impact ofthe same is unascertainable as the matters are sub-judice.
ii. The Company is not having any long-term contracts including derivative contracts for which there were any material foreseeable losses; and
iii. The Company has not transferred INR. 127 to the Investor education and protection fund.
iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are
material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer note 48 (e)).
(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer note 48(f))
(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
v. The Company has not declared or paid any dividend during the year ended 31 March 2022.
3. As required by CAG of India through directions, issued under Section143 (5) of the Act, 2013 we give our report in the attached âAnnexure Câ.
For M. L. Puri & Co.
Chartered Accountants F.R. No.: 00002312N
Place: New Delhi (CA. R C Gupta)
Date: 08.07.2022 Partner
UDIN:22095584AMPTHP6700 M. No. 095584
Mar 31, 2021
Report on the Audit of the Financial Statements Opinion
We have audited the accompanying financial statements of MMTC Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2021, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and notes to the financial statements including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the financial statements"), in which are incorporated the financial statements for the year ended on that date audited by the Branch Auditors of the Company''s Regional Offices at Mumbai, Vizag, Chennai, Hyderabad and Bhubaneshwar.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules,2015,as amended, thereof ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2021, the losses and total comprehensive income(Comprising of net loss and total comprehensive loss), changes in equity and its cash flows for the year ended on that date.
We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics.
We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
1. We draw attention to Note No. 34(vi) to the Standalone Ind-AS financial statements in respect of pre-award interest payable to Anglo Coal amounting to Rs 128.89 crores for the period 1.10.2009 to 24.09.2012. The Company is of the opinion that pre-arbitration interest is not payable to Anglo Coal for the mentioned duration and only pendente lite and future interest will be payable at 6% simple interest as per Supreme Court order dated 29.07.2021.
MMTC is holding total exposure of Rs 3987.58 crores (including equity investment) with Neelachal Ispat Nigam Limited (NINL). Cabinet Committee on Economic Affairs (CCEA) has accorded ''in principle'' approval for strategic divestment of equity investment held by MMTC and other Central/ State Public Sector Undertakings (PSUs) on 8th January 2020 and subsequent various meetings on divestment by DIPAM. Management has considered that no impairment of investment and advance to NINL is required as full outstanding amount due from NINL will be realized from the divestment proceeds. (Also refer Note No. 36(c) to the standalone Ind-AS financial statements).
2. We draw attention to Note No. 10 of the Standalone Ind-AS financial Statements, the Company has made deferred tax assets amounting to Rs 330.69 crores on losses limited to the probable interest proceeds (from financial year 2019-20, 2020-21 & 2021-22) to be realized through divestment proceeds of NINL.
3. We draw attention to Note No. 17 to the Standalone Ind-AS financial statements in respect of restructuring of loans where it has been agreed with the lender banks that outstanding amount of loan and interest will be repaid by 31.03.2022 through the divestment proceeds of NINL.
4. We draw attention to the Note No. 49 of the statements which describes the impact of covid-19, a global pandemic, on the operations and financial matters of the company.
Our opinion is not modified in respect of these matters.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.
Sl. No |
Key Audit Matter |
Auditor''s Response |
1. |
Refer note no. 34 on the claims not acknowledged as debt incorporating therein claims on account of pending legal cases. There are large numbers of cases pending before various adjudicating authorities. These legal cases involve significant judgement to determine the possible outcome of those disputes and independent legal assessment to pursue the case. The company has 5 regional offices and different divisions to handle the trade activities including accounting of that particular activity. However, in lot of cases the legal cases are pursued at corporate office level while related financial information / transactions are dealt at RO level, thereby difficulties are faced in giving a comprehensive and holistic treatment to the transaction. |
We obtained list of all the pending legal cases handled at Corporate office legal division on 31st March 2021 with a note from management on the changes in the status of the cases from that of last year. We considered the effect of information provided by the management and analysed the impact of financial obligation of the Company. It was suggested to management to have legal cases and financial obligation if any at the same location in order to have clarity in reporting in financial statement. |
2. |
Refer note no. 11 include advance to related parties wherein interest income on loan/advance given to NINL has not been recognized as an income during the year. |
In view of the significance of the matter, we applied following audit procedures in this area, among others to obtain sufficient appropriate evidence. We discussed the matter with the management to understand the possibility of recovery of interest Considered the appropriateness of Company''s revenue recognition policy and its compliance in terms of IND AS 115 Revenue recognition. Assessed the relevant disclosures made in the financial statements. |
3. |
Assessment of impairment of investment in subsidiary and joint ventures (Refer note no. 6) The company as at 31st March,2021 has non-current and current investments. |
Our audit procedures include but we are not limited to the following: Obtained and understanding of the management process. |
Discussed extensively with management regarding impairment indicators and evaluated the design and testing operating effectiveness of controls. Assessed the methodology used by the management to estimate the recoverability of investment and ensured that it is consistent with applicable accounting standards. |
||
4. |
Refer Note No 32 (ii) on provision on Anglo Coal |
In view of the significance of the matter, we applied following audit procedures: Obtained and understanding of relevant documents in relation to the matters of anglo coal. Discussed with management regarding the possible impact and shown in the financial statement. |
Management''s Responsibilities for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. 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.
In preparing the financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
We did not audit the financial statements/ financial information of 5 Regional Offices included in the standalone financial statements of the Company whose financial statements/financial information reflect total assets of Rs 4267.69 crores as at March 31, 2021 and total revenue of Rs 1671.31crores for the year ended on that date, as considered in the standalone financial statements. The financial statements/financial information of these branches have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors.
Our opinion is not modified in respect of this matter.
Rep ort on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, based on our audit 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 of the aforesaid financial statements.
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, the aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act, read with the companies (Indian accounting Standards) Rules, 2015 as amended;
e) Being a Government Company pursuant to the Notification No. GSR 463(E) dated 5 June 2015 issued by the Ministry of Corporate Affairs, Government of India, provisions of sub-section (2) of Section 164 of the Act, are not applicable to the Company;
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 "Annexure B".
g) As per Notification number G.S.R. 463 (E)dated 5th June, 2015 issued by Ministry of Corporate Affairs, section 197 of the Act regarding remuneration to director is not applicable to the Company, since it is a Government Company.
h) 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, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. There are pending litigation including matters relating to sales tax, custom duty and excise duty which are disclosed as contingent liability - refer to Note 34 and 36 to the standalone financial statements, the impact of the same is unascertainable as the matters are sub-judice.
ii. The Company is not having any long-term contracts including derivative contracts for which there were any material foreseeable losses; and
iii. The Company has not transferred Rs 0.66 lakhs to the Investor education and protection fund.
3. As required by CAG of India through directions, issued under Section143(5) of the Act, 2013 we give our report in the attached "Annexure C".
Chartered Accountants FRN:002312N
Place: New Delhi CA R.C. Gupta
Date: 27.10.2021 Partner
UDIN: 21095584AAAALG7320 M.No.095584
Mar 31, 2018
INDEPENDENT AUDITORS'' REPORT
TO THE MEMBERS OF MMTC LTD. Report on the Standalone Ind AS Financial Statements
We have audited the accompanying Standalone Ind AS financial statements of MMTC Limited ("the Company"), which comprises the Balance Sheet as at 31st March, 2018, the statement of Profit and Loss (including other comprehensive income), the Statement of Cash Flows and Statement of Changes in Equity for the year then ended and a summary of significant accounting policies and other explanatory information, in which are incorporated the financial statements for the year ended on that date audited by the Branch Auditors of the Company''s Regional Offices at Mumbai, Kolkata, Ahmedabad, Vizag, Chennai, Hyderabad, Bhubaneshwar and Jaipur.
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 ("the Act") 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 (financial performance including 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 specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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.
Auditors'' 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 Statement in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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 auditors'' 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.
Opinion
In our opinion and to the best of our information and according to the explanation provided to us, 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 Ind AS, of the state of affairs ( financial position ) of the Company as at 31stMarch, 2018, its profit (financial performance including other comprehensive income), its cash flows and the changes in the equity for the year ended on that date
Emphasis of Matters
a. We draw attention to Note No.34 (ix) to the standalone Ind AS financial statements in respect of non-provision of liability, if any arises, in case of non- extension of time/waiver/write off of GR-1 forms.
b. We draw attention to Note No. 34 (v), (vi), and 36 (c ) to the Standalone Ind AS financial Statements in respect of fund based and non-fund based exposure of the Company in M/s Neelachal Ispat Nigam Limited (NINL)-a joint venture Company.
Our opinion is not modified in respect of these matters.
Other Matter
We did not audit the Ind AS financial statements/ financial information of 8 Regional Offices included in the standalone financial statements of the Company whose Ind AS financial statements/financial information reflect total assets of INR 3,994.44 Cr. as at March 31, 2018 and total revenue of INR 12,856.26 Cr. for the year ended on that date, as considered in the standalone Ind AS financial statements. The Ind AS financial statements/financial information of these branches have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1 . As required by the Companies (Auditor''s Report) Order, 201 6 ("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-1" 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 reports on the accounts of the branch offices of the Company audited under section 143 (8) of the Act by the Branch auditors have been sent to us and have been properly dealt with by us in preparing the report;
d) 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;
e) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act read with the Companies ( Indian Accounting Standards) Rules, 2015 as amended;
f) Being a Government Company pursuant to the Notification No. GSR 463( E) dated 5 June 2015 issued by the Ministry of Corporate Affairs, Government of India, provisions of sub-section (2) of Section 164 of the Act, are not applicable to the Company;
g) With respect to the adequacy of internal financial controls over financial reporting of the company and operating effectiveness of such controls, refer to our separate Report in "Annexure-2"
h) 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. There are pending litigations including matters relating to sales tax, custom duty and excise duty which are disclosed as contingent liability - refer to Note 34 and 36 to the standalone Ind AS financial statements, the impact of the same is unascertainable as the matters are sub-judice.
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.
iii. There has been no delay in transferring amounts required to be transferred to the Investors Education and Protection Fund by the Company.
3. As required by C & AG of India through directions, issued under Section 143 (5) of the Act, 2013, we give our report in the attached "Annexure-3"
Annexure-1 To the Independent Auditors'' Report on the Standalone Ind AS Financial Statements of MMTC LTD.
(Referred to in Paragraph 1 under the "Report on Other Legal and Regulatory Requirement")
We further report that:
1. In Respect of Its Fixed Assets
i. The Company has maintained proper records in respect of its fixed assets showing full particulars including quantitative details and situation of fixed assets.
ii. Based on the physical verification reports produced before us, in our opinion, the said assets have been physically verified by the management at reasonable intervals.
iii. Title Deeds of immovable property are held in the name of the company except in the case mentioned below:
Region/Office |
Asset Description |
Gross Value |
Area |
Remarks |
Corporate Office |
Land for Residential Colony at New Delhi |
13.16 Lakhs |
32.33 Acres |
Lease Agreement is in Joint Name of MMTC and State Trading Corporation |
Bhubaneshwar Office |
Residential Building, Roads, Culverts and Electrical Installations |
47.57 Lakhs |
2 Acres |
Lease Deed Expired in 201 1 . Paradeep Port recommended for renewal of lease for 15 years and Government has approved the renewal upto 2025. Execution of lease deed is under process. |
2. In Respect of Its Inventory
i. As explained to us, the inventories have been physically verified during the year by the Management.
ii. I n our opinion and according to the information and explanation given to us, no material discrepancies were noticed during the course of physical verification.
iii. In our opinion and according to the information and explanation given to us, the procedure of physical verification of inventories followed by the management needs to be further strengthened in relation to the size of the MMTC Limited and the nature of its business.
3. Loans given to parties covered under section 189
The company has granted unsecured loan to one of its joint venture company, M/s Neelachal Ispat Nigam Limited.
i. I n our opinion and according to the information and explanation given to us, terms and conditions on which loan has been granted is not pre-judicial to the interest of the company.
ii. According to the information and explanation given to us, payment terms of loan and interest were revised by the Board by granting extension and enhancing credit facility for which a fresh agreement is yet to be entered.
iii. According to the information and explanation given to us and in consequence to extension of credit facility extended for which agreement is yet to be entered, we are unable to comment upon the amount overdue, if any, as on balance sheet date.
4. Compliance of Provision of Section 185 and 186 of the Companies Act, 2013 in respect of loans, guarantees and securities
According to the information and explanations given to us, and as per the records verified by us, the company has not granted any loan or given any guarantee and provided any security covered under Section 185 of the Act. During the year, the Board of Directors of the Company has sanctioned extension of credit facility up to a limit of Rs, 630.00 Crores(Outstanding Rs, 361.70 Cr. as on 31st March 2018) to one of its joint Venture- M/s Neelachal Ispat Nigam Ltd, without taking consent of all the directors present at the board meeting which is required for compliance of section 186of the Act, though, in management''s view, the said advance is related to trade activities in the ordinary course of business which is outside the purview of Sec. 186.
5. Acceptance of Deposits
According to the information and explanations given to us, the company has not accepted deposits as per the directive issued by the Reserve Bank of India and the provision of Section 73 to 76 of the Act or any other relevant provision of the Act and the rules framed there under.
6. Maintenance of Cost Records
As explained to us, maintenance of cost records has not been prescribed by the Central Government for the company under Section 148(1) of the Act.
7. Undisputed & Disputed Statutory Dues
(a) According to the information and explanations given to us and as per the records verified by us, the Company has been regular in depositing undisputed statutory dues including Income Tax, Provident Fund dues, Professional Tax, Value Added Tax and Service Tax with the appropriate authorities.
(b) There were no undisputed amount payable in respect of Income Tax, Provident Fund dues, Professional Tax, Value Added Tax and Service Tax and other statutory dues in arrear as at 31st March 2018 for more than six months from the date they became payable.
(c) I n case of dues of Income Tax or sales tax or service tax or duty of custom or duty of excise or value added tax or cess which have not been deposited on account of any dispute are attached as Annexure A.
8. Loans from Banks/Financial Institutions/Government/Debentures
According to the information and explanations given to us and as per the records verified by us, the Company has not defaulted in repayment of loans or borrowings to a financial institution, bank, Government or dues to debenture holders.
9. Proceeds of Public Issue(including debt instruments)/Term Loans
According to the information and explanations given to us and as per the records verified by us, the Company has not raised any money during the year through initial/further public offer (including debt instruments). Term loans raised by the company during the year have been utilized for the purpose for which they were obtained.
10. Frauds on or by the Company
According to the information and explanations given to us and based on the audit procedures performed in accordance with the generally accepted auditing practices in India, we report that no fraud by the company or on the Company by its officers or employees has been noticed or reported during the year.
11. Managerial Remuneration
As per notification No. GSR 463(E) dated 5 June 2015 issued by the Ministry of Corporate Affairs, Government of India, Section 197 of Companies Act, 2013 is not applicable to the Company. Accordingly, paragraph 3(xi) of the Order is not applicable to the Company.
12. Nidhi Companies
I n our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, the provisions of paragraph 3(xii) of the Order are not applicable to the Company.
13. Related Party Transactions
According to the information and explanations given during the course of our verification, in our opinion, all transactions with the related parties made by the company are in compliance with section 177 and 188 of the Act, where applicable and the relevant details in respect of such transactions have been appropriately disclosed in the Ind AS standaloneFinancial Statements under Ind As-24 - "Related Party Disclosures" specified under Section 133 of the Act read with relevant rules.
14. Preferential Issue
According to the information and explanations given to us and based on our examination of records, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, the provisions of paragraph 3(xiv) of the Order are not applicable to the Company.
15. Non-Cash Transactions with Directors etc.
According to the information and explanations given to us and based on our examination of records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with the directors as referred to in section 192 of Companies Act, 2013. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.
16. Provision of 45-IA of the Reserve Bank of India Act,1934
According to the information and explanations given to us, 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 to the Company.
Annexure "A" to Clause 7 (iii) of Annexure 1 to Independent Auditors'' Report on the Standalone Ind AS Financial Statements of MMTC Limited Mumbai Region
Nature of Statute |
Nature of Dues |
Year |
Amount |
Authority |
Bombay Sales Tax Act |
Sales Tax |
1989-90 |
14,96,06,778 |
Jt. Comm. Of Sale tax (Appeal IV) |
Bombay Sales Tax Act |
Sales Tax |
1990-91 |
23,30,46,478 |
Jt. Comm. Of Sale tax (Appeal IV) |
Bombay Sales Tax Act |
Sales Tax |
1991-92 |
28,98,738 |
Jt. Comm. Of Sale tax (Appeal IV) |
Bombay Sales Tax Act |
Sales Tax |
2001-02 |
45,03,961 |
Jt. Comm. Of Sale tax (Appeal I) |
Maharashtra VAT, 2002 |
Sales Tax |
2008-09 |
26,04,822 |
Jt. Comm. Of Sale tax (Appeal VIII) |
Maharashtra VAT, 2002 |
Sales Tax |
2008-09 |
1,42,13,373 |
Jt. Comm. Of Sale tax (Appeal V) |
Maharashtra VAT, 2002 |
Sales Tax |
2007-08 |
23,99,218 |
Jt. Comm. Of Sale tax (Appeal VIII) |
Maharashtra VAT, 2002 |
Sales Tax |
2010-11 |
45,82,018 |
Jt. Comm. Of Sale tax (Appeal VIII) |
Maharashtra VAT, 2002 |
Sales Tax |
2010-11 |
1,22,470 |
Jt. Comm. Of Sale tax (Appeal VIII) |
Maharashtra VAT, 2002 |
Sales Tax |
2009-10 |
19,58,379 |
Jt. Comm. Of Sale tax (Appeal VIII) |
Maharashtra VAT, 2002 |
Sales Tax |
2011-12 |
0* |
Jt. Comm. Of Sale tax (Appeal VI) |
Maharashtra VAT, 2002 |
Sales Tax |
2013-14 |
13,29,839 |
RO of Mumbai is in process of filing appeal with concerned authorities |
Central Sale Tax,1956 |
Sales Tax |
2011-12 |
47,25,144 |
Jt. Comm. Of Sale tax (Appeal VI) |
Central Sale Tax,1956 |
Sales Tax |
2008-09 |
51,81,978 |
Maharashtra Sales Tax Tribunal |
Central Sale Tax,1956 |
Sales Tax |
2007-08 |
71,97,308 |
Maharashtra Sales Tax Tribunal |
Custom Act,1962 |
Custom Act |
2012-13 |
34,92,29,6711 |
Commissioner of Customs |
Both Appeals are filed with same appellate authority for common issue.
