We have audited the accompanying Standalone Ind AS financial statements of Mauria Udyog Limited (“the Company"), which comprise the Standalone Balance Sheet as at March 31, 2024, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year then ended and notes to the Standalone Ind AS financial statements including a summary of significant accounting policies and other explanatory information (hereinafter referred to as “Standalone Ind AS Financial Statements").
In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid Standalone Ind AS 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 accounting principles generally accepted in India including Indian Accounting Standards (“Ind AS"), of the state of affairs of the Company as at March 31, 2023, its profit including other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Qualified Opinion
I. In the earlier years, the Company has defaulted in repayment of its borrowing taken from various banks/ NBFCs and accordingly these loans have been classified as Non-Performing Assets (NPAs) by the respective banks/ NBFCs. The Company had not been recognising interest on such loans from the date of NPA classification by respective banks/ NBFCs. The amount of interest expenses cannot be ascertained. However, such loans have been restructured and revised payment schedule has been defined. Further, the balances of borrowings are subject to confirmation and reconciliation from the respective banks/ NBFCs.
II. The Company has classified its investments in unquoted equity shares of other entities to be Fair Valued through other comprehensive income (FVTOCI). However, it has not obtained/ carried out fair valuation of such unquoted equity shares. The Company has measured investments in unquoted equity shares based on Net Asset Value of such equity shares as at 31 March 2023 wherever the financial statements of such entities are available as on such date. The impact of fair valuation cannot be ascertained.
III. The Company has not used expected credit loss model to assess the impairment loss or gain
on trade receivables as required by Ind AS 109 "Financial Instruments". The impact of such non-compliance cannot be ascertained. However, the Company has made a provision of Rs. 3,287.79 Lacs against doubtful trade receivables.
IV. The Company had entered into certain transactions with Amrapali Group of Companies in past years. In consequent to which forensic audit was conducted as per the Directions of Hon'ble Supreme Court of India to look into transactions between Amrapali Group of Companies and Sureka Group of Companies. After which the Hon'ble Supreme Court vide its order No. Writ Petition{s}(Civil) No. 940/2017 dated 2 December 2019 had directed M/s Jotindra Steel & Tubes Limited and Mauria Udyog Limited including associated companies and Directors viz Mr. Navneet Kumar Sureka and Mr. Akhil Kumar Sureka to deposit ? 16,700.00 Lacs. In response to the order of the Hon'ble Supreme Court, it had filed an application on 9 December 2019 before the Hon'ble Supreme Court to accept the Title deeds of immoveable properties belonging to Sureka family members and associate companies (based on latest valuation report) worth amounting ? 16,897.00 Lacs net of incumbency amount of ? 3,934.00 Lacs including Properties amounting ? 10,182.00 Lacs belonging to Mauria Udyog Limited.
In the financial year 2019-20, the Company had charged ? 1,500.00 Lacs in the Statement of Profit and Loss against the above matter on an estimated basis and reduced the value of properties (property which is deposited to Hon'ble Supreme Court).
The Company has neither provided for liability against this matter, nor any amount has been shown as contingent liability as required by Ind AS 37 "Provisions, Contingent Liabilities and Contingent Assets".
We conducted our audit in accordance with Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Standalone Ind AS 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 Ind AS financial statements under the provisions of the Act and Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Ind AS financial statements of the current period. These matters were addressed in the context of our audit of the Standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
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Key Audit Matters
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How our audit addressed the key audit matter
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Loss allowance for Trade receivables (refer Note 8 and point iii of Basis for Qualified Opinion paragraph)
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Our
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audit procedures included the following:
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The Company has trade receivables of ? 7813.16
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lacs as at 31 March 2024 (net of impairment loss
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•
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Understanding the trade receivables process
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of ? 3,287.79 lacs). During financial year 2021-22,
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with regards to valuation and testing of
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the Company had recorded a charge of ?
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controls designed and implemented by the
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7,300.38 lacs towards provision for doubtful
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management.
