Mar 31, 2017
INDEPENDENT AUDITORS'' REPORT
To
The Members of Bhushan Steel Ltd.
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Bhushan Steel Ltd. ("the Company"), which comprise the Balance Sheet as at 31st March, 2017, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (herein after referred to as "Standalone Ind AS Financial Statements).
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 or loss (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 (Ind AS) prescribed under section 133 of the Act read with rules issued there under.
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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Board of Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Basis of Qualified Opinion
The Supreme Court of India, vide its order dated 24.09.2014, cancelled number of coal blocks allocated to various entities, which includes one coal block allocated to the company, which was under development. Subsequently, the Government of India has issued the Coal Mines (Special Provision) Act, 2015, which inter-alia deal with the payment of compensation to the effected parties in regard to investment in the coal blocks.
No effect has been taken on the value of investment made by the company in the de-allocated coal blocks amounting to ''56289.96 lacs (including expenditure incurred of ''13546.46 lacs and advance given of ''42743.50 lacs). In the opinion of the management, the company will receive back the payments / expenditure paid / made, including borrowing cost and other incidental expenditure, relating to de-allocated coal block. The company has filed its claim for compensation with the Government of India, Ministry of Coal. Subsequently, the company has filed a petition before the Hon''ble Delhi High Court for early recovery of amount, in which notice has been issued to the Union of India and the matter is still pending for disposal.
We are unable to comment on the impact on the value of investment made by the company in the de-allocated coal blocks and their consequent impact on the losses for the financial year ended March 31, 2017.
Qualified Opinion
In our opinion, and to the best of our information and according to the explanations given to us, except for the matter described in the Basis of Qualified Opinion paragraph above, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the state of affairs of the Company as at 31st March, 2017, and its loss (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter
1. We draw attention on Note No. 50 to the Ind AS financial statements, which indicates that the company has negative net worth as at
31.03.2017. Further, it has incurred net cash losses of ''2,43,278 lacs in the current financial year and ''2,46,462 lacs in the immediate preceding financial year. The current liabilities of the company exceeded its current assets as at the balance sheet date by ''21,74,381 lacs. These conditions may cast doubt about the Company''s ability to continue as a going concern. However, the financial statements of the company are prepared on a going concern basis for the reasons stated in the said Note.
2. Indian Accounting Standard (Ind AS) - 101 requires to provide details of material adjustments relating to Balance Sheet and Statement of Profit and Loss in compliance to all applicable Ind AS in the Equity Reconciliation Statement as on 01.04.2015 and 31.03.2016 with respect of reported and restated figures; the company has disclosed net effect of these adjustments due to transition to Ind AS in the Equity Reconciliation Statement. (Refer Note No. 45 to the Ind AS financial statements)
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("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, we report that:
(a) We have sought and except for the possible effect of the matter described in the Basis of Qualified Opinion paragraph above, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of
our audit;
(b) Except for the possible effect of the matter described in the Basis of Qualified Opinion paragraph above, in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
(c) The Balance Sheet, Statement of Profit and Loss including other Comprehensive Income, the statement of cash flows and the statement of changes in equity dealt with by this Report are in agreement with the books of account;
(d) Except for the possible effect of the matter described in the Basis of Qualified Opinion paragraph above, in our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under section 133 of the Act read with Rules issued there under;
(e) The matters described in the ''Basis of Qualified Opinion'' and ''Emphasis of Matter'' paragraphs above, in our opinion may have an adverse effect on the functioning of the Company;
(f) On the basis of written representations received from the directors as on March 31, 2017, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, from being appointed as a director in terms of sub-section
(2) of Section 164 of the Act; whereas in fact, the company has defaulted in redeeming certain debentures on due date and in payment of interest thereon. However, according to information and explanations given to us, LIC has shown its willingness to restructure it as per S4A scheme of RBI vide its letter dated 12.04.2017. Meanwhile as per directions of RBI dated 13.06.2017, the lenders are considering to refer the matter of restructuring of borrowings to National Company Law Tribunal (NCLT) for final resolution.