Nature of Statute |
Nature of Dues |
Year |
Amount |
Authority |
TNGST Act |
Sales Tax Penalty & Interest |
1998-99 |
8,63,114 (SPANDEX YARN) |
Madras High Court |
TNGST Act |
Sales Tax Penalty & Interest |
2000-01 |
4,43,416 (SPANDEX YARN) |
Sales Tax Appeals Tribunal |
TNGST Act |
Sales Tax Penalty & Interest |
1999-00 |
11,52,785 (DUN PEAS) |
Madras High Court |
TNGST Act |
Sales Tax Penalty & Interest |
2001-02 |
1,78,566 (SPANDEX YARN) |
Assistant Commissioner of Commercial Taxes |
TN VAT Act |
VAT& Penalty |
2008-09 |
3,55,08,765 (DUN PEAS) |
Jt. Commissioner of Commercial Taxes Appeals |
Delhi Region
Name of Statute |
Nature of Dues |
AmountinRs,) |
Period to which the amount relates |
Forum where dispute is pending |
Delhi VAT |
CST/LST/Interest/ Penalty (Gold-Commemorative medallions) |
37,45,290.00 |
2002-03 |
Commissioner (Appeals), DVAT |
Delhi VAT |
LST |
11,65,303.00 |
1984-85 |
Dy. Commissioner(Appeals) |
Delhi VAT |
LST/CST |
6,56,13,467.00 |
1986-87 |
Add. Commissioner (Appeals) |
Delhi VAT |
LST/CST |
4,31,86,549.00 |
1987-88 |
Add. Commissioner (Appeals) |
Delhi VAT |
LST/CST |
3,77,96,673.00 |
1988-89 |
Add. Commissioner (Appeals) |
Delhi VAT |
LST |
61,87,340.00 |
1989-90 |
Add. Commissioner (Appeals) |
Delhi VAT |
LST |
22,23,198.00 |
1990-91 |
Add. Commissioner Appeals) |
UP-VAT |
LST/CST |
6,17,588.00 |
1990-91 |
Moradabad, Allahabad High Court |
UP-VAT |
LST |
4,70,578.00 |
1991-92 |
Moradabad, Allahabad High Court |
UP-VAT |
LST |
2,64,037.00 |
1992-93 |
Moradabad, Allahabad High Court |
UP-VAT |
LST |
1,85,100.00 |
1993-94 |
Moradabad, Allahabad High Court |
UP-VAT |
LST |
16,35,160.00 |
1987-88 |
Joint Commissioner (Appeals), Kanpur |
UP-VAT |
VAT |
6,11,808.00 |
1996-97 |
Commissioner (Appeals), UP-VAT |
UP-VAT |
VAT Interest for non-submission of Form-3B (Gold)& Non-submission of Form 3C1(Mentha Oil) |
62,457.00 |
2007-08 |
Commissioner (Appeals), UP-VAT |
Haryana VAT |
LST |
4,24,587.00 |
1992-93 |
Faridabad, Punjab & Haryana High Court, Chandigarh |
MP-VAT |
LST |
1,50,004.00 |
1999-00 |
Sales Tax Authority, Indore |
MP-VAT |
LST |
47,30,692.00 |
1998-99 |
Assessing Authority, Indore |
Custom & Central Excise |
Customs Duty & Interest on nonexport of Gold Jewellery against Gold Loan by Associates |
2,72,67,919.00 |
1999-00 |
Pending before Hon''ble Delhi High Court as per directions of Hon''ble Supreme Court of India. |
Delhi VAT |
CST |
9,05,117 |
2013-14 |
Sales Tax Authority, Delhi |
Nature of Statute |
Nature of Dues |
Year |
Amount |
Authority |
CST |
CST |
1989-90 |
1,49,770 |
STAT |
APGST |
Sales Tax |
1993-94 |
6,30,615 |
STAT, VIZAG |
CST |
CST |
1993-94 |
4,41,446 |
STAT, VIZAG |
CST |
CST |
1994-95 |
2,04,081 |
AC LTU |
APGST |
Sales Tax |
1992-93 |
13,96,269 |
STAT, VIZAG |
APGST |
Sales Tax |
1993-94 |
17,62,687 |
STAT, VIZAG |
APGST |
Sales Tax |
1997-98 |
58,43,100 |
STAT, VIZAG |
APGST |
Sales Tax |
1999-00 |
39,04,454 |
STAT, VIZAG |
APGST |
Sales Tax |
2000-01 |
2,52,926 |
STAT,VIZAG |
VAT |
VAT |
2008-09 |
7,84,474 |
STAT |
VAT |
VAT |
2006-07 |
6,76,058 |
AC LTU, STAT |
VAT |
VAT |
2007-08 |
71,000 |
AC Audit |
VAT |
VAT |
2010-11 |
12,83,848 |
CTO VIZAG |
VAT |
VAT |
2012-13 |
99,49,808 |
ADC (CTO) |
Kolkata Region
Nature of Statute |
Nature of Dues |
Year |
Amount |
Authority |
Sales Tax Laws |
Sales Tax |
2005-06 |
11,31,000 |
Appellate Board |
Sales Tax Laws |
Sales Tax |
2006-07 |
77,61,000 |
Appellate Board |
Sales Tax Laws |
Sales Tax |
2013-14 |
54,21,000 |
Calcutta High Court |
Sales Tax Laws |
West Bengal VAT |
2013-14 |
60,54,000 |
Calcutta High Court |
Nature of Statute |
Nature of Dues |
Year |
Amount |
Authority |
Rajasthan Sales Tax Act |
Sales Tax |
2003-04 |
1,49,46,540 |
Rajasthan Kar Board, Ajmer. (Rs, 35.49 lacs have been deposited under protest). Sales Tax Dept. has appealed against the order of DC (Appeals) in Kar Board. |
Rajasthan Sales Tax Act |
Sales Tax |
1999-00 |
26,07,605 |
Rajasthan Kar Board, Ajmer. Pending with Kar Board against demand on account of 4767 MT DAP u/s 84 of RST Act. |
Rajasthan Value Added Tax |
VAT |
2012-13 |
68,16,650 |
Sales Tax Demand towards no adjustment of Input credit and Refund Adjustment Voucher. Relevant documents submitted. |
Rajasthan Value Added Tax |
VAT |
2013-14 |
1,75,861 |
Sales Tax Demand towards no submission of Export declaration forms. Relevant documents submitted. |
Rajasthan Value Added Tax |
VAT |
2014-15 |
4,95,72,650 |
Sales Tax Demand towards no submission of Export declaration forms. Relevant documents submitted. |
Rajasthan Value Added Tax |
CST |
2015-16 |
24,72,860 |
Sales Tax Demand towards no submission of F Forms. |
Rajasthan Value Added Tax |
VAT |
2015-16 |
86,880 |
Sales Tax Demand towards no submission of Export declaration forms. |
Income Tax |
Income Tax |
2009-10 to 2014-15 |
27,950 |
TDS Demand from 2009-10 to 2014-15. |
Income Tax |
Income Tax |
1,130 |
TDS Demand for 2017-18. |
Vizag Region
Nature of Statute |
Nature of Dues |
Year |
Amount |
Authority |
APGST* |
APGST |
1968-69 |
18,56,325 |
STAT, HYD |
APGST* |
APGST |
1986-87 |
25,05,806 |
STAT,VIZAG |
APGST* |
APGST |
1989-90 |
4,79,000 |
STAT |
APGST* |
APGST |
1991-92 |
19,34,139 |
AC LTU |
CST** |
CST |
1994-95 |
8,41,695 |
AC LTU |
APGST* |
APGST |
1997-98 |
25,27,960 |
STAT,VIZAG |
CST** |
CST |
2007-08 |
1,04,614 |
ADC |
Service Tax |
Service Tax |
2003-06 |
12,65,26,554 |
CESTAT, Hyderabad |
Service Tax |
Service Tax |
2013-14 |
73,21,203 |
CESTAT, Hyderabad |
Service Tax |
Service Tax |
2013-14 |
84,41,967 |
CESTAT, Hyderabad |
Customs Duty |
Customs Duty |
2009-10 |
17,05,405 |
CESTAT, Hyderabad |
*Out of the disputed amounts relating to APGST the RO has deposited Rs, 83,75,068/- with authorities. **Out of the disputed amounts relating to CST the RO had deposited Rs, 8,54,772/- with authorities.
Nature of Statute |
Nature of Dues |
Year |
Amount |
Authority |
OrrisaSales Tax |
Interest Penalty |
1978-79 |
26,50,388 |
High Court of Orissa |
OrrisaSales Tax |
OdishaSales Tax |
1978-79 |
34,00,919 |
High Court of Orissa |
OrrisaSales Tax |
OdishaSalesTax |
1978-79 |
1,70,046 |
High Court of Orissa |
OrrisaSales Tax |
Interest Penalty |
1979-80 |
6,53,452 |
High Court of Orissa |
OrrisaSales Tax |
Central Sale Tax |
1982-83 |
34,83,020 |
High Court of Orissa |
OrrisaSales Tax |
Interest |
1978-79 |
3,57,42,030 |
High Court of Orissa |
OrrisaSales Tax |
DEPB |
2006-09 |
14,98,22,308 |
Odisha Sales Tax Tribunal |
OrrisaSales Tax |
DEPB |
2010-12 |
5,08,43,080 |
High Court of Orissa |
OVAT |
Value Added Tax |
2013-14 |
14,28,18,841 |
Odisha Sales Tax Tribunal |
CST (Odisha) |
Central Sale Tax,1956 |
2013-14 |
58,07,05,822 |
Odisha Sales Tax Tribunal |
ET (Odisha) |
Entry Tax |
2013-14 |
52,63,10,091 |
Odisha Sales Tax Tribunal |
Central Excise Act |
Service Tax |
2003-05 |
4,50,58,805 |
Customs Excise & Service Tax Appellate Tribunal |
Central Excise Act |
Service Tax |
2003-07 |
20,15,26,042 |
Customs Excise & Service Tax Appellate Tribunal |
Central Excise Act |
Service Tax |
2007-08 |
4,45,67,113 |
Customs Excise & Service Tax Appellate Tribunal |
Central Excise Act |
Service Tax |
2008-10 |
9,06,80,665 |
Customs Excise & Service Tax Appellate Tribunal |
Central Excise Act |
Service Tax |
2010-11 |
4,48,35,541 |
Commissioner of customs Excise & Service Tax, Bhubaneswar |
Central Excise Act |
Service Tax |
2011-12 |
4,80,55,983 |
Commissioner of customs Excise & Service Tax, Bhubaneswar |
Central Excise Act |
Service Tax |
2009-12 |
40,12,00,195 |
Commissioner of customs Excise & Service Tax, Bhubaneswar |
Central Excise Act |
Service Tax |
2009-11 |
91,30,743 |
Commissioner of customs Excise & Service Tax, Bhubaneswar |
Central Excise Act |
Service Tax |
2012-13 |
44,95,526 |
Commissioner of customs Excise & Service Tax, Bhubaneswar |
Central Excise Act |
Service Tax |
2012-13 |
5,34,29,388 |
Commissioner of customs Excise & Service Tax, Bhubaneswar |
Central Excise & Custom Act |
Customs Duty |
2012-13 |
1,49,02,87,737 |
Ass. Comm. ,CE&C, Balasore Division, Balasore |
Central Excise & Custom Act |
Customs Duty |
2017-18 |
91,628 |
Asst. Comm., Customs, Paradip |
Central Excise & Custom Act |
Customs Duty |
2017-18 |
1,95,117 |
Asst. Comm., Customs, Paradip |
Central Excise & Custom Act |
Customs Duty |
2017-18 |
33,020 |
Asst. Comm., Customs, Paradip |
Central Excise & Custom Act |
Customs Duty |
2017-18 |
1,32,576 |
Asst. Comm., Customs, Paradip |
Central Excise Act |
Service Tax |
2017-18 |
12,664 |
Asst. Comm., Customs Excise & Service Tax, Bhubaneswar |
CST (ODISHA) |
Sales Tax |
2014-15 |
4,93,756 |
Dy. Commissioner, Comm Tax |
CST (ODISHA) |
Sales Tax |
2011-12, 2012-13, 2014-15 |
75,79,583 |
Addl. Commissioner (Appeals) |
Corporate Office
Nature of Statute |
Nature of Dues |
Year |
Amount |
Authority |
Income tax Act |
Income tax Act |
2015-16 |
1,17,51,934 |
CIT(A) |
Income tax Act |
Income tax Act |
2014-15 |
1,55,24,136 |
CIT(A) |
Income tax Act |
Income tax Act |
2013-14 |
3,34,92,278 |
ITAT |
Income tax Act |
Income tax Act |
2012-13 |
4,52,05,719 |
ITAT |
Income tax Act |
Income tax Act |
2011-12 |
7,82,45,209 |
ITAT |
Income tax Act |
Income tax Act |
2010-11 |
3,71,73,260 |
ITAT |
Income tax Act |
Income tax Act |
2009-10 |
8,06,98,915 |
ITAT |
Income tax Act |
Income tax Act |
2005-06 |
4,51,65,330 |
Supreme Court |
Income tax Act |
Income tax Act |
2004-05 |
3,58,34,174 |
ITAT |
Income tax Act |
Income tax Act |
2003-04 |
1,08,96,834 |
ITAT |
Income tax Act |
Income tax Act |
2002-03 |
8,56,73,253 |
ITAT |
Income tax Act |
Income tax Act |
2001-02 |
1,17,77,218 |
ITAT/High Court |
Income tax Act |
Income tax Act |
2000-01 |
3,94,62,696 |
ITAT |
Income tax Act |
Income tax Act |
1999-00 |
2,85,69,897 |
ITAT |
Income tax Act |
Income tax Act |
1998-99 |
58,90,533 |
ITAT |
Income tax Act |
Income tax Act |
1997-98 |
50,22,928 |
ITAT |
Income tax Act |
Income tax Act |
1996-97 |
3,73,75,477 |
ITAT |
Out of the above demand, an amount of Rs, 21,61,86,357.00 has been deposited by the company Ahmadabad Region
Nature of Statute |
Nature of Dues |
Year |
Amount |
Authority |
Custom Act 1962 |
Differential Custom Duty |
2013-14 |
31,29,05,785 |
CESTAT Chennai |
Annexure-2 To the Independent Auditors'' Report of even date on theInd AS standalone financial statements of MMTC Ltd.
Report on the Internal Financial Controls over financial reporting under Section 143(3) (i) of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of MMTC Ltd. ("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 issued by the Institute of Chartered Accountants of India (the 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 Companies Act, 2013.
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 and the Standards on Auditing, issued by the ICAI deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note 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 exist, and testing and evaluating the design and operating effectiveness of the internal control based on the assessed risk . The procedures selected depend on the auditor''s judgment, including the assessment of risks of material misstatements of the Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of 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 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 Ind AS financial statements in accordance with generally accepted 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 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, 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 31st March 201 8, 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 O.P. Tulsyan & Co.
Chartered Accountants
FRN.:500028N
Place: New Delhi Rakesh Agarwal
Date:29.05.2018 Partner
M No.:081808
Mar 31, 2017
INDEPENDENT AUDITORS'' REPORT 91 TO THE MEMBERS OF MMTC LTD. Report on the Standalone Ind AS Financial Statements
1. We have audited the accompanying Standalone Ind AS financial statements of MMTC Limited ("the Company"), which comprises the Balance Sheet as at 31st March, 2017, the statement of Profit and Loss (including other comprehensive income), the statement of Cash Flows and statement of changes in Equity for the year then ended and a summary of significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Ind AS Financial Statements
2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone Ind AS financial statements to give a true and fair view of the financial position, financial performance (including 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 specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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.
Auditors'' Responsibility
3. 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 in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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 auditors'' 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 t h e sta n d alone n 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.
Opinion
In our opinion and to the best of our information and according to the explanation provided to us, the aforesaid 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 Ind AS of the financial position of the Company as at 31stMarch, 2017 and its financial performance including other comprehensive income, its cash flows and the changes in the equity for the year ended on that date
Emphasis of Matter
a. We draw attention to Note No. 36 (ix) to the standalone Ind AS financial statements in respect of non-provision of liability, if any arises, in case of non- extension of time/waiver/write off of GR-1 forms.
b. We draw attention to Note No. 49 to the standalone Ind AS financial statements in respect of Balances under Sundry Creditors/Sundry Debtors/Claims Recoverable/Loans &advances/Other Liabilities which, in many cases have not been confirmed and any adjustments due to consequent reconciliation, if any, required is not ascertainable.
c. We draw attention to Note No.36 (v), (vi) and 38 (c) to the standalone Ind AS financial statements in respect of fund based and non-fund based exposure of the Company in M/s Neelachal Ispat Nigam Ltd. (NINL) - a Joint Venture Company.
Our opinion is not modified in respect of this matter.
Other Matters
A. The comparative financial information of the Company for the year ended March 31, 2016 and the transition date opening balance sheet as at April 1, 2015 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements for the years ended March 31, 2016 and March 31, 2015 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended). Financial statement for the financial year ended 31st March 2016 were audited by us and expressed an unmodified opinion vide report dated 27th May 2016, whereas financial statement for the year ended 31st March 2015 which were audited by the predecessor auditor and expressed an unmodified opinion vide report dated 21st May 2015. The adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us.
B. We did not audit the Ind AS financial statements/ financial information of 8 regional offices included in the standalone financial statements of the company whose Ind AS financial statements/financial information reflect total assets of INR 45,597.62 million as at March 31, 2017 and total revenue of INR 78,702.83 million for the year ended on that date, as considered in the standalone Ind AS financial statements. The Ind AS financial statements/financial information of these branches have been audited by the branch auditors whose reports have been furnished to us and our opinion in so far as it relates to the amount and disclosure included in respect of these branches, is based solely on the report of such branch auditors.
Report on Other Legal and Regulatory Requirements
4. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure-1" a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.
5. As required by Section 143 (3) of the Act, we report that:
a) We have sought and obtained all the information and explanations, which to the 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 reports on the accounts of the branch offices of the Company audited under section 143 (8) of the Act by the Branch auditors have been sent to us and have been properly dealt with by us in preparing the report;
d) The Balance Sheet, the Statement of Profit and Loss, the statement of Cash Flows and Statement of Changes in Equity, referred to in this report are in agreement with the books of account.
e) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with relevant rules issued thereunder;
f) On the basis of written representations received from the directors as on 31st March 2017, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2017 from being appointed as a director in terms of Section 164(2) of the Companies Act, 2013.
