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Modi Rubber Ltd.

BSE: 500890 Sector: Auto
NSE: MODIRUBBER ISIN Code: INE832A01018
BSE 00:00 | 20 Apr 2020 Modi Rubber Ltd
NSE 05:30 | 01 Jan 1970 Modi Rubber Ltd

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OPEN 29.85
PREVIOUS CLOSE 29.85
VOLUME 20
52-Week high 51.00
52-Week low 27.40
P/E 9.69
Mkt Cap.(Rs cr) 75
Buy Price 28.65
Buy Qty 2.00
Sell Price 31.40
Sell Qty 8.00
OPEN 29.85
CLOSE 29.85
VOLUME 20
52-Week high 51.00
52-Week low 27.40
P/E 9.69
Mkt Cap.(Rs cr) 75
Buy Price 28.65
Buy Qty 2.00
Sell Price 31.40
Sell Qty 8.00

Modi Rubber Ltd. (MODIRUBBER) - Auditors Report


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Company auditors report

To

The Members of

Modi Rubber Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying financial statements of Modi Rubber Limited("the Company") which comprise the Balance Sheet as at March 31 2019 theStatement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and Statement of Changes in Equity for the year ended and a summary ofsignificant accounting policies and other explanatory information (herein after referredto as "the standalone financial statements"). In our opinion and to the best ofour information and according to the explanations given to us the aforesaid standalonefinancial statements give the information required by the Companies Act 2013 ("theAct") in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31 March 2019 and profit (including other comprehensive income) changes in equityand its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor’s Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion on the Financial Statement.

Key Audit Matters

Key audit matters (‘KAM’) are those matters that in our professionaljudgment were of most significance in our audit of the standalone financial statements ofthe current period. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters.

The key audit matters How our audit addressed the key audit matter
Evaluation of contingencies & uncertain tax positions
Prior to closure of operations by illegal strikes of the workers in Our audit procedures include the following substantive procedures:
August 2001 and thereafter sanction of Rehabilitation Scheme under the provisions of SICA by BIFR on 21.04.2008 (refer note 41 & 42 of financial statements) the Company operated in multiple jurisdictions and subjected to periodic challenges by local tax authorities income tax authorities labour law authorities & other statutory authorities on a range of various tax & other matters during the normal course of business. These involve significant management judgment to determine the possible outcome of the uncertain tax positions & other contingencies consequently having an impact on related accounting and disclosures in the standalone financial statements. Refer Note 2(m) Note 24(a) & Note 40 to the standalone financial statements. • Obtained understanding of key contingencies & uncertain tax positions and ;
• We along with our internal legal experts -
- Read and analysed select key correspondences external legal opinions / consultations by management for key contingencies & uncertain tax positions;
- Discussed with appropriate senior management and evaluated management’s underlying key assumptions in estimating the tax provisions; and
- Assessed managements estimate of the possible outcome of the disputed cases.

Other Information

The Company’s management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in theCompany’s annual report but does not include the standalone financial statements andour auditors’ report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation; we are required to report that fact. We have nothing to report in thisregard.

Management’s Responsibility for the Standalone Financial Statements

The Company’s management and Board of Directors are responsible for the mattersstated in Section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the standalone financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.In preparing the financial statements management and Board of Directors are responsiblefor assessing the Company’s ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. Board of Directors is alsoresponsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibility for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor’s report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these standalone financial statements. As part of an audit in accordance withSAs we exercise professional judgment and maintain professional skepticism throughout theaudit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Act if applicable we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls with reference to standalonefinancial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany’s ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor’s report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditors’ report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope andtiming of the audit and significant audit findings including anysignificant deficiencies in internal control that weidentify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors’ report unless law or regulation precludes public disclosure aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicatedin our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of subsection (11) ofsection 143 of the Companies Act 2013 we give in the Annexure "A" a statementon the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

As required by Section 143(3) of the Act we report that: a. we have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit; b. in our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books; c. the Balance Sheet the Statement of Profit and Loss(including other comprehensive income) the Cash Flow Statement and the Statement ofChanges in Equity dealt with by this Report are in agreement with the books of account; d.in our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with rules 7 of theCompanies (Accounts) Rules 2014; e. on the basis of written representations received fromthe directors as on 31 March 2019 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2019 from being appointed as a director in termsof Section 164(2) of the Act. f. with respect to the adequacy of the internal financialcontrols over financial reporting of the Company and the operating effectiveness of suchcontrols refer to our separate report in "Annexure B"; and; g. In our opinionand according to the information and explanations given to us the remuneration paid bythe Company to its directors during the current year is in accordance with the provisionsof Section 197 of the Act. The remuneration paid to any director is not in excess of thelimit laid down under Section 197of the Act.

The Ministry of Corporate Affairs has not prescribed other details under Section197(16) which are required to be commented upon by us. h. with respect to the othermatters to be included in the Auditor’s

Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014. inour opinion and to the best of our information and according to the explanations given tous: i. the Company has disclosed the impact of pending litigation on its financialposition in its financial statements- Refer Note 40 to the financial statements;; ii. theCompany did not have any long term contracts including derivative contracts for whichthere were any material foreseeable losses; iii. there is no amount required to betransferred to the Investor Education and Protection Fund by the Company.