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debts for such trade receivables.
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•
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Testing the accuracy of ageing of trade receivables at year end on sample basis.
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Owing to the nature of operations of the
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•
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Obtained a list of outstanding receivables,
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Company and related customer profiles, the
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with the identified significant long
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Company has significant long standing trade
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outstanding receivables, and discussed plan
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receivable balances, for which appropriate loss
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of recovery lifetime with management.
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allowance is required to be created for expected
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•
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Circularized balance confirmations to a
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credit losses using simplified approach in
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sample of trade receivables and reviewed
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accordance with the requirements of Ind AS 109, Financial Instruments, measuring the loss
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the reconciling items, if any.
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allowance equal to lifetime expected credit losses.
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•
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Verified the appropriateness of judgments regarding provisions for trade receivables
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and assess as to whether these provisions
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For the purpose of expected credit loss
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were calculated in accordance with the
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assessment of trade receivables, significant
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Company's provisioning policies.
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judgment is required by the management to
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•
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Tested subsequent settlement of trade
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estimate the timing and amount of realization of
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receivables after the balance sheet date on a
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these receivables basis the past history, customer
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sample basis, as applicable.
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profiles, and consideration of other internal and
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•
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Verified the related disclosures made in
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external sources of information, including the
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notes to the financial statements in
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impact of COVID 19 pandemic in aforesaid estimates.
/£/
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accordance with Ind AS 115 and Ind AS 109.
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Considering the significant judgement involved, increased complexities due to the pandemic, high estimation uncertainty and materiality of the amounts involved, we have identified loss allowance on trade receivables as a key audit matter for current year audit.
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• The Company has not used expected credit loss model to assess the impairment loss or gain on trade receivables as required by Ind AS 109 “Financial Instruments".
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Litigation, Claims and Contingent Liabilities (Refer Note 68, read along with point iv of
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Principal audit procedures performed:
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Basis for Qualified Opinion paragraph)
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• We understood the processes, evaluated the design and implementation of controls and
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The Company is exposed to a variety of different
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tested the operating effectiveness of the
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laws, regulations and interpretations thereof
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Company's controls over the recording and re-
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which encompasses indirect taxation and legal
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assessment of uncertain legal positions, claims
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matters. In the normal course of business,
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and contingent liabilities.
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provisions and contingent liabilities may arise
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• We held discussions with senior management
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from legal proceedings, including regulatory and
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including the person responsible for legal and
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other Governmental proceedings, constructive
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compliance to obtain an understanding of the
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obligations as well as investigations by
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factors considered by management in
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authorities and commercial claims.
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classification of the matter as 'probable',
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Based on the nature of regulatory and legal cases
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'possible' and 'remote';
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management applies significant judgement
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• Examined the Company's legal expenses on
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when considering whether, and how much, to
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sample basis and read the minutes of the
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provide for the potential exposure of each
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board meetings and the legal compliance
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matter. These estimates could change
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committee in order to ensure completeness.
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substantially over time as new facts emerge as each legal case or matters progresses.
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• We read the correspondence from Court authorities and considered legal opinion obtained by the Management from external
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Given the different views, possible basis the
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law firms to evaluate the basis used for
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interpretations, complexity and the magnitude of
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provisions recognised or the disclosures made
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the potential exposures, and the judgement
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in the Standalone Ind AS financial statements.
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necessary to determine required disclosures, this
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• We also obtained direct legal confirmations for
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is a key audit matter.
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significant matters from the law firms handling such matters to corroborate management's conclusions.
• For those matters where Management concluded that no provision should be recorded, we also considered the adequacy and completeness of the Company's disclosures made in relation to contingent
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_/dRK_
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liabilities.
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I. We draw attention to note 8 to the Statement, which describes the classification of disputed and long outstanding trade receivables as non-current aggregating Rs. 7,813.16 Lacs (net of provision of Rs. 3,287.79 Lacs) wherein the management has explained the reasons for not writing off/ provided for such receivables.