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. There are pending litigations including matters relating to sales tax, custom duty and excise duty which are disclosed as contingent liability - refer to Note 36 and 38 to the standalone Ind AS financial statements, the impact of the same is unascertainable as the matters are sub-judice.
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.
iii. There has been no delay in transferring amounts required to be transfe r red t o t he investors Education and Protection Fund by the Company.
iv. With respect to the adequacy of internal financial controls over financial reporting of the company and operating effectiveness of such controls, refer to our separate Report in "Annexure-2"
v. The company has provided requisite disclosure in note no. 52 to these standalone Ind AS financial statements as to holding of Specified Bank Notes on 8th November 2016 and 30th December 2016 as well as dealing in specified notes during the period 8th November 2016 to 30th December 2016. The disclosures are in accordance with the books of accounts maintained by the company and as produced before us by the management.
6. As required by C & AG of India through sub-directions, issued under Section 143 (5) of the Company''s Act, we give our report in the attached "Annexure-3"
(Referred to in Paragraph 1 under the âOther Legal & Regulatory Requirementâ )
We further report that:
1. In Respect of Its Fixed Assets
i. The Company has maintained proper records in respect of its fixed assets showing full particulars including quantitative details and situation of fixed asset.
ii. Based on the physical verification reports produced before us, in our opinion, the said assets have been physically verified by the management at reasonable intervals.
iii. Title Deeds of immoveable property are held in the name of the company except in the case mentioned below:
Region/Office |
Asset Description |
Gross Value |
Area |
Remarks |
Corporate Office |
Land for Residential Colony at New Delhi |
13.16 Lakhs |
32.33 Acres |
Lease Agreement is in Joint Name of MMTC and State Trading Corporation |
Bhubaneshwar Office |
Residential Building, Roads, Culverts and Electrical Installations |
49.01 Lakhs |
2 Acres |
Lease Deed Expired in 2011 |
2. In Respect of Its Inventory
i. As explained to us, the inventories have been physically verified during the year by the management.
ii. In our opinion and according to the information and explanation given to us, no material discrepancies were noticed during the course of physical verification.
iii. In our opinion and according to the information and explanation given to us, the procedure of physical verification of inventories followed by the management needs to be further strengthened in relation to the size of the MMTC Limited and the nature of its business.
3. Loans given to parties covered under section 189
The company has granted unsecured loan to one of itsjoint venture company, M/s NeelachalIspat Nigam Limited.
i. In our opinion and according to the information and explanation given to us, terms and conditions on which loan has been granted is not pre-judicial to the interest of the company.
ii. According to the information and explanation given to us repayment schedule has been agreed with the company.
iii. According to the information and explanation given to us, there is no amount over due.
4. Compliance of Provision of Section 185 and 186 of the Companies Act, 2013 in respect of loans,guarantees and securities
According to the information and explanations given to us, and as per the records verified by us, the company has complied the provisions of Section 185 and 186.
5. Acceptance of Deposits 96
According to the information and explanations given to us, the company has not accepted deposits as per the directive issued by the Reserve Bank of India and the provision of Section 73 to 76 or any other relevant provision of the Act and the rules framed there under.
6. Maintenance of Cost Records
As explained to us, maintenance of cost records has not been prescribed by the Central Government for the company under Section 148(1) of the Act.
7. Undisputed & Disputed Statutory Dues
(a) According to the information and explanations given to us and as per the records verified by us, the Company has been regular in depositing undisputed statutory dues including Income Tax, Provident Fund dues, Professional Tax, Value Added Tax and Service Tax with the appropriate authorities.
(b) There were no undisputed amount payable in respect of Income Tax, Provident Fund dues, Professional Tax, Value Added Tax and Service Tax and other statutory dues in arrear as at 31st March 2017 for more than six months from the date they became payable.
(c) In case if dues of Income Tax or sales tax or service tax or duty of custom or duty of excise or value tax or cess have not been deposited on account of any dispute are attachedas Annexure A:
8. Loans from Banks/Financial Institutions/Government/Debentures
According to the information and explanations given to us and as per the records verified by us, the company has not defaulted in repayment of loans or borrowings to a financial institution, bank, Government or dues to debenture holders.
9. Proceeds of Public Issue(including debt instruments)/Term Loans
According to the information and explanations given to us and as per the records verified by us, the Company has not raised any money during the year through initial/further public offer (including debt instruments). Term loans raised by the company during the year have been utilized for the purpose for which they were obtained.
10. Frauds on or by the Company
According to the information and explanations given to us and as per the records verified by us, carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the company or its officers, noticed or reported during the year, nor have we been informed of such case by the management.
11. Managerial Remuneration
According to the information and explanations given to us and as per the records verified by us, managerial remuneration has been paid/provided for by the company during the year under review is within the purview of Section 197, read with Schedule V to the Act.
12. Nidhi Companies
The Company is not a Nidhi Company during the year under review and hence, the criteria as stipulated under Nidhi Rules 2014 are not applicable to the company.
13. Related Party Transactions 97
As per the information and explanations given during the course of our verification, in our opinion, all transactions with the related parties made by the company were in compliance with section 177 and 188 of the Act, to the extent applicable to the company during the year, the relevant details in respect of which have been appropriately disclosed in the Ind AS financial statements.
14. Preferential Issue
During the year, the company has not made any preferential allotment or private placement of equity shares or convertible debentures and hence the requirements of Section 42 of the Act are not applicable.
15. Non-Cash Transactions with Director''s etc.
As per the informationâs and explanations provided to us, during the year, the Company has not entered into any non-cash transactions with directors or persons connected with the directors within the purview of section 192 of the Act are not applicable.
16. Provision of 45-IA of the Reserve Bank of India Act,1934
According to the information and explanations given to us and as per the records verified by us, during the year, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934.
Nature of Statute |
Nature of Dues |
Year |
Amount |
Authority |
Bombay S ales T ax Act |
S ales T ax |
986 -87 |
3 ,08,644 |
Jt. Comm. Of Sale tax |
Bombay S ales T ax Act |
S ales T ax |
989 -90 |
4,96,05,778 |
Jt. Comm. Of Sale tax |
Bombay S ales T ax Act |
S ales T ax |
990-91 |
23,30,45,478 |
Jt. Comm. Of Sale tax |
Bombay S ales T ax Act |
S ales T ax |
991-92 |
28,98,738 |
Jt. Comm. Of Sale tax |
Bombay S ales T ax Act |
S ales T ax |
2001 -C2 |
45,03,961 |
Jt. Comm. Of Sale tax |
Maharashtra VAT Tax |
S ales T ax |
2CC8 -09 |
26,04,822 |
Jt. Comm. Of Sale tax |
Maharashtra VAT Tax |
S ales T ax |
2008 -09 |
1423373 |
Jt. (Cmm. Of Sale tax |
Maharashtra VAT Tax |
S ales T ax |
2007 -08 |
23,99,218 |
Jt. Comm. Of Sale tax |
Maharashtra VAT Tax |
S ales T ax |
20D -11 |
45,82,08 |
Jt. Comm. Of Sale tax |
Maharashtra VAT Tax |
S ales T ax |
20D -11 |
122,470 |
Jt. Comm. Of Saltax |
Maharashtra VAT Tax |
S ales T ax |
2009 -D |
9 ,58,379 |
Jt. Comm. Of Sale tax |
Central Sale Tax,956 |
S ales T ax |
2011 -2 |
47,25,44 |
Jt. Comm. Of Sale tax |
Central Sale Tax,956 |
S ales T ax |
2008 -09 |
5 1,81978 |
Jt. Comm. Of Sale tax |
Cental Sale Tax,956 |
S ales T ax |
2007 -08 |
7197308 |
Jt. Comm. Of Sale tax |
Custom Act,962* |
Custom Act |
202 -B |
349229,67 1 |
Commissioner of customs |
*INR 284124,643 paid to Custom Department.
Bengaluru Region SRO_
Nature of Statute |
Nature of Dues |
Year |
Amount |
Authority |
Service Tax |
Service Tax |
2008 -09 |
016,502 |
Commissioner of Custom, Excise and Servi T ax, Karnatak a |
Chennai Region_
Nature of Statute |
Nature of Dues |
Year |
Amount |
Authority |
TNGST Act |
S ale T ax |
998-99 |
863,114 |
Madras Hig Court'' |
TNGST Act |
S ale T ax |
2000 -01 |
4,43,46 |
Sales Tax Appeals Tribunal |
TN GST Act |
S ale T ax |
999-00 |
1152,785 |
Madras High Court'' |
TN GST Act |
S ale T ax |
2001 -02 |
178,566 |
Assistant Commissioner of Commercial T axes |
TN GST Act |
Vat & Penalty |
2008 -09 |
3,55,08,765 |
Jt. Commissioner of Commercial Taxes Appeals |
Delhi Region_
Name of Statute |
Nature of Dues |
Amount (in Rs.) |
Period to which the amount relates |
Forum where dispute is pending |
Delhi VAT |
CST/LST /Interest/Penalty(Gold Commemorative medallions ) |
37,45,290.00 |
200 2-03 |
Commissioner (Appeals), DVAT |
Delhi VAT |
LST |
1,65,303.00 |
984 -85 |
Dy. Commissioner(Appeals ) |
Delhi VAT |
LST/CS T |
6,57,32207.00 |
986 -87 |
Add. Commissioner (Appeals ) |
Delhi VAT |
LST/CS T |
4,3186,549.00 |
987 -88 |
Add. Commissioner (Appeals ) |
Delhi VAT |
LST/CS T |
3,77,96,673.00 |
988 -89 |
Add. Commissioner (Appeals ) |
Delhi VAT |
LST |
618734000 |
989 -90 |
Add. Commissioner (Appeals ) |
Delhi VAT |
LST |
2223,98.00 |
990-91 |
Add. Commissioner Appeals ) |
UP-VAT |
LST/CS T |
6,17,588.00 |
990-91 |
Moradabad, Allahabad High Court |
UP-VAT |
LST |
4,70,57800 |
991-92 |
Moradabad, Allahabad High Court |
UP-VAT |
LST |
2,64,037.00 |
992-93 |
Moradabad, Allahabad High Court |
UP-VAT |
LST |
185,0000 |
993-94 |
Moradabad, Allahabad High Court |
UP-VAT |
LST |
B35,ma) |
987 -88 |
Joint Commissioner (Appeals), Kanpur |
UP-VAT |
VAT |
6,1,808.00 |
996-97 |
Commissioner (Appeals), U-VAT |
UP-VAT |
VAT Interest for n-submission of Form3B (Gold)& Non- |
62,457.00 |
2007 -08 |
Commissioner (Appeals), UJVAT |
submission of Form 3CI(Mentha Oil) |
99 |
|||
Haryana VAT |
LST |
424587.00 |
992-93 |
Faridabad, Pupb & Haryana High Court, Chandigarh |
MP-VAT |
LST |
150,004.00 |
999-00 |
Sales T ax Authority, Indore |
MP-VAT |
LST |
473Q692.00 |
998-99 |
Assessing Authority, Indore |
Custom & Central Excise |
Customs Duty & Interest on non export of Gold Jewellery against Gold Loan by Associates |
2,72,67,9 9.00 |
999-00 |
Pending before Honâble Delhi High Court as per directions of Honâble Supreme Court of India. |
Custom & Central Excise |
Custom Duty |
2,00,00,(1000 |
2005 -07 |
Dy. Commissioner of Customs (Appeals) |
Custom & Central Excise |
Custom Duty |
15050,000 |
2007 -08 |
Dy. Commissioner of Customs (Appeals) |
Custom & Central Excise |
Custom Duty |
6180000.00 |
2008 -09 |
Dy. Commissioner of Customs, (Appeals) |
Custom & Central Excise |
Custom Duty |
61801000(00 |
2009 -0 |
Dy. Commissioner of Customs, (Appeals) |
Custom & Central Excise |
Excise Duty/Interest/ Penalty |
R201878.00 |
II - § |
Commissioner of Central Excise, (Appeals) |
Delhi VAT |
CST |
1120,842.00 |
202 -B |
Sales T ax Authority, Delhi |
Haryana VAT |
VAT |
7,380.00 |
20B -4 |
S ales T ax Authority, Ambala |
Custon & Central Excise |
Custom Duty |
627,085.00 |
20B -4 |
Deputy Commissioner of Customs |
Custom & Central Excise |
Excise Duty |
193174,658.0) |
20B -4 |
Commissioner of Central Excise |
Hyderabad Region
Nature of Statute |
Nature of Dues |
Year |
Amount |
Authority |
CST |
CST |
989 -90 |
149,770 |
STAT |
APGST |
APGST |
993-94 |
63Q615 |
STAT,VIZAG |
CST |
CST |
993-94 |
4,41446 |
STAT,VIZAG |
CST |
CST |
994-95 |
2,04,481 |
AC LTU |
APGST |
APGST |
991-92 |
24,02,576 |
STAT,VIZAG |
APGST |
APGST |
992-93 |
3 ,96269 |
STAT,VIZAG |
APGST |
APGST |
993-94 |
7,62,687 |
STAT,VIZAG |
APGST |
APGST |
997-98 |
58,43,10 |
STAT,VIZAG |
APGST |
APGST |
998-99 |
55,65,47 |
STAT,VIZAG |
APGST |
APGST |
999-00 |
3 9,04,454 |
STAT,VIZAG |
APGST |
APGST |
200 0-01 |
2,52,926 |
STAT,VIZAG |
VAT |
VAT STAT E |
2008 -09 |
7,84,474 |
STAT |
CST ,VAT |
CST ,VAT |
2004 -05 CST,2006 -07 VAT |
6,76,058 |
AC LTU,STA T |
VAT |
VAT |
2007 -08 |
71000 |
AC Audit |
VAT |
VAT |
2010-11 |
3 3 8,97216 |
CTO VIZAG |
Kolkata Region _
Nature of Statute |
Nature of Dues |
Year |
Amount |
Authority |
S ale Tax L aw |
S ale T ax |
2005 -06 |
131000 |
Appellate Board |
S ale Tax L aw |
S ale T ax |
2006 -07 |
77,61000 |
Appellate Board |
S ale Tax L aw |
S ales T ax |
2013 -14 |
5421000 |
Appellate Board |
S ale Tax Law |
West Bengal Vat |
2013 -14 |
6054,000 |
Appellate Board |
Nature of Statute |
Nature of Dues |
Year |
Amount |
Authority |
|
Rajasthan Sale Tax Act |
Sale Tax |
2003-04 |
1,49,46,540 |
Rajasthan Kar Board, Ajmer |
|
Rajasthan Sale Tax Act |
Sale Tax |
1999-00 |
26,07,605 |
Rajasthan Kar Board, Ajmer. |
|
Rajasthan Value Added Tax |
Value Added Tax |
2012-13 |
68,16,650 |
Rajasthan Kar Board |
|
Rajasthan Value Added Tax |
Value Added Tax |
2013-14 |
2,65,46,940 |
Rajasthan Kar Board |
|
CST Act |
CST |
2013-14 |
54,28,220 |
Rajasthan Kar Board |
|
Rajasthan Value Added Tax |
Value Added Tax |
2014-15 |
4,95,72,650 |
Rajasthan Kar Board |
|
CST Act |
CST |
2014-15 |
14,15,000 |
Rajasthan Kar Board |
|
Income Tax |
Income Tax |
2014-15 |
27,950 |
Rajasthan Kar Board |
Vizag Region_
Nature of Statute |
Nature of Dues |
Year |
Amount |
Authority |
APGST |
APGST |
1968 -69 |
856325 |
STAT, Hybd |
APGST |
APGST |
1985 -86 |
25,05,806 |
STAT,VIZAG |
APGST |
APGST |
1986 -87 |
2,70,83,841 |
STAT,VIZAG |
APGST |
APGST |
1989 -90 |
4,79,000 |
STAT |
APGST |
APGST |
1991-92 |
9 ,34, B9 |
AC LTU |
CST |
CST |
1994-95 |
8,41,695 |
AC LTU |
APGST |
APGST |
1997-98 |
25,27,960 |
STAT,VIZAG |
CST |
CST |
2007 -08 |
1,04,64 |
ADC |
Service Tax |
Service Tax |
2003 -06 |
2,6526554 |
CESTAT, Hyderabad |
Bhubaneswar Region _
Nature of Statute |
Nature of Dues |
Year |
Amount |
Authority |
S ale T ax |
Interest Penalty |
1978 -79 |
26,50388 |
High Court of Orissa |
S ale T ax |
S ale T ax |
1978 -79 |
34,00,9 9 |
High Court of Orissa |
S ale T ax |
S ale T ax |
1978 -79 |
1,70,046 |
High Court of Orissa |
S ale T ax |
Interest Penalty |
1979 -80 |
6,53,452 |
High Court of Orissa |
Central Sale Tax,956 |
Central Sale Tax,956 |
1982 -83 |
34,83,020 |
High Court of Orissa |
S ale T ax |
Interest Penalty |
1978 -79 |
3,57,42,030 |
High Court of Orissa |
S ale T ax |
DEPB |
2006 -09 |
4,9822,308 |
Addl. Commissioner, Sale Tax, Odisha |
S ale T ax |
DEPB |
2010-12 |
5,08,43,080 |
Addl. Commissioner, Sale Tax, Odisha |
Value Added T ax |
Value Added T ax |
2011-12 |
4288841 |
Odisha S ales Tax Tribun al |
Central Sale Tax,956 |
Central Sale Tax,95, |
203 -I4 |
58,07,05,822 |
Odisha S ales Tax Tribunal |
ETC Odisha |
EntryTax |
203 -I4 |
52,63,0091 |
Odisha S ales Tax Tribunal |
Central Excise Act |
Service Tax |
2003 -05 |
4,4127,08 |
Customs Excise & Service Appellate Tribunal |
Central Excise Act |
Service Tax |
2003 -07 |
7,73,29,557 |
Customs Excise & Service Appellate Tribunal |
Cental Excise Act |
Service Tax |
2007 -08 |
4,0620|B8 |
Customs Excise & Service Appellate Tribunal |
Central Excise Act |
Service Tax |
2008 -09 |
8,735737 |
Customs Excise & Service Appellate Tribunal |
Central Excise Act |
Service Tax |
2007-08 |
4,63,06,82 |
Commissioner of customs Excise & Service Tax Bhubaneswar |
Central Excise Act |
Service Tax |
2008 -09 |
4,5225,441 |
Commissioner of customs Excise & Service Tax Bhubaneswar |
Central Excise Act |
Service Tax |
2009 -10 |
373108366 |
Commissioner of customs Excise & Service Tax Bhubanswar |
Central Excise Act |
Service Tax |
2009 -11 |
852859 |
101 Commissioner of customs Excise & Service Tax Bhubaneswar |
Central Excise Act |
Service Tax |
2011-12 |
4155,573 |
Commissioner of customs Excise & Service Tax Bhubaneswar |
Central Excise Act |
Service Tax |
201 2-13 |
3,54,97,29 |
Commissioner of customs Excise & Service Tax Bhubaneswar |
Central Excise Act |
Service Tax |
2013-14 |
5,30,76 |
Commissioner of customs Excise & Service Tax Bhubaneswar |
Central Excise Act |
Central Excise Act |
2014-15 |
149,02,87,737 |
Ass. Comm. CE Balasore Division, Balasore |
Corporate Office
Nature of Statute |
Nature of Dues |
Year |
Amount |
Authority |
Income tax Act |
Income tax Act |
201 4-5 |
155,24,36 |
CIT(A) |
Income tax Act |
Income tax Act |
2013-14 |
3,34,92278 |
CIT(A) |
Income tax Act |
Income tax Act |
2012-13 |
5,30,79 |
ITAT |
Income tax Act |
Income tax Act |
2011-12 |
9177,9 9 5 |
CIT(A) |
Income tax Act |
Income tax Act |
2010-11 |
3,7173,260 |
ITAT |
Income tax Act |
Income tax Act |
2009 -0 |
5,96,86297 |
ITAT |
Income tax Act |
Income tax Act |
2008 -09 |
144,83,43 |
ITAT |
Income tax Act |
Income tax Act |
2004 -05 |
3,58,34,74 |
ITAT |
Income tax Act |
Income tax Act |
2003 -04 |
108,96,834 |
ITAT |
Income tax Act |
Income tax Act |
2002 -03 |
8,56,73,253 |
ITAT |
Income tax Act |
Income tax Act |
2001 -02 |
17,7728 |
ITAT/High Court |
Income tax Act |
Income tax Act |
200 0-01 |
3,94,62,696 |
ITAT |
Income tax Act |
Income tax Act |
1999-00 |
2,85,69,897 |
ITAT |
Income tax Act |
Income tax Act |
1998-99 |
58,90533 |
ITAT |
Income tax Act |
Income tax Act |
1997-IB |
5022,928 |
ITAT |
Income tax Act |
Income tax Act |
1996-7 |
3,73,75,477 |
ITAT |
Out of the above demand, an amount of Rs. 30.31.33.895.00 has been deposited by the company |
Ahmadabad Region
Nature of Statute |
Nature of Dues |
Year |
Amount |
Authority |
Custom Act 1962 |
Deferential Custom Duty |
2013 -I4 |
3Q936225 |
CESTAT Chaai |
Report on the Internal Financial Controls over financial reporting under Section 143(3)(i) of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of MMTC Ltd. ("the Company") as of March 31, 2017, 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 issued by the Institute of Chartered Accountants of India (the 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 Companies Act, 2013.