(g) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the basis of Qualified Opinion paragraph above;
(h) 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"; and
(i) with respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. the Company has disclosed the impact of pending litigations on its financial position in its standalone Ind As financial Statements - Refer Note - 42 to the standalone Ind AS financial statements;
ii. the company has made provisions, as required under applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note - 43 to the standalone Ind AS financial statements;
iii. there has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Company; and
iv. the Company has provided requisite disclosures in its standalone Ind AS financial statements as regards to holdings as well as dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dt. 8th November, 2016 of the Ministry of Finance, during the period from 8th November, 2016 to 30th December, 2016. Based on audit procedure performed and the representation provided to us by the management, we report that the disclosure are in accordance with the books of account maintained by the Company as produced to us by the management. - Refer Note 11 to the standalone Ind AS financial statements.
The Annexure ''A'' referred to in our Independent Auditors'' Report to the members of the Company on the standalone Ind AS financial statements of Bhushan Steel Ltd. for the year ended 31st March, 2017, we report that:
(i) In respect of its property, plant and equipment:
(a) The Company is maintaining proper records showing full particulars including quantitative details and situation of property, plant and equipment on the basis of available information;
(b) The property, plant and equipment covering significant value were physically verified during the year by the management at such intervals which in our opinion, provides for the physical verification of all the property, plant and equipment at reasonable intervals having regard to the size of the Company and nature of its business. According to the information and explanations given to us, no material discrepancies were noticed on such verification;
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of company except in respect of guest house building at Mumbai having Gross block of Rs,74.00 lacs and Net block of Rs,65.64 lacs as at 31st March, 2017.
(ii) According to the information and explanations given to us, the inventory of finished goods, semi-finished goods and raw material at works were, during the year physically verified by the management. In respect of stores spare and stock at yards in the custody of the third party and stock in transit were verified with the confirmation or statement of account or correspondence of the third parties or certification by management or reports of inspection and different audits carried out by the banks. In our opinion and according to the information and explanations given to us, the interval of such physical verification is reasonable having regard to the size of the Company and nature of its business and according to the information and explanations given to us, no material discrepancies were noticed on such verification.
(iii) According to the information and explanations given to us, the Company has not granted secured or unsecured loan to a company, firm, LLP or other entity covered in the register maintained under Section 189 of the Companies Act, 2013. Accordingly, the provisions of sub-paragraph (a) and (b) of the Order are not applicable.
(iv) In our opinion and according to the information and explanations given to us, the Company has generally complied with the provisions of section 185 and 186 of Companies Act, 2013 with respect to the loans, investments, guarantees and security.
(v) According to the information and explanations given to us, the Company has not accepted any deposits during the year. Hence, the directives issued by the Reserve Bank of India and the provisions of section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there-under are not applicable to the Company.
(vi) In our opinion and according to the information and explanations given to us, specified accounts and records as prescribed by the Central Government in terms of sub-section (1) of section 148 of the Companies Act, 2013 have been prima facie made and maintained by the company. However, we have not, nor we are required, carried out any detailed examination of such accounts and records.
(vii) (a) According to the information and explanations given to us and
on the basis of our examination of the records, the Company has generally been regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of customs, value added tax, cess and any other material statutory dues with some delays to the appropriate authorities to the extent these are applicable except deposit of duty of excise, where payment is continuously irregular.
According to the information and explanations given to us, no undisputed dues were in arrears as at 31st March, 2017 for a period of more than six months from the date they become payable except dues of excise including interest of Rs,9,861.41 lacs and electricity duty of Rs,399.21 lacs.