II. We also draw attention to note 69 to the Statement, which describes that the Company has received an interim order cum show cause notice from Security & Exchange Board of India (SEBI) and issued interim directions restraining the Company from accessing the securities market till further orders and also directed the Company to deposit jointly and severally with other notices an amount of Rs. 2,619.69 Lacs. The management has explained the reasons for not recording liability for the amount so sought in the order.
III. We also draw attention to note 23 to the statement, which describes the reason for non
allotment equity shares against the share application money within 6 months of receipt.
IV. We also draw attention to note 32 to the statement wherein the management has described
the reasons for justification of amount received against the disputed land.
Our opinion is not modified in respect of these matters.
Information other than the Financial Statements and Auditor's Report thereon
The Company's Board of Directors are responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone financial statements and our auditor's report thereon. The Annual Report is expected to be made available to us after the date of this auditor's report.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.
Responsibilities of Management and Those Charged with Governance 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 Act with respect to the preparation of these Standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including Ind AS specified under section 133 of the Act, read with relevant rules issued thereunder. 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.
In preparing the Standalone Ind AS 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.
Those Board of Directors are also responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Ind AS 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 this Standalone Ind AS 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 Standalone Ind AS 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.
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• Obtain an understanding of internal 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 with reference to Standalone Ind AS financial statements 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 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 Standalone Ind AS 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 Standalone Ind AS financial statements, including the disclosures, and whether the Standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Ind AS financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
(1) As required by Section 197(16) of the Act, based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V of the Act.
(2) As required by the Companies (Auditor's Report) Order, 2020 (“the Order") issued by the Central Government of India in terms of section 143(11) of the Act, we give in ''Annexure 1", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
(3) 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) Except for the possible effects of the matter described below in the point h (vi) of our report, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss, and the Statement of Cash Flows dealt with by this report are in agreement with the books of account;
d) In our opinion, the aforesaid Standalone Ind AS financial statements comply with the Ind AS specified under section 133 of the Act read with relevant rules issued thereunder except for the matters described in Basis for Qualified Opinion paragraph;
e) the matters described in Basis for Qualified Opinion & Emphasis of Matter paragraphs, in our opinion, may have an adverse effect on the functioning of the Company;
f) On the basis of the written representations received from the directors as on March 31, 2024, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2024 from being appointed as a director in terms of section 164(2) of the Act;
g) With respect to the adequacy of the internal financial controls with reference to Standalone Ind AS financial statements of the Company and the operating effectiveness of such controls, we give 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. The Company, as detailed in Note 68 to the Standalone Ind AS financial statements, has disclosed the impact of pending^iga^n^on its financial position as at March 31, 2024;
ii. The Company did not have any long-term contracts including derivative contracts. Hence, the question of any material foreseeable losses does not arise;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
iv. (a) The Management has represented that, to the best of its knowledge and belief, as disclosed in notes to the accounts, no funds 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(s) or entity(ies), including foreign entities (“Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend to or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend to or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that are considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under (a) and (b) above contain any material misstatement.
v. The Company has not declared nor paid any dividend during the year. Hence, reporting the compliance with section 123 of the Act is not applicable.
vi Based on our examination, which included test checks, the Company has used accounting softwares for maintaining its books of account for the financial year ended March 31, 2024 which has a feature of recording audit trail (edit log) facility and the same has operated starting from 30 January 2024 to 31 March 2024 for all relevant transactions recorded in the softwares. Further, during the course of our audit we did not come across any instance of the audit trail feature being tampered with.
As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31, 2024
For NKSC & Co.
Chartered Accountants
ICAI Firm Rec|i^i©ti^ri^No.020076N
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Priyank Goyarsd acc^X
Partner
Membership No.: 521986 UDIN:24521986BKFKTB2754
Place: New Delhi Date: May 29, 2024
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