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 and the Standards on Auditing, issued by the ICAI deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those standards and the Guidance Note 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 exist, and testing and evaluating the design and operating effectiveness of the internal control based on the assessed risk . The procedures selected depend on the auditor''s judgment, including the assessment of risks of material misstatements of the Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting: 103
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 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 Ind AS financial statements in accordance with generally accepted 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 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, subject to a few areas in which improvement, as discussed and agreed with the management, is required, 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 31st 2017, 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.
Place: New Delhi For O.P. Tulsyan & Company
Date: 29.05.2017 Chartered Accountants
FRN.: 500028N
Rakesh Agrawal
Partner
M No.: 081808
Mar 31, 2016
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of MMTC LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss Account and the Cash Flow Statement for the year then ended, and summary of the significant accounting policies and other explanatory information.
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 ("the Act") with respect to the preparation 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 of 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 the preparation and presentation of the financial statements that give a true and Fairview and are free from material misstatement, whether due to fraud or error.
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 Rules made there under.
We conducted our audit in accordance with the Standards on Auditing, specified under section 143(10) of the Companies Act, 2013 to the extent applicable.
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 Fairview 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 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.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and Fairview in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and its profit and its cash flows for the year ended on that date.
Emphasis of matter
a. We draw attention to Note No. 6.2 (3) to the standalone financial statement in respect of write back of provision towards diminution in the value of shares in ICEX amounting to Rs. 241.10 million subsequent to sale of its investment on profit and subscription of right issue of the shares of ICEX.
b. We draw attention to Note No. 16 (ii) (b) to the standalone financial statement in respect of recognition of interest income amounting to Rs. 389.90 million from the retained amount of Rs. 609.90 million. The amount was retained during 2014-15 out of export proceeds of "Wheat A/c-FCI".
c. We draw attention to Note No. 19 (i) (c) and Note No. 21 to the standalone financial statement in respect of fund based and non-fund based exposure of the company in Neelachal Ispat Nigam Limited.
d. We draw attention to Note No. 22 to the standalone financial statements in respect of non provision of liability, if any, in case of non-extension of time/waiver/write off of GR-1 forms.
e. We draw attention to Note No. 38 to the standalone financial statements in respect of Balances under Sundry Debtors/claims Recoverable/Loans & Advances/Sundry Creditors/Other Liabilities which, in many cases have not been confirmed and consequent reconciliation/adjustments if any, required upon such confirmation are not ascertainable.
Our opinion is not modified in respect of these matters.
Other Matters
We did not audit the financial statements/financial information of 10 regional offices included in the standalone financial statements of the company whose financial statements/financial information reflect total assets of INR 26,710.90 Million as at March 31,2016 and total revenue of INR 89,060.21 Million for the year ended on that date, as considered in the standalone financial statements. The financial statements/financial information of these branches have been audited by the branch auditors whose reports have been furnished to us and our opinion in so far as it relates to the amount and disclosures included in respect of these branches, is based solely on the report of such branch auditors.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, based on the comments in the auditors'' reports of the corporate office & branch auditors of the company, we give in the "Annexure-1" 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 and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.
c) The reports on the accounts of the branch offices of the Company audited under section 143 (8) of the Act by the Branch auditors have been sent to us and have been properly dealt with by us in preparing the report.
d) The Balance Sheet, the Statement of Profit and Loss and Cash Flow Statement referred to in this report are in agreement with the books of account and with the returns received from the branches not visited by us.
e) 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.
f) On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.
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 financial statements - Refer Note 19;
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
III. There was no amount which was required to be transferred to the Investor Education & Protection Fund by the Company during the year ended March 31,2016.
3. With respect to the adequacy of internal financial controls over financial reporting of the Company and operating effectiveness of such controls, refer to our separate report in "Annexure-2"
4. As required by C & AG of India through sub directions dated 22-01-2016, issued under Section 143 (5) of the Companies Act for the year2015-16, we give our report in the attached "Annexure-3"
We further report that:
1. In Respect of Its Fixed Assets
i. The Company has maintained proper records in respect of its fixed assets showing full particulars including quantitative details and situation of fixed asset.
ii. Based on the physical verification reports produced before us, in our opinion, the said assets have been physically verified by the management at reasonable intervals.
iii. Title Deeds of immoveable property are held in the name of the company except in the cases mentioned below:
Region/Office |
Asset Description |
Gross Value |
Remarks |
Corporate Office |
Land at Delhi |
13,16,521 |
Lease Agreement is in Joint Name with State Trading Corporation |
Corporate Office |
Office Building at Delhi |
3,26,37,459 |
Ownership Document not available |
Corporate Office |
Leasehold Land |
1,10,71,815 |
Ownership Document not available |
Bhubaneshwar |
Residential Building, Roads, Culverts & Electrical Installation |
1,16,32,036 |
Lease deed expired in 2011 |
2. In Respect of Its Inventory
i. As explained to us, the inventories have been physically verified during the year by the management.
ii. As In our opinion and according to the information and explanation given to us, no material discrepancies were noticed during the course of physical verification.
iii. In our opinion and according to the information and explanation given to us, the procedure of physical verification of inventories followed by the management needs to be strengthened in relation to the size of the MMTC Limited and the nature of its business.
3. Loans given to parties covered under section 189
The company has granted unsecured loan to one of its associate companies, M/s Neelachal Ispat Nigam
Limited.
i. In our opinion and according to the information and explanation given to us, terms and conditions on which loan has been granted is not pre-judicial to the interest of the company.
ii. According to the information and explanation given to us, there is no agreement entered with the company for granting loan, hence wear unable to comment upon.
iii. Since there is no agreement between the company and the borrower, we are unable to comment upon overdue amount. However, out of the total loan amount of Rs.9,282.90 Million as on 31st March 2016, Rs.
1,300.00 Million was due on 31 March 2016, still remains due.
4. Compliance of Provision of Section 185 and 186 of the Companies Act, 2013 in respect of loans,
guarantees and securities
According to the information and explanations given to us, and as per the records verified by us, the company has complied the provisions of Section 185 and 186.
5. Acceptance of Deposits
According to the information and explanations given to us, the company has not accepted deposits as per the directive issued by the Reserve Bank of India and the provision of Section 73 to 76 or any other relevant provision of the Act and the rules framed there under.
6. Maintenance of Cost Records
As explained to us, maintenance of cost records has not been prescribed by the Central Government for the company under Section 148(1) of the Act.
7. Undisputed & Disputed Statutory Dues
i. According to the information and explanations given to us and as per the records verified by us, the Company has been regular in depositing undisputed statutory dues including Income Tax, Provident Fund dues, Professional Tax, Value Added Tax and Service Tax with the appropriate authorities.
ii. There were no undisputed amount payable in respect of Income Tax, Provident Fund dues, Professional Tax, Value Added Tax and Service Tax and other statutory dues in arrear as at 31st March 2016 for more than six months from the date they became payable.
iii. In case if dues of Income Tax or sales tax or service tax or duty of custom or duty of excise or value tax or cess have not been deposited on account of any dispute are attached as Annexure A:
8. Loans from Banks/Financial Institutions/Government/Debentures
According to the information and explanations given to us and as per the records verified by us, the company has not defaulted in repayment of loans or borrowings to a financial institution, bank, Government or dues to debenture holders.
9. Proceeds of Public Issue (including debt instruments)/Term Loans
According to the information and explanations given to us and as per the records verified by us, the Company has not raised any money during the year through initial/further public offer (including debt instruments). Also, the Company has not availed any term loans during the current or earlier years.
10. Frauds on or by the Company
According to the information and explanations given to us and as per the records verified by us, carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the company or its officers, noticed or reported during the year, nor have we been informed of such case by the management.
11. Managerial Remuneration
According to the information and explanations given to us and as per the records verified by us, managerial remuneration has been paid/ provided for by the company during the year under review is within the purview of Section 197, read with Schedule V to the Act.
12. Nidhi Companies
The Company is not a Nidhi Company during the year under review and hence, the criteria as stipulated under Nidhi Rules 2014 are not applicable to the company.
13. Related Party Transactions
As per the information and explanations given during the course of our verification, in our opinion, all transactions with the related parties made by the company were in compliance with section 177 and 188 of the
Act, to the extent applicable to the company during the year, the relevant details in respect of which have been appropriately disclosed in the financial statements.
14. Preferential Issue
During the year, the company has not made any preferential allotment or private placement of equity shares or convertible debentures and hence the requirements of Section 42 of the Act are not applicable.
15. Non-Cash Transactions with Directorâs etc.
As per the informationâs and explanations provided to us, during the year, the Company has not entered into any non-cash transactions with directors or persons connected with the directors within the purview of section 192 of the Act are not applicable.
16. Provision of45-IAof the Reserve Bank of India Act,1934
According to the information and explanations given to us and as per the records verified by us, during the year, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934.
For O.P. Tulsyan & Company
Chartered Accountants
FRN: 500028N
Rakesh Agarwal
Date : 27.05.2016 Partner
Place : New Delhi Mem. No.: 081808
Mar 31, 2015
We have audited the accompanying standalone financial statements of
MMTC LIMITED ("the Company"), which comprise the Balance Sheet as at
March 31,2015, the Statement of Profit and Loss, the Cash Flow
Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information, in which are
incorporated the Returns for the year ended on that date audited by the
branch auditors of the Company's branches at Ahmedabad, Bhubaneshwar,
Mumbai, Goa, Bangalore, Hyderabad, Chennai, Vizag, Kolkata (including
MICA division, Abhraknagar), Jaipurand Delhi Regional Office, Corporate
Office, MIC Adivision audited by us.
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 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 of 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.
Auditors' 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.
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. 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.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, 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 March 31,2015, and its profit and its cash flows for the year ended
on that date.
Emphasis of Matter
(a) We draw attention to Note 9(i)& 21 to the standalone financial
statements in-respect of unsecured short term loan facility of INR
8669.90 million (P.Y. 6490.00 million)extended to Neelachal Ispat Nigam
Limited (NINL) an associate company. In view of continuous losses for
the last three years and in accordance with the analyst's report, NINL
requires robust infusion of fund / capital / raising of fresh term
loan.
(b) We draw attention to Note 7.5 to the standalone financial
statements in-respect of an amount of INR 3732.90 million which is due
for recovery from Govt, of India on account of subsidy against import
of edible oil imported into India for the State Governments from August
2012 onwards.
(c) We draw attention to Note 41 to the standalone financial statements
in-respect of Balances under Sundry Debtors/ Claims Recoverable / Loans
& Advances / Sundry Creditors / Other Liabilities which, in many cases
have not been confirmed and consequent reconciliation /adjustments if
any, required upon such confirmation are not ascertainable.
(d) The RMS software is not reflecting correct inventory of Sanchi
items due to the problems in the software.
(e) We draw attention to Note 22 to the standalone financial statements
in-respect of non-provision of liability, if any, in case of
non-extension of time/waiver/write off of GR-1 forms.
Our opinion is not modified in respect of this matter.
Other Matter
We did not audit the financial statements/information often branches
included in the standalone financial statements of the Company whose
financial statements / financial information reflect total assets of
INR 30922.02 million as at March 31, 2015 and total revenues of INR
105580.13million for the year ended on that date, as considered in the
standalone financial statements. The financial statements / information
of these branches have been audited by the branch auditors whose
reports have been furnished to us, and our opinion in so far as it
relates to the amounts and disclosures included in respect of these
branches, is based solely on the report of such branch auditors.
Our opinion is not modified in respect of this matter.
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, based on the comments in
the auditors' reports of the corporate office &branch auditors of the
company, we give in the "Annexure A" a statement on the matters
specified in paragraphs 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 and proper returns adequate for the purposes of our audit
have been received from the branches notvisited by us.
(c) The reports on the accounts of the branch offices of the Company
audited under Section 143 (8) of the Act by branch auditors have been
sent to us and have been properly dealt with by us in preparing this
report.
(d) 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 and with the returns received from the branches
notvisited by us.
(e) 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.
(f) On the basis of the written representations received from the
directors as on March 31, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act.
(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 financial statements - Refer Note 19 to the
standalone 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 were no amounts which were required to be transferred to
the Investor Education and Protection Fund by the Company.
3. As required by C&AG of India through sub-directions dated March 23,
2015 issued under Section 143(5) of the Act, we give our report in the
attached "Annexure B".
(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory
Requirements' section of our report of even date)
i. In respect of its fixed assets:
a. The MMTC Ltd. has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b. The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification
which, in our opinion, provides for physical verification of all the
fixed assets at reasonable intervals.
ii. In respect of its inventories:
(a) As explained to us, the inventories were physically verified during
the year by the Management.
(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 needs to be strengthened in relation to the
size of the MMTC Limited and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and material discrepancies were noticed on physical
verification.
iii. Company has granted unsecured loan to company covered in the
Register maintained under Section 189 of the Companies Act, 2013.
iv. In ouropinion according to the information/explanations given to
us, receipt of the principle amount and interest are not regular.
v. In our opinion according to the information/explanations given to
us, The overdue amount is more than INR
0.1 million. Company has taken the reasonable steps to recover the
amount.
vi. 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, for the
purchase of inventory and fixed assets and for the sale of goods and
services. As regards the purchases and sale of goods, inventories and
stocks that are dealt with by the company including domestic bullion
transactions it needs further strengthening in such a manner so as to
avoid delay in updation in ERP system vis-a-vis actual date of
transaction and similarly, manual generation of invoices could be
avoided.
Further, the internal control mechanism needs to be strengthened,
besides the areas mention hereinbefore, in the following areas:
a. Periodic quantitate reconciliation of goods traded by the company
(particularly bullion/retail trade) between the ERP and other
standalone inventory system (RMS).
b. Risk assessment and Risk Management requires to be constantly
reviewed/strengthened/revamped in the light of changing needs of the
business whenever considered necessary as it was noticed that due to
certain acts of omissions and commissions, company had to make heavy
provisions against debtors/ recoverable/losses.
c. Periodic reconciliation in-respect of sales and purchase,
input/output VAT as per financial records vis-a-vis sales, purchases.
Input/output VAT as per VATreturns.
vii. According to the information and explanations given to us, Company
has not accepted the deposits under directives issued by Reserve Bank
of India and the provisions of Section 73 to 76 or any other relevant
provisions of the companies act.
viii. The Government of India has not prescribed the maintenance of
cost records under Sub section (1) of Section 148 of the Companies Act
2013.
ix. According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory
dues, including Provident Fund, Investor Education and Protection Fund,
Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service
Tax, Customs Duty, Excise Duty, Value added Tax, Cess and other
material statutory dues applicable to it with the appropriate
authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Investor Education and Protection Fund, Employees' State
Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs
Duty, Excise Duty, Cess and other material statutory dues in arrears as
at 31 March, 2015 for a period of more than six months from the date
they became payable.
(c) In case of dues of Income Tax or Sales Tax or Wealth Tax or Service
Tax or Duty of Custom or duty of Excise or Value added Tax or Cess have
not been deposited on account of any dispute, then the amounts involved
and a forum where is pending shall be mentioned:
According to the records of the company dues of Income Tax, Sales Tax,
Custom Duty, Excise Duty and Cess which have not been deposited on
account of disputes are stated below:
CHENNAI REGIONAL OFFICE
Name of the Statue Nature of the
dues Amount Period Forum of Dispute
(In Rs.)
TNGSTACT Sales Tax,
Penalty & 8,63,114 1998-99 Madras High Court
Interest
TNGSTACT Sales Tax,
Penalty & 4,43,416 2000-01 Sales Tax Appeals
Interest Tribunal
TNGSTACT Sales Tax,
Penalty & 11,52,785 1999-
2000 Madras High Court
Interest
TNGSTACT Sales Tax,
Penalty & 1,78,566 2001-02 Asst.
Commissioner
Interest (Comm.