(b) According to the information and explanations given to us, the following dues of sales tax, duty of excise, service tax, value added tax and other statutory dues have not been deposited by the Company on account of disputes:
Name of the Statute |
Nature of Dues |
Amount (Rs, In Lacs) |
Period to which the amount pertains |
Forum where the dispute is pending |
The Central Excise Act, 1944 |
Excise Duty |
55.80 |
April,2010 -March,2013 |
Commissioner (Appeals) |
133.83 |
April,2011-March,2015 |
Commissioner of Central Excise, Ghaziabad |
||
15.20 |
April,2013-June,2014 |
Commissioner (Appeals), Noida |
||
1.48 |
May,1998-October,1998 |
Supreme Court |
||
20,506.35 |
Aug''05 to Jul'' 09, Aug ''09 to Mar''10, Apr''09 to Jan''10 & Apr''10 to Jan''11 |
CESTAT, Kolkata |
||
24.79 |
Feb''10 to Nov''11, Apr''10 to Jan''11 & Apr''08 to Mar''11 |
Commissioner (Appeals), Bhubaneswar |
||
531.87 |
July''13-March''14 |
Commissioner of Central Excise , Raigad |
||
0.86 |
June,2001-July,2001 |
Allahabad High Court |
||
2,491.95 |
2006-2007, 2009-2010, & April,2006-Mar,2009 |
CESTAT, New Delhi |
||
Custom Act, 1962 |
Custom Duty |
371.80 |
30th Jun''2009, 2009-10 |
Commissioner of Custom, Vizag |
Finance Act, 1994 [Service Tax Provisions] |
Service Tax |
5,532.51 |
Dec''05 to Aug''08, Oct''09 to Sep''10 |
CESTAT, Kolkata |
4.41 |
2006-07 to 2007-08 & Mar''11 |
Commissioner (Appeal), Bhubaneswar |
||
52.33 |
Dec''04-Nov''07 |
Commissioner of Central Excise , Raigad |
Name of the Statute |
Nature of Dues |
Amount (Rs, In Lacs) |
Period to which the amount pertains |
Forum where the dispute is pending |
Uttar Pradesh Tax on entry of goods into Local Areas Act,2007 |
Entry Tax |
25.30 |
2000-01 |
High Court of Allahabad |
31451.22 |
2007-2008,2008-2009,2012-2013 & 2013-2014 |
Additional Commissioner (Appeal), Ghaziabad |
||
Odisha Entry Tax Act, 1999 |
Entry Tax |
44,295.33 |
Dec''07 to Mar''12 |
Supreme Court |
3,983.71 |
Apr''05 to Jan''08 & Apr''10 to Mar''12 |
Addl. Commissioner of Sales Tax (Appeal), Cuttack |
||
Sales Tax Acts of various States |
Local Sales Tax |
47,136.88 |
Apr''05 to Mar''12 |
Orissa High Court at Cuttack |
49.92 |
July''06 to Nov''10 |
Additional Commissioner of Sales Tax (Appeals) Cuttack |
||
2875.07 |
2011-2012,2012-2013,2013-2014, Apr''14-October,2014 |
Allahabad High Court |
||
8484.69 |
January,2008-March,2008,2008-2009 2010-2011 & April,2016- June, 2016,2015-2016 |
Additional Commissioner (Appeal), Ghaziabad |
||
15,390.19 |
2012-2013,2013-2014 |
Assessing Authority |
||
45.97 |
2006-2007 |
Additional Commissioner (Appeal), Ghaziabad |
||
82.69 |
1991-1992 &2007-2008 |
Tradetax Tribunal Ghaziabad |
||
Central Sales Tax Act,1956 |
CST |
327.06 |
2006-2007 |
Additional Commissioner (Appeal), Ghaziabad |
26,844.21 |
2012-2013 & 2013-2014 |
Assessing Authority |
||
182.42 |
2007-2008 |
Tradetax Tribunal Ghaziabad |
||
6253.66 |
January,2008-March,2008, 20082009,2010-2011 |
Additional Commissioner (Appeal), Ghaziabad |
||
10,927.13 |
June,2014-June,2015 |
Commercial Tax Tribunal |
||
2,083.55 |
2002-03, 2003-04,2004-2005 & April,2006 to October,2006 |
High Court of Allahabad |
||
Orissa Minor Minerals Concession Rules, 2004 |
Royalty |
5,434.74 |
2006-2014 |
Odisha High Court |
Income Tax Act,1961 |
Income Tax |
11,694.20 |
2008-2009,2009-2010,2012 2013,2013-2014,2014-2015 |
Commissioner of Income Tax (Appeals) |
(viii) Based on our audit procedure and according to the information and explanations given to us, we are of the opinion that the Company has defaulted in repayment of loans / borrowings to the financial institutions, banks, Government or debenture holders as per details given here-under:
Particulars |
Amount of Default as on Balance Sheet Date (Rs, in lacs) Principal Interest |
Maximum Period of Default (in Days) Principal Interest |
|||
(i) Name of the Lenders : In case of : |
|||||
A. Banks (INR loans) |
|||||
1 |
Allahabad Bank |
- |
13,555.89 |
- |
426 |
2 |
Andhra Bank |
1,087.50 |
5,776.54 |
366 |
427 |
3 |
Axis Bank |
50.00 |
16,007.46 |
275 |
366 |
4 |
Bank of Baroda |
300.00 |
15,074.04 |
275 |
488 |
5 |
Bank of India |
31,143.00 |
22,623.52 |
428 |
460 |
6 |
The Bank of Tokyo-Mitsubishi UFJ Ltd. |
365.00 |
1,040.01 |
91 |
367 |
7 |
Bank of Maharashtra |
- |
17,878.40 |
- |
488 |
8 |
Canara Bank |
1,550.00 |
16,706.22 |
366 |
458 |
9 |
Central bank of India |
- |
17,287.83 |
- |
518 |
10 |
Corporation bank |
- |
10,505.93 |
- |
366 |
11 |
Dena Bank |
2,084.86 |
7,067.85 |
275 |
426 |
12 |
ICICI Bank |
374.72 |
5,862.08 |
351 |
276 |
13 |
Indian Bank |
- |
9,247.58 |
- |
457 |
14 |
Indian Overseas Bank |
- |
6,569.76 |
- |
518 |
15 |
Jammu & Kashmir Bank |
- |
10,069.69 |
- |
518 |
16 |
Karur Vyasa Bank Limited |
- |
1,332.46 |
- |
244 |
Particulars |
Amount of Default as on Balance Sheet |
Maximum Period of Default |
|||
Date (Rs, in lacs) |
(in Days) |
||||
Principal |
Interest |
Principal |
Interest |
||
17 |
Lakshmi Vilas Bank |
- |
108.03 |
- |
60 |
18 |
Oriental Bank of Commerce |
225.00 |
14,210.14 |
275 |
457 |
19 |
Punjab & Sind Bank |
1,785.71 |
10,303.99 |
365 |
518 |
20 |
Punjab National Bank |
- |
15,548.53 |
- |
518 |
21 |
Saraswat Co-operative Bank |
- |
2,607.20 |
- |
366 |
22 |
State Bank of Bikaner and Jaipur |
237.50 |
1,083.38 |
91 |
91 |
23 |
State Bank of India |
6,750.00 |
22,873.05 |
366 |
426 |
24 |
State Bank of Hyderabad |
1,325.00 |
8,713.12 |
366 |
426 |
25 |
State Bank of Mysore |
4,836.00 |
5,007.80 |
511 |
305 |
26 |
State Bank of Patiala |
1,700.00 |
12,496.46 |
366 |
397 |
27 |
State Bank of Travancore |
1,087.50 |
6,913.34 |
366 |
397 |
28 |
South Indian Bank |
- |
467.09 |
- |
91 |
29 |
Syndicate Bank |
400.00 |
18,626.93 |
275 |
488 |
30 |
UCO Bank |
- |
13,080.99 |
- |
426 |
31 |
Union Bank of India |
200.00 |
11,809.25 |
275 |
518 |
32 |
United Bank of India |
- |
10,190.42 |
- |
610 |
33 |
Vijaya Bank |
- |
5,895.18 |
- |
518 |
Total (A) |
55,501.79 |
3,36,540.16 |
|||
B. Foreign Currency Loans |
|||||
1 |
AXIS Bank |
- |
1,459.95 |
- |
411 |
2 |
Credit Agricole Corporate and Investment Bank |
5,511.03 |
0.65 |
1,027 |
75 |
3 |
Deutsche Zentral Genossenschafts Bank |
26,872.23 |
- |
1128 |
- |
4 |
Deutsche Bank |
9,963.04 |
329.99 |
549 |
183 |
5 |
DBS Bank |
- |
1,099.06 |
- |
369 |
6 |
HSH Nordbank |
42,063.69 |
462.67 |
1,158 |
1,158 |
7 |
ICICI Bank |
8,034.60 |
5,245.92 |
241 |
367 |
8 |
ING Bank |
270.02 |
0.34 |
1,006 |
- |
9 |
State Bank of India (Consortium) |
24,557.62 |
19,726.72 |
489 |
489 |
Total (B) |
1,17,272.23 |
28,325.30 |
|||
C. |
Financial Institutions |
||||
1 |
EXIM Bank |
- |
4,602.84 |
- |
367 |
2 |
Industrial Development Bank of India |
3,925.00 |
21,881.34 |
456 |
518 |
3 |
Industrial Financial Corporation of India |
438.50 |
3,515.97 |
238 |
214 |
4 |
DBS Bank |
3,333.33 |
2,102.77 |
366 |
426 |
5 |
L&T Finance Ltd |
- |
185.70 |
- |
60 |
6 |
SICOM Ltd. |
- |
0.62 |
- |
1 |
7 |
STCI Finance Ltd |
- |
194.19 |
- |
32 |
Total (C) |
7,696.83 |
32,483.43 |
|||
(ii) Secured Debentures |
29,078.01 |
37,848.27 |
231 |
840 |
|
Total (D) |
29,078.01 |
37,848.27 |
|||
Grand Total (A B C D) |
2,09,548.86 |
4,35,197.16 |
The Company is enjoying working capital facility (funded and nonfunded) and there is outstanding balance of Rs,13,02,454.78 lacs as at 31st March, 2017 against which, interest of Rs,1,28,246.42 lacs is overdue.