For SURESH SURANA & ASSOCIATES LLP
Chartered Accountants
Firm’s Registration No. 121750 W / W-100010
(Rahul Singhal)
Place : New Delhi PARTNER
Dated : 28 May 2019 Membership No. 096570

ANNEXURE A TO INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph 1 under the heading of "Report on other legal andregulatory requirements" of our report of even date)

1. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has regular programme of physical verification of its fixed assets bywhich all fixed assets (except the assets which the Company has no access) of respectivelocations are verified in a phased manner over a period of three years. Accordinglyphysical verification of fixed Assets was carried out in financial year 2017-18. In ouropinion this periodicity of physical verification is reasonable having regard to the sizeof the Company and the nature of its assets. No material discrepancies were noticed onsuch verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company except the following cases (Refer Note 3).

S.No. Nature of Gross Block Net Block
Property (Rs. Lacs) (Rs. Lacs)
1 Building on leasehold land 27.49 23.80
2 Building on freehold land 18.96 16.33

2. As explained to us the physical verification of inventory has not been conductedduring the year due to no access to such inventory (Refer note 9).

3. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability partnerships or other parties covered in the register maintained underSection 189 of the Act. Accordingly paragraph 3(iii) (a) 3(iii) (b) and 3(iii) (c) ofthe Order are not applicable.

4. The Company has not granted any loans investments guarantees and securities duringthe year. Accordingly paragraph 3(iv) of the order is not applicable.

5. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits during the year within the meaning of Sections 73 to76 of the Act and the rules framed there under to the extent notified.

6. In our opinion and accounting to the information and explanations given to us therequirement for maintenance of cost records pursuant to the companies (cost records andaudit) Rules 2014 specified by the Central Government of India under Section 148 of theAct are not applicable to the Company for the year under audit.

7. (a) According to the information and explanations given to us the Company isgenerally regular in depositing with appropriate authorities undisputed statutory duesincluding provident fund employee’s state insurance income tax sales tax servicetax goods and service tax duty of customs duty of excise value added tax cess and anyother statutory dues with the appropriate authorities during the year. According to theinformation and explanations given to us there are no undisputed amounts payable inrespect of such statutory dues which have remained outstanding as at 31 March 2019 for aperiod of more than six months from the date they became payable except sales tax dues ofvarious state authorities amounting of Rs.1821.02 lacs.

(Refer Note 24(a))

(b) According to the information and explanations given to us there are no dues inrespect of income tax sales tax service tax goods and service tax duty of customsduty of excise and value added tax which have not been deposited on account of any disputeother than the following:

Name of the Statute Nature of dues Amount Period to which the amount relates Forum where dispute is pending
Rs. Lacs
Central Excise Act 1944 Excise Duty 30.85 2000-01 & 2001-2002 Assistant Commissioner Meerut
Central Excise Act 1944 Excise Duty 77.40 1977-78 Allahabad High Court
Central Excise Act 1944 Excise Duty 69.11 July 2001 Allahabad High Court
Foreign Trade Development and Regulation Act 1992 Custom Duty 200.00 1995-1996 Additional DGFT Commissioner (A)
Income Tax Act 1961 Income Tax 1376.07 2003-2004 Delhi High Court

 

Name of the Statute Nature of dues Amount Period to which the amount relates Forum where dispute is pending
Rs. Lacs
PGST ACT 1948 Sales Tax 17.53 1992 to 2002 Deputy Excise & Taxation Commissioner Jalandhar
Bihar Sales Tax Act Sales Tax 101.23 2001-2001 Commercial Taxes Tribunal Patna
UP Trade Tax Act Sales Tax 32.85 1977-1978 Allahabad High Court
UP Trade Tax Act Sales Tax 60.93 2000-2001 Allahabad High Court
UP Trade Tax Act Sales Tax 41.45 2001-2002 Tribunal Ghaziabad
UP Trade Tax Act Sales Tax 70.05 2001-2002 Allahabad High Court

8. In our opinion and according to the information and explanation given to us theCompany has not defaulted in repayments of loans and borrowings from any financialinstitution banks government or debenture holders during the year.

9. The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments).The term loan raised by the company was applied for thepurpose for which it was raised.

10. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us no fraud by the Company orfraud on the Company by its officers or employees has been noticed or reported during theyear.

11. The Company has paid/provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V of theAct. 12. In our opinion and according to the information and explanation given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

13. Based on our audit procedures and as per the information and explanations given bythe management transactions with the related parties are in compliance with sections 177and 188 of the Act where applicable and details of such transactions have beendisclosed inthe financial statements as required by the applicable accounting standards.

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

15. Based on our audit procedures and as per the information and explanations given bythe management the Company has not entered into non-cash transactions with directors orpersons connected with them. Accordingly paragraph 3(xv) of the Order is not applicable.

16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For SURESH SURANA & ASSOCIATES LLP

Chartered Accountants Firm’s Registration No. 121750 W / W-100010

(Rahul Singhal)
Place : New Delhi PARTNER
Dated : 28 May 2019 Membership No. 096570

ANNEXURE B TO INDEPENDENT AUDITORS’ REPORT

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of ModiRubber Limited ("the Company") as on 31 March 2019 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI’). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company’s policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor’s judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company’s internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For SURESH SURANA & ASSOCIATES LLP
Chartered Accountants
Firm’s Registration No. 121750 W / W-100010
(Rahul Singhal)
Place : New Delhi PARTNER
Dated : 28 May 2019 Membership No. 096570


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