Tax),Chennai
TN VAT Act VAT &
Penalty 3,55,08,765 2008-09 Joint
Commissioner of
Comercial
Taxes Appeals
MUMBAI REGIONAL OFFICE
Name of the
Statue Nature of the
dues Amount (In Period Forum of Dispute
Rs.)
BST ACT Sales Tax 3,08,644 1986-87 Joint Comm. of
Sales Tax
BST ACT Sales Tax 14,96,06,778 1989-90 Joint Comm. of
Sales Tax
BST ACT Sales Tax 23,30,46,478 1990-91 Joint Comm. of
Sales Tax
BST ACT Sales Tax 28,98,738 1991-92 Joint Comm. of
Sales Tax
BST ACT Sales Tax 45,03,961 2001-02 Joint Comm. of
Sales Tax
BST ACT Sales Tax 1,42,13,373 2008-09 Joint Comm. of
Sales Tax
BST ACT Sales Tax 51,81,978 2008-09 Joint Comm. of
Sales Tax
Name of the
Statue Nature of the Amount (In Period Forum of Dispute
dues Rs.)
APGST Sales Tax 1,49,770 1989-90 STAT
APGST Sales Tax 29,61,551 1990-91 STAT, Vizag
APGST Sales Tax 24,02,576 1991-92 STAT, Vizag
APGST Sales Tax 13,96,269 1992-93 STAT, Vizag
APGST Sales Tax 17,62,687 1992-93 STAT, Vizag
APGST Sales Tax 6,30,615 1993-94 STAT, Vizag
CST Central Sales
Tax 4,41,446 1993-94 ADC(CT)
CST Central Sales
Tax 2,04,481 1994-95 AC(LTU)
CST Central Sales
Tax 5,97,266 1995-96 ADC(CT)
APGST Sales Tax 38,03,875 1995-96 STAT, Vizag
APGST Sales Tax 28,80,309 1995-96 STAT, Vizag
CST Central Sales
Tax 21,34,306 1996-97 STAT, Vizag
APGST Sales Tax 58,43,100 1997-98 STAT, Vizag
CST Central Sale
Tax 6,35,504 1997-98 ADC(CT)
APGST Sales Tax 55,65,147 1998-99 STAT, Vizag
APGST Sales Tax 39,04,454 1999-
2000 STAT, Vizag
APGST Sales Tax 2,52,926 2000-
2001 STAT, Vizag
APGST Sales Tax 2,12,176 2001-02 AC(LTU)
APGST Sales Tax 68,901 2002-03 AC(LTU)
APGST Sales Tax 34,856 2003-04 AC(LTU)
APGST Sales Tax 1,26,000 2004-05 AC(LTU)
VAT VAT 6,76,058 2006-07 STAT
VAT VAT 71,000 2007-08 AC(LTU)
VAT VAT 5,00,000 2008-09 STAT, Vizag
VAT VAT 11,90,100 2008-09 STAT, Vizag
Central
Excise &
Customs Custom Duty 24,10,79,065 2008-09 Comm. of
Customs & Excise
BHUBANESHWAR REGIONAL OFFICE
Name of the Statue Nature of the dues Amount (In Rs.)
Orissa Sales Tax Interest Penalty 26,50,388
Orissa Sales Tax Odisha Sales Tax 34,00,919
Orissa Sales Tax Odisha Sales Tax 1,70,046
Orissa Sales Tax Interest Penalty 6,53,452
Orissa Sales Tax Central Sales Tax 34,83,020
Orissa Sales Tax Interest 3,57,42,030
Orissa Sales Tax DEPB 14,98,22,308
Orissa Sales Tax DEPB 5,08,43,080
OVAT 2009-10 & 2010-11 14,28,18,841
CST(ODISHA) 2009-10 & 2010-11 58,07,05,822
ET(ODISHA) 2009-10 & 2010-11 52,63,10,091
Central Excise Act Service Tax 4,17,04,374
Central Excise Act Service Tax 15,55,24,520
Central Excise Act Service Tax 3,55,84,190
Central Excise Act Service Tax 7,60,64,279
Central Excise Act Service Tax 3,75,81,878
Central Excise Act Service Tax 3,59,43,529
Central Excise Act Service Tax 28,49,57,172
Central Excise Act Service Tax 65,20,157
Central Excise Act Service Tax 31,27,912
Central Excise Act Service Tax 3,44,69,468
Name of the Statue Period Forum of Dispute
Orissa Sales Act 1978-79 High Court of Orissa
Orissa Sales Act 1978-79 - do -
Orissa Sales Act 1978-79 - do -
Orissa Sales Act 1979-80 - do -
Orissa Sales Act 1982-83 - do -
Orissa Sales Tax 1978-79 - do -
Orissa Sales Tax 2006-09 Addl. Commissioner of Sales
Tax, Odisha
Orissa Sales Tax 2010-12 Addl. Commissioner of Sales
Tax, Odisha
OVAT 2013-14 Addl. Commissioner of Sales
Tax, Odisha
CST(ODISHA) 2013-14 Addl. Commissioner of Sales
Tax, Odisha
ET(ODISHA) 2013-14 Addl. Commissioner of Sales
Tax, Odisha
Central Excise Act 2003-05 Customs, Excise & Service
Tax Appellate Tribunal
Central Excise Act 2003-07 Customs, Excise & Service
Tax Appellate Tribunal
Central Excise Act 2007-08 Customs, Excise & Service
Tax Appellate Tribunal
Central Excise Act 2008-10 Customs, Excise & Service
Tax Appellate Tribunal
Central Excise Act 2010-11 Comm., Customs excise &
service tax. Bhubaneswar
Central Excise Act 2011-12 Comm., Customs excise &
service tax. Bhubaneswar
Central Excise Act 2009-12 Comm., Customs excise &
service tax. Bhubaneswar
Central Excise Act 2009-11 Comm., Customs excise &
service tax. Bhubaneswar
Central Excise Act 2012-13 Comm., Customs excise &
service tax. Bhubaneswar
Central Excise Act 2012-13 Comm., Customs excise &
service tax. Bhubaneswar
JAIPUR REGIONAL OFFICE
Name of the Nature of Amount (In Rs.)
Statue the dues
R.S.TACT Sales Tax 1,49,46,540/-
R.S.TACT Sales Tax 26,07,605/-
RAJ VAT ACT VAT 3,26,47,269/-
CST ACT CST 59,92,494/-
R.S.T ACT VAT 18,01,941/-
ST Turnover Tax 5,32,992/-
Name of the Statue Period Forum of Dispute
R.S.T ACT 2003-04 Rajasthan Kar Board, Ajmer
Rs. 35,49,446/- has been deposited
under protest. Sales Tax Dept has
appealed against the order of
DC(Appeals) in Kar Board
R.S.T ACT 1999-00 Rajasthan Kar Board, Ajmer Pending
with Kar Board against demand on
account of 4767 MT DAP u/s 84 of RST Act
RAJ VAT ACT 2010-11 Against the Appeal of Sales Tax Deptt.,
Rajasthan Kar Board decided in favour of
MMTC Limited.
CST ACT 2010-11 Against the Appeal of Sales Tax Deptt.,
Rajasthan Kar Board decided in favour of
MMTC Limited.
R.S.T ACT 2010-11 Required documents have been submitted
in Sales Tax Dept. Rectification
pending with A.O.
ST 2003-04 High Court
Sales Tax Dept has filed an appeal in
High Court against Kar Board order.
Total amount deposited under protest- Rs 35,49,446.00
VIZAG REGIONAL OFFICE
Name of the
Statue Nature of the
dues Amount (In Rs.) Period Forum of Dispute
A.P.G.S.TACT Sales Tax 18,56,325 1968-69 STAT, HYP.
A.P.G.S.TACT Sales Tax 26,39,647 1981-82 ADC, Vizag
A.P.G.S.TACT Sales Tax 6,88,552 1982-83 ADC, Vizag
A.P.G.S.TACT Sales Tax 17,66,784 1983-84 ADC, Vizag
A.P.G.S.TACT Sales Tax 30,00,436 1984-85 ADC, Vizag
A.P.G.S.TACT Sales Tax 25,05,806 1985-86 STAT,Vizag
A.P.G.S.TACT Sales Tax 2,70,83,841 1986-87 STAT, Vizag
A.P.G.S.TACT Sales Tax 36,45,076 1987-88 ADC
A.P.G.S.TACT Sales Tax 19,34,139 1991-92 AC LTU
A.P.G.S.TACT Sales Tax 4,79,000 1989-90 STAT
CST Sales Tax 8,41,695 1994-95 AC LTU
CST Sales Tax 48,62,340 1995-96 STAT, Hyderabad
CST Sales Tax 33,58,889 1996-97 STAT, Hyderabad
A.P.G.S.TACT Sales Tax 25,27,960 1997-98 STAT, Hyderabad
CST Sales Tax 104,614 2007-08 ADC
Central
Excise &
Customs Service Tax 12,65,26,554 2003 -06 STAT, Bangalore
KOLKATA REGIONAL OFFICE
Name of the
Statue Nature of
the dues Amount Period Forum of Dispute
(In Rs.)
CST ACT 1956 Central Sales Tax 11,30,858 2005-06 Appellate Board
CST ACT 1956 Central Sales Tax 77,60,971 2006-07 D C Appeal
CORPORATE OFFICE
Name of the Nature of the
Dues Amount (Rs.) AY Forum of Dispute
Statue
Income Tax Act Income Tax 5,61,821 1993-94 AO
Income Tax Act Income Tax 54,81,338 1996-97 CIT(A)/ITAT
Income Tax Act Income Tax 1,02,93,042 1993-94 AO
Income Tax Act Income Tax 2,60,66,476 1999-00 ITAT
Income Tax Act Income Tax 1,84,63,021 2000-01 ITAT
Income Tax Act Income Tax 1,17,65,008 2001-02 CIT(A)/ITAT/
HIGH Court
Income Tax Act Income Tax 73,04,915 2002-03 ITAT
Income Tax Act Income Tax 11,16,907 2003-04 AO
Income Tax Act Income Tax 4,19,85,746 2004-05 ITAT
Income Tax Act Income Tax 6,94,85,393 2005-06 AO
Income Tax Act Income Tax 73,50,191 2007-08 CIT(A)/ITAT
Income Tax Act Income Tax 2,79,66,209 2008-09 AO
Income Tax Act Income Tax 10,64,92,947 2009-10 CIT(A)
Income Tax Act Income Tax 3,93,72,128 2010-11 CIT(A)
Income Tax Act Income Tax 10,17,50,890 2011-12 CIT(A)
Amount Deposited in respect of the Income Tax cases = 37,37,05,142/-
DELHI REGIONAL OFFICE
Name of Statute Nature of Dues Amount (inRs.)
Delhi VAT CST/LST/lnterest/Penalty 3745290
(Gold - Commemorative
Medallions)
Delhi VAT LST 1165303
Delhi VAT LST/CST 65732207
Delhi VAT LST/CST 43186549
Delhi VAT LST/CST 40296672
Delhi VAT LST 6187340
Delhi VAT LST 2223198
UP-VAT LST/CST 617588
UP-VAT LST 470578
UP-VAT LST 264037
UP-VAT LST 195000
UP-VAT LST 185100
UP-VAT LST 1635160
UP-VAT VAT 921383
UP-VAT VAT 1223616
UP-VAT VAT lnterestfor Non - 249828
submission of Form-3B (Gold) &
Non-submission of Form3Cl
(Mentha Oil)
Haryana VAT LST 424587
MP-VAT LST 150004
MP-VAT LST 4730692
Custom &
Central Customs Duty & Interest on 27267919
Excise non-export of Gold
Jewellery against Gold Loan
by Associates
Custom & Central Custom Duty 20000000
Excise
Custom & Central Custom Duty 15050000
Excise
Custom & Central Custom Duty 6180000
Excise
Custom & Central Custom Duty 6180000
Excise
Custom & Central Excise Duty/ 1820878
Excise Interest/Penalty
Custom & Central Excise Duty/ 191353780
Excise Interest/Penalty
Name of Statute Period to which Forum where dispute is
the amount pending
relates
Delhi VAT 2002-03 Commissioner, DVAT
Delhi VAT 1984-85 D.C. Appeal
Delhi VAT 1986-87 Additional Commissioner
Delhi VAT 1987-88 Additional Commissioner
Delhi VAT 1988-89 Additional Commissioner
Delhi VAT 1989-90 Additional Commissioner
Delhi VAT 1990-91 Additional Commissioner
UP-VAT 1990-91 Moradabad, Allahabad High
Court
UP-VAT 1991-92 Moradabad, Allahabad High
Court
UP-VAT 1992-93 Moradabad, Allahabad High
Court
UP-VAT 1994-95 Sales Tax Authorities,
Moradabad
UP-VAT 1993-94 Moradabad, Allahabad High
Court
UP-VAT 1987-88 Kanpur, Joint Commissioner
UP-VAT 1993-94 Commissioner, UP-VAT
UP-VAT 1996-97 Commissioner, UP-VAT
UP-VAT 2007-08 Commissioner, UP-VAT
Haryana VAT 1992-93 Faridabad, Punjab &
Haryana High Court
Chandigarh
MP-VAT 1999-00 Sales Tax Authority, Indore
MP-VAT 1998-99 Assessing Authority, Indore
Custom & Central
Excise 1999-2000 Pending before Hon'ble Delhi
High Court as per directions
of Hon'ble Supreme Court of
India
Custom & Central
Excise 2006-07 Dy. Commissioner of Customs,
Custom & Central
Excise 2007-08 Dy. Commissioner of Customs,
Custom & Central
Excise 2008-09 Dy. Commissioner of Customs,
Custom & Central
Excise 2009-10 Dy. Commissioner of Customs,
Custom & Central
Excise 2010-11 Commissioner of Central
Excise,
Custom & Central
Excise 2011-12 Commissioner of Central
Excise
An amount of INR 84.83 Lacs has been deposited.
(d) As per information/ explanations given to us no amount required to
be transfer to Investor Education & Protection Fund accordance with the
relevant provisions of the Companies act 1956.
x. The Financial Statements of the Company as at March 31, 2015 do not
show any accumulated losses. The company has not incurred any cash
losses during the financial year covered by our audit and in the
immediately preceding financial year and company has not incurred any
cash losses during the financial year and immediately preceding
financial year.
xi. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
financial institutions, banks and debenture holders.
xii. According to the information and explanations given to us, the
Company has not given any guarantees for loans taken by others from
banks and financial institutions which is prejudicial to the interest
of the company.
xiii. In our opinion and according to the information and explanations
given to us, the Company has not taken any term loans during the year.
xiv. During the course of our examination of the books and records of
the Company, carried out in accordance with generally accepted auditing
practices in India, and according to the information and explanation
given to us there are no fraud on/or by the company has been noticed or
reported during the year.
For JAIN KAPILA ASSOCIATES
Chartered Accountants
(Firm Registration No. 000287N)
Place: New Delhi
Date: May 21, 2015
D.K. Kapila
Partner
M. No. 016905
Mar 31, 2014
We have audited the accompanying financial statements of MMTC LIMITED
("the Company"), which comprise the Balance Sheet as at 31st March,
2014, the Statement of Profit and Loss and the Cash Flow Statement for
the year then ended, annexed thereto in which are incorporated the
accounts of Corporate Office, MICA division, Delhi Regional Office and
Sub-regional Offices which are under Delhi Regional Office audited by
us and the other Regional Offices and Sub-regional Offices audited by
other Independent Auditors and a summary of the 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 that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956 ("the Act") and in accordance with the accounting
principles generally accepted in India. This responsibility includes
the design, implementation and maintenance of internal control 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.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. 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 control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company''s internal control. An audit also includes
evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Management, 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 qualified audit opinion.
Basis for Qualified Opinion
(a) Company has not followed its policy regarding writing off of debts
/ advances / claims as there are various debts / advances / claims
which are outstanding for a long period and where company itself has
made 100% provision against these debts / advances / claims considering
the uncertainty of realization / unrealisability of these debts /
advances / claims. Consequential effect of the same is not
ascertainable.
(b) Our observation in-respect of the inadequacies in the internal
control systems, as stated in para (iv) of Annexure to the main audit
report, which may have consequential effect on the accounts for the
year. (Effect not ascertainable)
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 matter
described in the Basis for Qualified Opinion paragraph, the aforesaid
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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 March, 2014;
(b) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Emphasis of Matter
(a) Subsequent to the default in payment obligation of National Spot
Exchange Limited (NSEL) and consequential filing of legal suit in
Mumbai High Court against NSEL and others and filing of criminal
complaint with Economic Offences Wing (EOW), Delhi Police which has
since been transferred to CBI Mumbai, company has made provision of INR
2104.42 million (P.Y. Nil) against total recoverable amount of INR
2106.38 million as on 31 March, 2014 after adjusting INR 1.96 million
realized upto 15 May, 2014. [Refer note no. 17 (Mi)]
(b) The company provides benefit in respect of post retirement medical
benefit (PRMB) to its employees. The Actuarial liability for the
financial year 2013-14 aggregating to INR 1368.32 million has been
provided for [Refer to Note No. 23(g)]. The company has neither
earmarked its investment nor has created any corpus for this purpose.
(c) Balances under Sundry Debtors / Claims Recoverable / Loans &
Advances / Sundry Creditors / Other Liabilities in many cases have not
been confirmed and consequent reconciliation / adjustments, if any,
required upon such confirmation are not ascertainable. (Refer note no.
35)
(d) The RMS software is not reflecting correct inventory of Sanchi
items due to the problems in the package in some regional offices.
Manual record of inventory of Sanchi items is also not maintained.
(e) Non-provision of liability, if any, in case of extension of time /
waiver / write off of GR-1 forms. (Refer note no. 21)
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 in terms of Section 227(4A) of
the Act, we give in the Annexure a statement on the matters specified
in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, 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) Except for the effects of the matter described in the Basis for
Qualified Opinion paragraph, 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 [and proper returns adequate for the
purposes of our audit have been received from the branches not visited
by us].
(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 for the effects of the matter described in the Basis for
Qualified Opinion paragraph, in our opinion, the Balance Sheet, the
Statement of Profit and Loss and the Cash Flow Statement comply with
the Accounting Standards referred to in Section 211(3C) of the Act.
(e) In terms of Notification No. GSR 829 (E) dated 21.10.2003 issued by
the Department of the Company Affairs, Government of India, the
provision of Section 274(l)(g) of the Companies Act, 1956, are not
applicable to the Company.
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT (Referred to in paragraph
1 under ''Report on Other Legal and Regulatory Requirements'' section of
our report of even date)
i. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b. The fixed assets are being physically verified by the Management in
accordance with a regular programme at certain locations only whereas
in our opinion, it provides for physical verification of all the fixed
assets at all locations at reasonable intervals. According to the
information and explanation given to us, no material discrepancies were
noticed on such verification at locations where physical verification
was held.
c. The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
ii. In respect of its inventories:
(a) As explained to us, the inventories were physically verified during
the year by the Management.
(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 needs to be strengthened in relation to the
size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, subject to our observation mentioned in Emphasis of Matter
(d) in the audit report, the Company has maintained proper records of
its inventories and no material discrepancies were noticed on physical
verification.
iii. The Company has neither granted nor taken any loans, secured or
unsecured, to/from companies, firms or other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956.
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 for the
purchase of fixed assets. As regards the purchases and sales of goods,
inventories and stocks that are dealt with by the Company including
domestic bullion transactions it needs further strengthening in such a
manner so as to avoid delay in updation in ERP system vis-a-vis actual
date of transaction and similarly, manual generation of invoices could
be avoided.
Further, the internal control mechanism needs to be strengthened,
besides the areas mentioned hereinbefore, in the following areas:
(a) Periodic quantitative reconciliation of goods traded by the company
(particularly bullion/retail trade) between the ERP and other
standalone inventory system (RMS).
(b) Risk assessment and Risk management needs to be strengthened /
revamped further as it is noticed that due to certain acts of omission
and commission, company had to make heavy provisions against debtors /
recoverable / losses.
(c) Periodic reconciliation in-respect of sales and purchases, input /
output VAT as per financial records vis-a-vis sales, purchases, input /
output VAT as per VAT returns.
v. There were no transactions that needed to be entered into the
Register maintained in pursuance of Section 301 of the Companies Act,
1956 during the year under audit.
vi. According to the information and explanations given to us, the
Company has not accepted any deposit from the public during the year.
In respect of unclaimed deposits, the Company has complied with the
provisions of Sections 58A, 58AA or any other relevant provisions of
the Companies Act, 1956.
vii. The company has of late brought out a detailed internal audit
manual and has initiated steps to strengthen the internal audit system.
However, in our opinion, the internal audit functions carried out by
external Internal Auditors and Internal Audit Department needs further
improvement in terms of quality and scope so as to make it fully
commensurate with the size and the nature of its business.
viii. The Government of India has not prescribed the maintenance of
cost records under Section 209(l)(d) of the Act for any of the services
rendered by the Company.
ix. According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory
dues, including Provident Fund, Investor Education and Protection Fund,
Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service
Tax, Customs Duty, Excise Duty, Cess and other material statutory dues
applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Investor Education and Protection Fund, Employees'' State
Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs
Duty, Excise Duty, Cess and other material statutory dues in arrears as
at 31 March, 2014 for a period of more than six months from the date
they became payable.
(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty and Cess which have not been deposited as on
31 March, 2014 on account of disputes are referred to in Annexure W
x. The Financial Statements of the Company as at 31 March, 2014 do not
show any accumulated losses. The Company has not incurred any cash
losses during the financial year covered by our audit and in the
immediately preceding financial year.
xi. According to the records of the Company examined by us and as per
the information and explanations given to us, the Company has not
defaulted in the repayment of dues to financial institutions, banks and
debenture holders.
xii. According to the information and explanations given to us, the
company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities; except
certain loans to employees who have been granted on the basis of
security of house and vehicles and in this regard proper documents &
records are maintained. In respect of loans to its employees other than
those as stated already, are granted without any security.
xiii. In our opinion the Company is not a chit fund / nidhi / mutual
benefit fund / society. Therefore, the provision of clause No. 4(xiii)
of the Companies (Auditor''s Report) Order 2003 (as amended) is not
applicable to the Company.
xiv. In our opinion, the Company is not dealing or trading in shares,
securities, debenture and other investments. Accordingly, the provision
of clause No. 4(xiv) of the Companies (Auditor''s Report) Order 2003 (as
amended) is not applicable to the Company.
xv. In our opinion and according to the information and explanations
given to us the terms & conditions of the guarantee given by the
Company for loans taken by Neelachal Ispat Nigam limited (an associate
company) from banks or financial institutions are not prima facie
pre-judicial to the interest of the Company.
xvi. According to the information and explanations given to us, the
Company has not taken any term loans during the year. Hence, the
provision of clause No. 4(xvi) of the Companies (Auditor''s Report)
Order 2003 (as amended) is not applicable to the Company.
xvii. According to the information and explanations given to us and
upon overall examination of the Balance Sheet of the Company, we report
that funds raised on short-term basis have, prima facie, not been used
during the year for long-term investment.
xviii. According to the information and explanation given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the Register maintained under Section 301 of
the Companies Act, 1956.
xix. According to the information and explanation given to us, during
the year covered by our audit report, the Company has not issued any
debentures during the year and hence, the provision of clause No.
4(xix) of the Companies (Auditor''s Report) Order 2003 (as amended) is
not applicable to the Company.
xx. The Company has not raised any money by way of Public Issue during
the year; therefore, the provision of clause No. 4(xx) of the Companies
(Auditor''s Report) Order 2003 (as amended) is not applicable to the
Company.
xxi. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanation given to us, we have come across following instance of
material fraud on the Company during the year, as reported by the
Management:-
National Spot Exchange Limited (NSEL) has defaulted in its payment
obligations amounting to INR 2104.42 million which were paid by the
company for trade done through NSEL against which goods were neither in
the custody of NSEL nor available with the seller / borrower. The
company has filed legal suit in Mumbai High Court against NSEL and
others and has also filed criminal complaint with Economic Offences
Wing (EOW), Delhi Police which has since been transferred to CBI Mumbai
and the matter is under further investigation.
For JAIN KAPILA ASSOCIATES
Chartered Accountants
(ICAI Registration No. 000287N)
Place: New Delhi D.K. Kapila
Partner
Date : 29.05.2014 (Membership No. 16905)
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of MMTC LIMITED
("the Company"), which comprise the Balance Sheet as at 31 March, 2013,
the Statement of Profit and Loss and the Cash Flow Statement for the
year then ended, annexed thereto in which are incorporated the accounts
of Corporate Office, MICA division, Jhandewalan Regional Office and
Sub-regional Offices which are under Jhandewalan Regional Office
audited by us and the other Regional Offices and Sub-regional Offices
audited by other Independent Auditors and a summary of the 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 that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956 ("the Act") and in accordance with the accounting
principles generally accepted in India. This responsibility includes
the design, implementation and maintenance of internal control 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.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. 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 control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company''s internal control. An audit also includes
evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Management, 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 qualified audit opinion.
Basis for Qualified Opinion
Our observation in-respect of the inadequacies in the internal control
systems, as stated in para (iv) of Annexure to the main audit report,
which may have consequential effect on the accounts for the year.
(Effect not ascertainable)
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 matter
described in the Basis for Qualified Opinion paragraph, the aforesaid
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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 March, 2013;
(b) in the case of the Statement of Profit and Loss, of the loss of the
Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Emphasis of Matter
(a) It is observed that due to recording of many incorrect /
unexplained accounting entries deliberately recorded in the books at
Regional Office Hyderabad with a view to suppress the actual sundry
debtors recoverable from party / group the Management has directed a
special audit to ascertain the amount actually recoverable. Based on
itsreport a provision of INR 2288.20 million (P.Y.INRNILmillion) has
been made on account of un-recoverability of the amount from the said
sundry debtor. [Refer note no. 17(ii)]
(b) Subsequent to the submission of the final report of special audit a
further provision of INR 155.44 million (P.Y. INR1002.50 million) is
made on account of certain acts of commission & omission pertaining to
recoverable from debtors at Regional Office Chennai. [Refer note no.
17(i)]
(c) Balances under Sundry Debtors / Claims Recoverable / Loans &
Advances / Sundry Creditors / Other Liabilities in many cases have not
been confirmed and consequentreconciliation / adjustments if any,
required upon such confirmation are not ascertainable. (Refer note no.
39)
(d) The RMS software is not reflecting correct inventory of Sanchi
items due to the problems in the package. Manual record of inventory of
Sanchi items is also not maintained.
(e) Non-provision of liability, if any, in case of extension of time /
waiver / write off of GR-1 forms. (Refer note no. 23)
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 in terms of Section 227(4A) of
the Act, we give in the Annexure a statement on the matters specified
in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, 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) Except for the effects of the matter described in the Basis for
Qualified Opinion paragraph, 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 [and proper returns adequate for the
purposes of our audit have been received from the branches not visited
by us].
(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 for the effects of the matter described in the Basis for
Qualified Opinion paragraph, in our opinion, the Balance Sheet, the
Statement of Profit and Loss and the Cash Flow Statement comply with
the Accounting Standards referred to in Section 211(3C) of the Act.
(e) On the basis of the written representations received from the
directors as on 31March, 2013 taken on record by the Board of
Directors, none of the directors is disqualified as on 31March, 2013
from being appointed as a director in terms of Section 274(1)(g) of the
Act.
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory
Requirements'' section of our report of even date)
i. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars,
including quantitative details and situationof fixed assets.
b. The fixed assets were physically verified during the previous year
by the Management in accordance with a regular programme of
verification which, in our opinion, provides for physical verification
of all the fixed assets at reasonable intervals. According to the
information and explanation given to us, no material discrepancies were
noticed on such verification.
c. The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
ii. In respect of its inventories:
(a) As explained to us, the inventories were physically verified during
the year by the Management.
(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 needs to be strengthen in relation to the
size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, subject to our observation mentioned in Emphasis of
Matter(d)in the audit report,the Company has maintained proper records
of its inventories and no material discrepancies were noticed on
physical verification.
iii. The Company has neither granted nor taken any loans, secured or
unsecured, to/from companies, firms or other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956.
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 the Company and the nature of its business for the
purchase of fixed assets. As regards the purchases and sales of goods
and stocks that are dealt with by the Company needs to be strengthened
further as it is noticed that due to delay/absence in price fixing with
the foreign supplier, the purchases and the further stock transferred
remains unrecorded in the books.
Further, the internal control mechanism needs to be strengthened,
besides the areas mentioned hereinbefore, in the following areas:
(a) Periodic quantitative reconciliation of goods traded by the company
(particularly bullion/retail trade) between the ERP and other
standalone inventory system (RMS).
(b) Risk management particularly at foreign exchange exposure and its
subsequent documentation / record keeping and also time-to- time
monitoring of the risk to the Company.
(c) The books of accounts at Regional Office Hyderabad contain many
incorrect / unexplained accounting entries deliberately recorded to
suppress sundry debtors recoverable from a particular party / group
during the financial years 2011-12 & 2012-13.
(d) Wherever claims / recoveries on account of subsidy allowable /
allowed by the Central / State Government in-respect of agro products
imported at its behest and follow-up of old debts,advances, claims,
court cases by respective commodity division.
(e) As the prevalent/existing ERP system being quite old and obsolete
and the same being not audit and Internal control friendly needs to be
revamped in the light of the complexities in the bullion business,
changing reporting requirements and concept of maker / checker to be
rigorously enforced. However the Company has initiated steps to replace
the existing ERP system.
(f) Entries are not passed in the accounts / stock records signifying
the obtaining of jewelry against the bullion given & vice-versa for the
purpose of exhibition / normal trade.
(g) Differences and lack of reconciliation in-respect of sales and
purchases, input / output VAT as per financial records vis-a-vis sales,
purchases, input / output VAT.
(h) Accounting entries in-respect of High Sea Sale should be as per the
respective sale agreement with the respective customers.
v. There were no transactions that needed to be entered into the
Register maintained in pursuance of Section 301 of the Companies Act,
1956 during the year under audit.
vi. According to the information and explanations given to us, the
Company has not accepted any deposit from the public during the year.
In respect of unclaimed deposits, the Company has complied with the
provisions of Sections 58A, 58AA or any other relevant provisions of
the Companies Act, 1956.
vii. In our opinion, the internal audit functions carried out by the
management needs to be well structured, more exhaustive & extensive
both in terms of scope & periodicity; the exercise carried out by
external Internal Auditor''s/ Internal Audit Departmentis not
commensurate with the existing programme of the Company and the nature
of its business. The same is noted to be very inadequate at Regional
Office Hyderabad & Regional Office Chennai in particular. However,
management has initiated the steps to strengthen internal audit system.
viii. The Government of India has not prescribed the maintenance of
cost records under Section 209(1)(d) of the Act for any of the services
rendered by the Company.
ix. According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory
dues, including Provident Fund, Investor Education and Protection Fund,
Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service
Tax,Customs Duty, Excise Duty, Cess and other material statutory dues
applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Investor Education and Protection Fund, Employees'' State
Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax,Customs Duty,
Excise Duty, Cess and other material statutory dues in arrears as at 31
March, 2013 for a period of more than six months from the date they
became payable.
(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty and Cess which have not been deposited as on
31 March, 2013 on account of disputes are referred to in Annexure ''A''
x. The Financial Statements of the Company as at 31 March, 2013 do not
show any accumulated losses. Though the Company has reported an overall
loss for INR 706.24 million which is on account of fraud perpetrated
against the Company; the Company has not incurred any cash losses
during the financial year covered by our audit and in the immediately
preceding financial year.
xi. According to the records of the Company examined by us and as per
the information and explanations given to us,the Company has not
defaulted in the repayment of dues to financial institutions, banks and
debenture holders.
xii. According to the information and explanations given to us,the
company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities; except
certain loans to employees who have been granted on the basis of
security of house and vehicles and in this regard proper documents &
records are maintained. In respect of loans to its employees other than
those as stated already, are granted without any security.
xiii. In our opinion the Company is not a chit fund/nidhi/mutual
benefit fund/society. Therefore, the provision of clause No. 4(xiii)
of the Companies (Auditor''s Report) Order 2003 (as amended) is not
applicable to the Company.
xiv. In our opinion, the Company is not dealing or trading in shares,
securities, debenture and other investments. Accordingly, the provision
of clause No. 4(xiv) of the Companies (Auditor''s Report) Order 2003 (as
amended) is not applicable to the Company.
xv. In our opinion and according to the information and explanations
given to us the terms & conditions of the guarantee given by the
Company for loans taken by NeelanchalIspat Nigam limited (an associate
company) from banks or financial institutions are not prima facie
pre-judicial to the interest of the Company.
xvi. According to the information and explanations given to us,the
Company has not taken any term loans during the year. Hence, the
provision of clause No. 4(xvi) of the Companies (Auditor''s Report)
Order 2003 (as amended) is not applicable to the Company.
xvii. According to the information and explanations given to us and
upon overall examination of the Balance Sheet of the Company, we report
that funds raised on short-term basis have, prima facie, not been used
during the year for long-term investment.
xviii. According to the information and explanation given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the Register maintained under Section 301 of
the Companies Act, 1956.
xix. According to the information and explanation given to us, during
the year covered by our audit report, the Company has not issued any
debentures during the year and hence, the provision of clause No.
4(xix) of the Companies (Auditor''s Report) Order 2003 (as amended) is
not applicable to the Company.
xx. The Company has not raised any money by way of Public Issue during
the year; therefore, the provision of clause No. 4(xx) of the Companies
(Auditor''s Report) Order 2003 (as amended) is not applicable to the
Company.
xxi. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanation given to us,we have come across following instances of
material fraud on the Company during the year, as reported by the
Management:-
(a) Regional Office, Hyderabad
The books of accounts at Regional Office Hyderabad contain many
incorrect / unexplained accounting entries deliberately recorded to
suppress sundry debtors recoverable from a particular party / group
during the financial years 2011-12 & 2012-13.
For JAIN KAPILA ASSOCIATES
Chartered Accountants
(ICAI Registration No. 000287N)
Place: New Delhi D.K. Kapila
Partner
Date: 30 May 2013 (Membership No. 16905)
Mar 31, 2012
1. We have audited the attached Balance Sheet of MMTC Limited as at
March 31, 2012, the Statement of Profit and Loss and the Cash Flow
Statement for the year ended on that date, both annexed thereto in
which are incorporated the accounts of Corporate Office, Mica Division,
Jhandewalan Regional Office and Sub-Regional Offices which are under
Jhandewalan Regional Office audited by us and the other Regional
Offices and Sub-Regional Offices audited by the other Auditors. 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.
2. We conducted our audit in accordance with 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 of 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.
3. As required by the Companies (Auditor's Report) Order, 2003 (as
amended) and read together with the Companies (Auditor's Report) Order,
2004 (hereinafter referred to as the order) issued by the Central
Government of India in terms of Section 227(4A) of the Companies Act,
1956 and on the basis of such checks of the records of the Company as
we considered appropriate and according to the information and
explanations given to us, we give in the Annexure, a statement on the
matters specified in paragraphs (4) and (5) of the said Order.
4. Further to our comments in the Annexure referred to in paragraph
(3) above, we report as follows: -
(i) Non-provision of liability, if any, in case of extension of time /
waiver / write off of GR-1 forms. (Refer note no. 23)
(ii) Balances under Sundry Debtors/claims Recoverable / Loans &
Advances / Sundry Creditors / Other Liabilities have not been confirmed
in some cases by the parties. Adjustments, if any, required upon such
confirmation are not ascertainable. (Refer note no. 39)
(iii) Our observations in respect of the inadequacies in the internal
control systems, as stated in para (iv) of Annexure to main audit
report, which may have consequential effect on the accounts for the
year. (Effect not ascertainable).
(iv) Attention is invited to an ad-hoc provision of Rs. 1002.05 million
made on account of certain acts of commission & omission pertaining to
recoverable from debtors at Regional Office Chennai. (Refer note no.
17)
5. We further report that: -
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit except as otherwise stated in report;
(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 the
books;
(c) Proper returns, adequate for the purpose of our audit have been
received from Regional Offices, Sub Regional Offices and Branches not
audited by us. Reports of Regional Auditors have been considered while
preparing our report;
(d) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
accounts and with the audited returns from the Regional Offices;
(e) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report are in compliance with
the Accounting Standards referred to in Section 211 (3C) of the
Companies Act, 1956;
(f) Being a Government Company, pursuant to the gazette notification
No.GSR 829 (E) dated 21-10-2003 issued by Government of India,
provisions of clause (g) of sub-section (1) of section 274 of the
companies Act 1956 are not applicable to the company.
6. We further report that, the impact of paragraphs 4(i) to 4(iii)
above on the profit of the year and the assets and liabilities
appearing in the Balance Sheet, could not be ascertained. In our
opinion and to the best of our information and according to the
explanations given to us, the said accounts read together with the
Significant Accounting Policies and notes thereon, give the information
required by the Companies Act, 1956 in the manner so required, other
than as stated above, and give a true and fair view in conformity with
the accounting principles generally accepted in India:
(i) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2012;
(ii) In the case of the Statement of Profit and Loss, of the Profit of
the Company for the year ended on that date; and
(iii) In the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Annexure to the Auditors' Report
Referred to in paragraph 3 of the Auditor's Report of even date to the
members of MMTC Limited on the financial statements for the year ended
March 31, 2012.
(i) In respect of fixed assets:
(a) The Company has generally maintained proper records showing full
particulars including quantitative details and situation of the fixed
assets.
(b) As explained to us, all the fixed assets have been physically
verified by the Management during the year; which, in our opinion is
reasonable having regard to the size of the company and the nature of
its assets. No material discrepancies were noticed on such
verification.
(c) In our opinion and according to the information and explanations
given to us, no substantial part of the fixed assets has been disposed
off by the Company during the year and therefore the going concern
assumption is not affected.
(ii) In respect of its inventories:
(a) As explained to us, the inventories excepting in case of goods in
transit, stocks lying in Central / State Warehouses (where confirmation
were obtained from the parties and relied upon) were physically
verified during the year by the Management at reasonable intervals.
(b) In our opinion, procedures of physical verification of inventory
followed by the Management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) On the basis of our examination of records of the inventory, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stock and
the books of account were not material except in the case of inventory
of pulses at Regional Office Mumbai which has been properly dealt with
in the books of account.
(iii) In respect of loans:
(a) As informed to us, the 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.In
view of this, sub clauses (b),(c) and (d) of clause (iii) are not
applicable.
(b) As informed to us, the Company has not taken any loans, secured or
unsecured from Companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956. In
view of this, sub clauses (e), (f) and (g) of clause (iii) are not
applicable.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the company and the nature of its business for the
purchase of inventory, fixed assets and for the sale of goods &
services. However, there is inadequate internal control systems
in-regard to obtaining confirmation / reconciliation of outstanding
balances, accounting of tax deducted at source on payments made by
other parties. Further, on the basis of our examination and according
to the information and explanations given to us, we have come across
instances where there is total lack of internal control system
particularly at Regional Office Chennai, Regional Office Hyderabad and
Jhandewalan Regional Office in areas of obtaining bank balance
confirmation, confirmations of FDR / BG, procedure / system for
obtaining buyer's credit, forward cover.
Further, the internal control mechanism needs to be strengthened,
besides the areas mentioned hereinbefore, in the following areas:
(a) Risk management particularly of foreign exchange exposure and its
subsequent documentation / record keeping and also time-to-time
monitoring of the risk to the company.
(b) Periodic quantitative reconciliation of goods traded by the company
(particularly bullion) between the ERP and other standalone inventory
system.
(c) Active and prompt follow-up of old debts, advances, claims, court
cases and recoveries etc arising out of execution of decrees/awards in
favor of the company, by respective Commodity Division.
(v) (a) In our opinion and according to the information and
explanations given to us, there are no contracts and arrangements
referred to in Section 301 of the Companies Act 1956, particulars of
which need to be entered into a register maintained under Section 301
of the Act.
(b) Accordingly the provisions of the clause V (b) of paragraph 4 of
the order (as amended) are not applicable to the company
(vi) The directives issued by the Reserve Bank of India and the
provisions of Section 58A and 58AA or any other relevant provisions of
the Companies Act, 1956 and the rules framed there-under have been
complied with, in respect of deposits accepted from the Public. We have
been informed that, no order has been passed by Company Law Board or
National Company Law Tribunal or Reserve Bank of India or any other
Court or Tribunal in this regard.
(vii) The Company has an internal audit system, which in our opinion is
commensurate with the size of the Company and nature of its business.
However, keeping in view our observations regarding inadequacies in
internal control systems, the internal audit system needs to be
revamped, strengthened and its effectiveness be enhanced.
(viii) As informed to us, the maintenance of cost records under Section
209 (1) (d) of the Companies Act, 1956 has not been prescribed by the
Central Government.
(ix) (a) According to the information and explanations given to us and
the records as produced and examined by us, in our opinion, the Company
is regular in depositing with appropriate authorities undisputed
statutory dues including provident fund, investor education and
protection fund, employees state insurance, income-tax, sales-tax,
wealth tax, service tax, customs duty, Excise Duty, Cess and other
material statutory dues as applicable with the appropriate authorities
and that no undisputed amounts payable in respect of the same were in
arrears as at 31-03-2012 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 of the Company examined by us, the particulars of dues of
income tax / sales tax / wealth tax / service tax / custom duty /
excise duty / cess (as applicable) as at March 31, 2012 which have not
been deposited on account of any dispute, are referred to in Annexure
'A'
(x) The Company does not have any accumulated losses and has not
incurred cash losses in the current financial year and in the
immediately preceding financial year.
(xi) According to the records of the Company examined by us and as per
the information
and explanations given to us, the Company has not defaulted in
repayment of dues to any financial institution or bank or debenture
holders during the year.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities; except
certain loans to employees who have been granted on the basis of
security of house and vehicles and in this regard proper documents &
records are maintained. In respect of loans to its employees other than
those as stated already, are granted without any security.
(xiii) In our opinion, the company is not chit fund or a Nidhi / Mutual
benefit fund / society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditor's Report) Order, 2003 (as amended) are not
applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor's Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us the terms & conditions of the guarantee given by the
company for loans taken by Neelachal Ispat Nigam Limited (an associate
Company) from banks or financial institutions are not prima- facie
prejudicial to the interest of the Company.
(xvi) According to the information and explanation given to us, the
Company has not taken any term loans during the year. Hence, the
provisions of clause 4(xvi) of the Companies (Auditor's Report) Order
2003 (as amended) are not applicable to the Company.
(xvii) According to the information and explanations given to us and
overall examination of the Balance Sheet of the company, we report that
no funds raised on short-term basis have been used for long-term
investment.
(xviii) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the register maintained under Section 301 of
the Companies Act, 1956.
(xix) According to the information and explanations given to us, during
the year covered by our audit report, the Company has not issued any
debentures during the year and hence, the provision of clause No.
4(xix) of the Companies (Auditor's Report) Order 2003 (as amended) is
not applicable to the Company.
(xx) The Company has not raised any money by way of Public Issue during
the year; therefore the provision of clause 4(xx) of the Companies
(Auditor's Report) Order 2003 (as amended) is not applicable to the
Company.
(xxi) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have come across following instances of
material fraud on the Company during the year, as reported by the
Management:-
(a) Regional Office, Chennai Certain acts of commission & omission
relating to bullion transactions pertaining to previous years were
reported resulting into amounts recoverable from Debtors of Rs. 1002.05
million which were lying in the vendors account as at March 31, 2011
against which full provision has been created in the current year. The
company has ordered a special audit into these transactions which is
yet to be completed. In this connection, upon a complaint filed by the
Company, CBI has registered two separate FIRs and has started detailed
investigation also, Directorate of Enforcement have registered an
offence under Prevention of Money Laundering Act 2002. (Refer Note no.
17)
(b) Regional Office, Mumbai
A foreign supplier has submitted forged shipping documents, through
banking channels, to obtain payment of Rs. 28.30 million without making
delivery. However, the company has obtained an interim stay from the
Court restraining the bank from making the payment under the letter of
credit. The same supplier is also fraudulently holding on to the master
bill of lading which would enable the RO to take delivery and
possession of goods valued at Rs. 64.57 million, already paid for and
received at the Indian port. (Refer to note no. 40)
(c) Regional Office, Hyderabad
The company has received fake bills of lading covering two shipments of
copper valued at Rs. 37.50 million against which no material was
received. The foreign supplier has been paid in full through letter of
credit after the company had received full payment from the customer.
The company is in the process of initiating legal action against the
foreign supplier. (Refer note no. 41)
(d) Regional Office, Jhandewalan
One of the customer who was given gold on loan has committed fraud on
the company by providing fake bank guarantees amounting to Rs. 18.0
million against which full provision has been made. The case is under
investigation upon filing of an FIR by the company with the Delhi
Police. (Refer note no. 42)
ANNEXURE 'A' TO AUDITORS' REPORT
Referred to in paragraph 9(b) of Annexure, a statement on the matters
specified in the Companies (Auditors Report) Order, 2003 (as amended)
of MMTC Limited for the year ended on 31st March 2012.
According to the records of the company dues of Income Tax, Sales Tax,
Custom Duty, Excise Duty and Cess which have not been deposited on
account of disputes are stated below:
CHENNAI REGIONAL OFFICE
Name of the
Statue Nature of
the dues Amount
(In Rs.) Period Forum of
Dispute
TNGST ACT Sales Tax,
Penalty 8,63,114 1998-99 High Court
& Interest
TNGST ACT Sales Tax,
Penalty 4,43,416 2000-01 Sales Tax
Appeals
& Interest Tribunal
TNGST ACT Sales Tax,
Penalty 11,52,785 1999-2000 High Court
& Interest
TNGST ACT Sales Tax,
Penalty 1,78,536 2001-02 Asst.
Commissioner
& Interest (Comm. Tax),
Chennai
MUMBAI REGIONAL OFFICE
Name of the
Statue Nature of
the dues Amount
(In Rs.) Period Forum of Dispute
BST ACT Sales Tax 3,08,644 1986-87 Joint Comm. of
Sales Tax
BST ACT Sales Tax 5,19,887 1987-88 Joint Comm. of
Sales Tax
BST ACT Sales Tax 1,33,907 1988-89 Joint Comm. of
Sales Tax
BST ACT Sales Tax 14,96,06,778 1989-90 MST Tribunal
BST ACT Sales Tax 23,30,46,478 1990-91 Dy. Comm.,
Sales Tax
BST ACT Sales Tax 28,98,738 1991-92 Dy. Comm.,
Sales Tax
BST ACT Sales Tax 11,14,933 1992-93 MST Tribunal
BST ACT Sales Tax 45,03,961 2001-02 Dy. Comm.,
Sales Tax
Central
Excise Act Service Tax 1,14,38,000 2008-09 Comm. Central
Excise &
Customs
DELHI REGIONAL OFFICE
Name of the
Statue Nature of
the dues Amount
(In Rs.) Period Forum of Dispute
Delhi Sales
Tax Sales Tax 11,65,303 1984-85 D.C. appeal
Delhi
Sales Tax Sales Tax 6,18,17,683 1986-87 Addl.
Commissioner
Central
Sales Tax Sales Tax 39,14,524 1986-87 Addl.
Commissioner
Delhi Sales
Tax Sales Tax 4,03,31,557 1987-88 Addl.
Commissioner
Central
Sales Tax Sales Tax 28,54,992 1987-88 Addl.
Commissioner
Delhi Sales
Tax Sales Tax 369,45,148 1988-89 Addl.
Commissioner
Central
Sales Tax Sales Tax 33,51,524 1988-89 Addl.
Commissioner
Delhi Sales
Tax Sales Tax 16,35,160 1987-88 Joint
Commissioner
HYDERABAD REGIONAL OFFICE
Name of the
Statue Nature of the Amount (In Period Forum of
Dispute
dues Rs.)
APGST Sales Tax 1,49,770 1989-90 STAT
APGST Sales Tax 29,61,551 1990-91 STAT, Vizag
APGST Sales Tax 24,02,576 1991-92 STAT, Vizag
APGST Sales Tax 13,96,269 1992-93 STAT, Vizag
APGST Sales Tax 17,62,687 1992-93 STAT, Vizag
APGST Sales Tax 6,30,615 1993-94 STAT, Vizag
CST Central Sales 4,41,34476 1993-94 ADC (CT)
Tax
CST Central Sales 2,04,481 1994-95 AC(LTU)
Tax
CST Central Sales 5,97,266 1995-96 ADC (CT)
Tax
APGST Sales Tax 38,03,875 1995-96 STAT, Vizag
APGST Sales Tax 28,80,309 1995-96 STAT, Vizag
CST Central Sales 21,34,306 1996-97 STAT, Vizag
Tax
APGST Sales Tax 58,43,100 1997-98 STAT, Vizag
CST Central Sales 6,35,504 1997-98 ADC (CT)
Tax
APGST Sales Tax 55,65,147 1998-99 STAT, Vizag
APGST Sales Tax 39,04,454 1999-2000 STAT, Vizag
APGST Sales Tax 2,52,926 2000-2001 STAT, Vizag
APGST Sales Tax 2,12,176 2001-02 AC(LTU)
APGST Sales Tax 68,901 2002-03 AC(LTU)
APGST Sales Tax 34,856 2003-04 AC(LTU)
APGST Sales Tax 1,26,000 2004-05 AC(LTU )
VAT VAT 6,76,058 2006-07 STAT
VAT VAT 71,000 2007-08 AC(LTU)
VAT VAT 5,00,000 2008-09 STAT, Vizag
VAT VAT 11,90,100 2008-09 STAT, Vizag
Central
Excise & Custom Duty 24,11,17,719 2008-09 Commissioner of
Customs Customs &
Central
Excise
BHUBANESHWAR REGIONAL OFFICE
Name of the
Statue Nature of
the dues Amount (In Period Forum of
Dispute
Rs.)
Orissa
Sales Tax Interest
Penalty 9,58,035 1966-67 High Court
of Orissa
Orissa
Sales Tax Interest
Penalty 26,50,388 1978-79 High Court
of Orissa
Orissa
Sales Tax Interest
Penalty 6,53,452 1979-80 High Court
Of Orissa
Orissa
Sales Tax CST 33,04,073 1981-82 High Court
Of Orissa
Orissa
Sales Tax Orissa Sales
Tax 78,46,464 1982-83 High Court
Of Orissa
Orissa
Sales Tax Orissa
Sales Tax 3,16,921 1982-83 High Court
Of Orissa
Orissa
Sales Tax Central
Sales Tax 34,83,020 1982-83 -- do ---
Orissa Sales
Tax Interest 2,62,819 1982-83 -- do ---
Orissa
Sales Tax Orissa Sales
Tax 79,13,807 1983-84 -- do ---
Orissa Sales
Tax Orissa Sales
Tax 3,29,926 1983-84 -- do ---
Orissa
Sales Tax Orissa
Sales Tax 35,42,822 1983-84 -- do ---
Orissa Sales
Tax Orissa Sales
Tax 86,48,326 1984-85 -- do ---
Orissa Sales
Tax Orissa Sales
Tax 3,69,294 1984-85 -- do ---
Orissa
Sales Tax Central
Sales Tax 57,96,808 1984-85 -- do ---
Orissa
Sales Tax Interest 3,57,42,030 1978-79 -- do ---
Orissa
Sales Tax Orissa
Sales Tax 21,17,92,315 2010-11 Appeal before
Commissioner of
Sales Tax, Cuttack
Central
Excise Act Service
Tax 7,27,02,132 2003-06 Customs, Excise &
Service Tax
Appellate
Tribunal
Central
Excise Act Service
Tax 13,08,31,221 2003-07 Customs,
Excise &
Service Tax
Appellate
Tribunal
Central
Excise Act Service
Tax 2,539,812,711 2007-08 Customs,
Excise &
Service Tax
Appellate
Tribunal
Central
Excise Act Service
Tax 5,80,77,352 2008-10 Customs,
Excise &
Service Tax
Appellate
Tribunal
Central
Excise Act Service
Tax 4,48,93,394 2010-11 Customs,
Excise &
Service Tax
Appellate
Tribunal
JAIPUR REGIONAL OFFICE
Name of the
Statue Nature of
the dues Amount
(In Rs.) Period Forum of
Dispute
R.S.T ACT Sales Tax 1,28,87,058/- 2003-04 Rajasthan
Tax Board
(Rs 298
7058 deposited
under
protest)
R.S.T ACT Sales Tax 5,32,992/- 2003-04 Rajasthan
Tax Board
(Rs 53300
deposited
under protest)
R.S.T ACT Sales Tax 26,07,605/- 1999-00 Rajasthan
Tax Board
RAJ VAT ACT VAT ACT 326,47,269/- 2010-11 DC(Appeals)
CST ACT CST Act 59,92,494/- 2010-11 DC(Appeals)
VIZAG REGIONAL OFFICE
Name of the
Statue Nature of
the dues Amount
(In Rs.) Period Forum of
Dispute
A.P.G.S.T ACT Sales Tax 18,56,325 1968-69 A.P. High
Court
A.P.G.S.T ACT Sales Tax 26,39,647 1981-82 ADC, Vizag
A.P.G.S.T ACT Sales Tax 6,88,552 1982-83 ADC, Vizag
A.P.G.S.T ACT Sales Tax 17,66,784 1983-84 ADC
A.P.G.S.T ACT Sales Tax 30,00,436 1984-85 ADC
A.P.G.S.T ACT Sales Tax 25,05,806 1985-86 STAT,HYD
A.P.G.S.T ACT Sales Tax 2,70,83,841 1986-87 STAT,
Hyderabad
A.P.G.S.T ACT Sales Tax 36,45,076 1987-88 ADC
A.P.G.S.T ACT Sales Tax 19,34,139 1991-92 STAT,HYD
A.P.G.S.T ACT Sales Tax 4,79,000 1989-90 A.P. High
Court
CST Sales Tax 8,41,695 1994-95 STAT,
Hyderabad
CST Sales Tax 48,62,340 1995-96 STAT,
Hyderabad
CST Sales Tax 33,58,889 1996-97 STAT,
Hyderabad
A.P.G.S.T ACT Sales Tax 25,27,960 1997-98 STAT,
Hyderabad
CST Sales Tax 28,07,578 1997-98 STAT,
Hyderabad
CST Sales Tax 104,614 2007-08 STAT,
Hyderabad
Central
Excise & Service Tax 12,65,26,554 2003 -2006 Customs,
Excise &
Customs Service Tax
Appellate
Tribunal,
Bangalore
KOLKATA REGIONAL OFFICE
Name of
the Statue Nature of
the dues Amount
(In Rs.) Period Forum of
Dispute
WBST ACT
1994 --do-- 86,88,778 1996-97 Sales Tax
Tribunal
WBST ACT
1994 --do-- 33,74,028 1997-98 Appellate Board
WBST ACT
1994 --do-- 37,11,769 1998-99 Sales Tax
Tribunal
CST ACT
1956 Sales Tax 11,30,858 2005-06 Appellate Board
CST ACT
1956 Sales Tax 77,60,971 2006-07 DC Appeal
WB VAT ACT VAT 8,28,126 2008-09 DC Appeal
CST ACT 1956 Sales Tax 2,05,9794 2008-09 DC Appeal
JHANDEWALAN REGIONAL OFFICE
Name of
the Statue Nature of
the dues Amount (In Period Forum of Dispute
Rs.)
Delhi VAT CST/LST/
Interest/
Penalty 4,90,85,551 1997-98 Appellate Tribunal
(Gold
commemorative VAT, Delhi
Medallions)
37,45,290 2002-03 Commissioner, DVAT
UP-VAT VAT Interest
for non- 2,88,866 1995-96 Allahabad
High Court
submission
of Form - 3B 6,11,808 1996-97 Allahabad
High Court
(Gold) &
Non-submission
of Form 2,49,828 2007-08 Commissioner,
UP-VAT
3C1 (Mentha Oil)
Customs Customs Duty
& Interest 2,72,67,919 1999-2000 Delhi High Court
Department,
Delhi on non-
export of Gold
Jewellery
against gold
loan taken
by associates
Date: 28th August, 2012 For JAIN KAPILA ASSOCIATES
CHARTERED ACCOUNTANTS
Place: New Delhi Firm Registration No. 000287N
D.K. Kapila
Sr. Partner
M. No. 016905
Mar 31, 2011
1. We have audited the attached Balance Sheet of MMTC Limited as at
31st March, 20 HT the Profit and Loss Account and the Cash Flow
Statement of the Company far the year ended on that date, both annexed
thereto in which are incorporated the accounts of Corporate Office,
Mica Division, Jhandewalan Regional Office and Sub-Regional Offices
which are under Jhandewalan Regional Office audited by us and the other
Regional Offices and Sub-Regional Offices audited by the other
Auditors; and
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.
2. We conducted our audit in accordance with 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 of material misstatements. An audit
includes examining, on a test blasts, 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.
3. As required by the Companies (Auditor's Report) Order, 2003 (as
amended) and read together with the Companies (Auditor's Report) Order,
2004 (hereinafter referred to as the order) issued by the Central
Government of India in terms of Section 227{4A) of the Companies Act,
1956 and on the basis of such checks of the records of the Company as
we considered appropriate and according to the information and
explanations given to us we give in the Annexure 'A' a statement on
the matters specified in paragraphs (4) and (5) of the said Order.
4. Further to our comments in the Annexure referred to in paragraph
(3) above, we report as follows: -
(i) Non-provision of liability, if any, in case of extension of time /
waiver / write off of GR-1 forms. (Refer Note No. 5)
(ii) Balances under Sundry Debtors/claims Recoverable / Loans &
Advances / Sundry Creditors / Other Liabilities have not been confirmed
in some cases by the parties- Adjustments, if any, required upon such
confirmation are not ascertainable, (Refer Note No. 31)
(iii) Certain observations in respect of the internal control
procedures, as stated in para (iv) ofannexure A ' to main audit report,
which may have consequential effect on the accounts for the year,
(effect not ascertainable).
5. We further report that: -
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit except as otherwise stated in report;
(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 the
books;
(c) Proper returns, adequate for the purpose of our audit have been
received from Regional Offices, Sub Regional Offices and Branches not
audited by us Reports of Regional Auditors have been considered while
preparing our report;
(d) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of accounts
and with the audited returns from the Regional Offices;
(e) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with Accounting
Standards referred to in Section 211 (3C) of the Companies Act, 1956;
(f) Being a Government Company, pursuant to the gazette notification
No. GSR 829 (E) dated 21-10-2003 issued by Government of India,
provisions of clause (g) of section 274 of the companies Act 1956 are
not applicable to the company.
We further report that, the impact of paragraphs 4(i) to 4(iii) above
on the profit of the year and the assets and liabilities appearing in
the Balance Sheet, could not be ascertained. In our opinion and to the
best of our information and according to the explanations given to us7
the said accounts read together with the Significant Accounting
Policies and notes thereon, give the information required by the
Companies Act, 1956 in the manner so required, other than as stated
above, and give a true and fair view in conformity with the accounting
principles generally accepted in India:
(i) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011;
(ii) In the case of the Profit and Loss Account, of the Profit of the
Company for the year ended on that date, and
(iii) In the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
ANNEXURE 'A' TO AUDITOR'S REPORT Referred to in paragraph 3 of the
Auditor's Report of even date to the members of MMTC Limited on the
financial statements for the year ended 31 st March 2011
(I) In respect of fixed assets:
(a) The Company has generally maintained proper records showing full
particulars including quantitative details and situation of the fixed
assets.
(b) As explained to us, all the fixed assets have been physically
verified by the Management during the year except Corporate Office,
Regional Office Eellary and Jhandewalan which, in our opinion is
reasonable having regard to the size of the company and the nature of
its assets. No material discrepancies were noticed on such
verification.
(c) In our opinion and according to the information and explanations
given to usT no substantial part of the fixed assets has been disposed
off by the Company during the year and therefore the going concern
assumption is not affected.
(ii) In respect of its inventories:
(a) As explained to us, the inventories excepting in case of goods in
transit, stocks lying in Central / State Warehouses (where confirmation
were obtained from the parties and relied upon) were physically
verified during the year by the Management at reasonable intervals.
(b) In our opinion, procedures of physical verification of inventory
followed by the Management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) On the basis of our examination of records of the inventory, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stock and
the books of account were not material except in the case of inventory
of coal at regional office Mumbai which has been properly dealt with in
the hooks of account.
(iii) In respect of loans:
(a) As informed to us, the 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.In
view of this, sub clauses (b),(c) and (d) of clause (iii) are not
applicable.
(b) As informed to us, the Company has not taken any loam, secured or
unsecured from Companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956. In
view of this, sub clauses (e), (f) and (g) of clause (iii) are not
applicable,
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business for the
purchase of inventory, fixed assets and for the sale of goods and
services. Further, on the basis of our examination and according to the
information and explanations given to us, we have neither come across
nor have we been informed of any instance of major weaknesses in the
aforesaid internal control systems
However, the internal control mechanism needs to be strengthened in the
following areas:
(a) Active and prompt follow-up of old debts, advances, claims, court
cases and recoveries etc arising out of execution of decrees/awards in
favour of ike company, by respective Commodity Division.
(b) Confirmation of outstanding balances and its periodic
reconciliations.
(c) Expeditious follow up of old Sales Tax cases / Appeals pending with
Ctrurts /Appellate Authorities of CO, ROs andSROs including closed SROs
to save on legal costs and interest payable on disputed additional
demands-
(v) (a) In our opinion and according to the information and
explanations given to us, there are no contracts and arrangements
referred to in Section 301 of the Companies Act 1956, particulars of
which need to be entered into a register maintained under Section 301
of the Act. (b) Accordingly the provisions of the clause V(b) of
paragraph 4 of the order (as amended) are not applicable to the company
(vi) The directives issued by the Reserve Bank of India and the
provisions of Section 58 A and 58AA or any other relevant provisions of
the Companies Act, 1956 and the rules framed there-under have been
complied with, in respect of deposits accepted from the Public. We have
been informed that, no order has been passed by Company Law Board or
National Company Law Tribunal or Reserve Bank of India or any other
Court or Tribunal in this regard.
(vii)The Company has an internal audit system, which in our opinion is
commensurate with the size of the Company and nature of its business.
However efforts should be made for further improvement.
(viii) As informed to us, the maintenance of cost records under Section
209 (1) (d) of the Companies Act, 1956 has not been prescribed by the
Central Government.
(ix) (a) According to the information and explanations given to us
and the records as produced and examined by us, in our opinion, the
Company is regular in depositing with appropriate authorities
undisputed statutory dues including provident fund, investor education
and protection fund, employees state insurance, income-tax, sales-tax,
wealth tax, service tax, customs duty, Excise Duty, Cess and other
material statutory dues as applicable with the appropriate authorities
and that no undisputed amounts payable in respect of the same were in
arrears as at 31-03-2011 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 of the Company examined by us, the particulars of dues of
income tax / sales tax / wealth tax / service tax / custom duty /
excise duty / cess (as applicable) as at March 31, 2011 which have not
been deposited on account of any dispute, are referred to in
Annexure-'f'
(ix) The Company does not have any accumulated losses and has not
incurred cash losses in the current financial year and in the
immediately preceding financial year.
(xi) According to the records of the Company examined by us and as per
the information and explanations given to US, the Company has not
defaulted in repayment of dues to any financial institution or bank or
debenture holders during the year.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities; except
certain loans to employees which have been granted on the basis of
security of house and vehicles and in this regard proper documents &.
records are maintained. In respect of loans to its employees other than
those as stated already, are granted without any security.
(xiii) In our opinion, the company is not chit fund or a Nidhi / Mutual
benefit fund I society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditor's Report) Order, 2003 (as amended) are not
applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor's Report) Older,
2003 (as amended) are not applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to US the terms & conditions of the guarantee given by the
company for loans taken by NINL from banks or financial institutions
during the year are not prima-facie prejudicial to the interest of the
Company.
(xvi) According to the information and explanation given to usr the
Company has not taken any term loans during the year. Hence, the
provisions of clause 4(xvi) of the Companies (Auditor's Report) Order
2003 (as amended) are not applicable to the Company.
(xvii) According to the information and explanations given to us and
overall examination of the Balance Sheet of the company, we report that
no funds raised on short-term basis have been used for long-term
investment.
(xviii) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the register maintained under Section 301 of
the Companies Act, 1956.
(xix) According to the information and explanations given to us, during
the year covered by our audit report, the Company has not issued any
debentures during the year and hence, the provision of clause No.
4(xix) of the Companies (Auditor's Report) Order 2003 (as amended) is
not applicable to the Company.
(xx) The Company has not Taised any money by way of Public Issue during
the year, therefore the provision of clause 4(xx) of the Companies
(Auditor's Report) Order 2003 (as amended) is not applicable to the
Company.
(xxi) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
materia! fraud on/or by the Company, noticed or reported during the
year, nor we have been informed for such case by the Management except
at regional office Kolkata where an incidence of unauthorized lifting
of hypothecated stock of 86,542 MT yellow peas covering value of f 1285
million by two associates were reported,However the entire amount has
been fully recovered towards full and final settlement of the total
quantity sold to them on high seas basis,
For N. K. Bhargava & Co.
Chartered Accountants
F. R. No. 000429N
(CA N. K. BHARGAVA>
Partner
M. No. 080624
Place: New Delhi
Dated: 02.08.2011
Mar 31, 2010
We have audited the attached Balance Sheet of MMTC Limited as at 31st
March, 2010, Profit & Loss Account and the Cash Flow Statement of the
Company for the year ended on that date, annexed thereto in which are
incorporated the accounts of Corporate Office, Mica Division and
Jhandewalan Regional Office audited by us and the other Regional
Offices and Sub-Regional Offices audited by the other Auditors; and
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 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 of material misstatement. 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.
1. As required by the Companies (Auditors Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of sub
section (4A) of Section 227 of the Companies Act, 1956 and on the basis
of such checks of the records of the Company as we considered
appropriate and according to the information and explanations given to
us, we give in the Annexure A a statement on the matters specified in
paragraphs (4) and (5) of the said Order.
2. Further to our comments in the Annexure referred to in paragraph
(1) above, we report as follows: -
(i) Non-provision of liability, if any, in case of extension of time I
waiver / write offofGR-1 forms. (ReferNote No. 5)
(ii) Balances under Sundry Debtors I Claims Recoverable I Loans &
Advances I Sundry Creditors / Other Liabilities have not been confirmed
in some cases by the parties. Adjustments, if any, required upon such
confirmation are not ascertainable. (Refer Notes No. 33)
(iii) Certain observations in respect of the internal control
procedures, as stated in para (iv) of annexure A to main audit
report, which may have consequential effect on the accounts for the
year, (effect not ascertainable).
We further report that: -
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit except as otherwise stated in report.
(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 the
books.
(c) Proper returns, adequate for the purpose of our audit have been
received from Regional Offices, Sub Regional Offices and Branches not
audited by us. Reports of Regional Auditors have been considered while
preparing our report.
(d) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
deall with by this report are in agreement with the books of accounts
and with the audited returns from the Regional Offices.
(e) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with Accounting
Standards referred to in Section 211 (3C) of the Companies Act, 1956.
(f) Being a Government Company, pursuant to the gazette notification
No.GSR 829 (F) dated 21-10-2003 issued by Government of India,
provisions of clause (g) of section 274 of the companies Act 1956 are
not applicable to the company.
We further report that, the impact of paragraphs 2(i) to 2(iii) above
on the profit of the year and the assets and liabilities appearing in
the Balance Sheet, could not be ascertained. In our opinion and to the
best of our information and according to the explanations given to us
the said accounts read together with the Significant Accounting
Policies and notes thereon, give the information required by the
Companies Act, 1956 in the manner so required, other than as stated
above, and give a true and fair view in conformity with the accounting
principles generally accepted in India:
(A) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31 st March, 2010; and
(B) In the case of the Profit and Loss Account, of the Profit of the
Company for the year ended on that date; and
(C) In the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
ANNEXURE TO AUDITORS REPORT Referred to in paragraph 1 of the
Auditors Report of even date to the members of MMTC Limited on the
financial statements for the year ended 31 st March 2010.
(i) (a) The Company has generally maintained proper records showing
full particulars including quantitative details and situation of fixed
assets.
(b) As explained to us, all the assets have been physically verified by
the management during the year which, in our opinion is reasonable
having regard to the size of the company and the nature of its assets.
No material discrepancies were noticed on such verification.
(c) In our opinion and according to the information and explanations
given to us, no substantial part of the fixed assets have been disposed
off by the Company during the year and therefore the going concern
assumption is not affected.
(ii) (a) The inventory has been physically verified by the management
during the year, except in case of goods in transit, stocks lying in
Central / State Warehouses where confirmation were obtained from the
parties and relied upon.
In our opinion, the frequency of verification is reasonable.
(b) In our opinion, procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stock and
the books of account were not material.
(iii) (a) As informed to us, the 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.
(b) Not applicable in view of para (iii) (a) above.
(c) Not applicable in view of para (iii) (a) above.
(d) Not applicable in view of para (iii) (a) above.
(e) As informed to us, the Company has not taken any loans, secured or
unsecured from Companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
(f) Not applicable in view of para (iii) (e) above.
(g) Not applicable in view of para (iii) (e) above.
(iv) 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 with regard to the purchase of inventory, fixed assets and
with regard to the sale of goods and services. During the course of our
audit, no major weakness has been noticed in the internal control
system However, the internal control mechanism needs to be strengthened
in the following areas:
(a) Active and prompt follow-up of old debts, advances (including staff
advances) and claims by respective Commodity Division.
(b) Confirmation of outstanding balances and its periodic
reconciliations.
(c) Follow-up of court cases and recoveries arising out of execution
ofdecrees /awards announced in favour of the company.
(d) Rotation of jobs on the operations being carried out where the
magnitude of the transactions is very high. However such rotations are
not affected in any structured manner or under any laid down policy.
(e) Expeditious follow up of old Sales Tax cases I Appeals pending with
Courts/Appellate Authorities of CO, ROs and SROs including closed SROs
to save on legal costs and interest payable on disputed additional
demands.
(v) (a) In our opinion and according to the information and
explanations given to us, there are no contracts and arrangements
referred to in Section 301 of the Companies Act 1956, particulars of
which need to be entered into a register maintained under Section 301
of the Act.
(b) Not applicable in view of para (v) (a) above.
(vi) The directives issued by the Reserve Bank of India and the
provisions of Section 58A and 58AA or any other relevant provisions of
the Companies Act, 1956 and the rules framed there-under have been
complied with, in respect of deposits accepted from the Public. We have
been informed that, no order has been passed by Company Law Board or
National Company Law Tribunal or Reserve Bank of India or any other
Court or Tribunal in this regard.
(vii) The Company has an internal audit system, which in our opinion is
commensurate with the size of the Company and nature of its business
however, in our opinion internal audit needs to be further
strengthened.
(viii) As informed to us, the maintenance of cost records under Section
209 (1) (d) of the Companies Act, 1956 has not been prescribed by the
Central Government.
(ix) (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is regular in depositing with appropriate authorities undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employees State Insurance, Income-Tax, Sales-tax,
Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other
material statutory dues as applicable with the appropriate authorities
and that no undisputed amounts payable in respect of the same were in
arrears as at 31 -03-2010 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 of the Company examined by us, the particulars of dues of
Income Tax / Sales Tax / Wealth Tax / Service Tax / Custom Duty /
Excise Duty / Cess (as applicable) as at March 31, 2010 which have not
been deposited on account of any dispute, are referred to in
Annexure-B
(x) The Company does not have any accumulated losses and has not
incurred cash losses in the current financial year and in the
immediately preceding financial year.
(xi) According to the records of the Company examined by us and as per
the information and explanations given to us, the Company has not
defaulted in repayment of dues to any financial institution or bank or
debenture holders.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities; except
certain loans to employees which have been granted on the basis of
security of house and vehicles and in this regard proper documents &
records are maintained. In respect of loans to its employees other than
those as stated already, are granted without any security.
(xiii) In our opinion, the company is not chit fund or a Nidhi / Mutual
benefit fund / society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditors Report) Order, 2003 (as amended) are not
applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditors Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us the terms & conditions of the guarantee given by the
company for loans taken by NINL from banks or financial institutions
during the year are not prima-facie prejudicial to the interest of the
Company.
(xvi) According to the information and explanation given to us, the
Company has not taken any term loans during the year. Hence, the
provisions of clause 4(xvi) of the Companies (Auditors Report) Order
2003 (as amended) are not applicable to the Company.
(xvii) According to the information and explanations given to us and
overall examination of the Balance Sheet of the company, we report that
no funds raised on short-term basis have been used for long-term
investment.
(xviii) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the register maintained under Section 301 of
the Companies Act, 1956.
(xix) According to the information and explanations given to us, during
the year covered by our audit report, the Company has not issued any
debentures during the year and hence, the provision of clause No.
4(xix) of the Companies (Auditors Report) Order 2003 (as amended) is
not applicable to the Company.
(xx) The Company has not raised any money by way of Public Issue during
the year, therefore the provision of clause 4(xx) of the Companies
(Auditors Report) Order 2003 (as amended) is not applicable to the
Company.
(xxi) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on/or by the Company, noticed or reported during the
year, nor we have been informed for such case by the management.
For N. K. Bhargava & Co.
Chartered Accountants
Sd/-
(CA N. K. Bhargava)
Place: New Delhi Partner
Dated: 29.06.2010 M. No. 080624
F. R.NO.000429N