(ix) According to the information and explanations given to us, the Company has raised money by way of term loans during the year and to the best of our knowledge and according to the information and explanations given to us, the amount received by means of these loans have been pooled and utilized through Trust Retention Account (TRA) maintained by State Bank of India, the lead banker, on behalf of all other consortium members.
(x) To the best of our knowledge and according to the information and explanations given to us, no material fraud by the company or on the Company by its officers or employees has been noticed or reported during the course of our audit.
(xi) According to our information and explanations given to us and based on our examination of the records of the Company, managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act except the payment of leave encashment, provident fund and taxable car perquisites for which clarification sought by the management from Central Government is awaited. (Refer Note - 54 to the standalone Ind AS financial statements)
(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, para 3 (xii) of the Order is not applicable to the Company.
(xiii) According to the information and explanations given to us and based on our examination of the records of the company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the standalone Ind AS financial statement as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and based on our examination of the records of the company, the company has made private placement of redeemable cumulative preference shares during the year under review and in our opinion, the requirement of section 42 of the Act have been complied with and the amount raised have been used for the purposes for which the funds were raised.
(xv) According to the information and explanations given to us and based on our examination of the records of the company, the company has not entered into non-cash transactions with directors or persons connected with him.
(xvi) As per our information, the company is not required to be registered under Section 45-1A of the Reserve Bank of India Act, 1934.
Annexure - B to the Auditors'' Report
Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Bhushan Steel Limited ("the Company") as of 31st March 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 (''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.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of 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 financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial 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, to the best of our information and according to the explanation given to us, 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 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.
For MEHRA GOEL & CO. For MEHROTRA & MEHROTRA
Chartered Accountants Chartered Accountants
(FRN:000517N) (FRN:000226C)
sd/- sd/-
R.K. Mehra M.P. Mehrotra
Partner Partner
M. No: 006102 M. No : 005699
Place: New Delhi
Dated: 5th July, 2017
Mar 31, 2015
We have audited the accompanying standalone financial statements of
Bhushan Steel Limited ("the Company"), which comprises 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 significant
accounting policies and other explanatory information for the year then
ended.
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 the assets of the Company and
for preventing and detecting frauds and other irregularities, selection
and application of appropriate accounting policies, making judgments
and estimates that are reasonable and prudent, and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
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 disclosures in the financial statements. The procedures
selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company's
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on
whether the Company has in place an adequate Internal financial control
system over financial reporting and the operating effectiveness of such
controls. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by the Company's Directors, as well as evaluating the
overall presentation ofthe financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Basis of Qualified Opinion
The Supreme Court of India,vide its order dated 24/09/2014, cancelled
number of coal blocks allocated to various entities which includes one
coal block allocated to the company and one of its associated company,
which were under development. Subsequently, the Government of India
has issued the Coal Mines (Special Provision) Act, 2015, which
inter-alia deal with the payment of compensation to the effected
parties in regard to investment in the coal blocks.
No effect has been taken on the value of investment made by the company
in the de-allocated coal blocks amounting to Rs. 56289.96 Lacs
(including expenditure incurred Rs. 13546.46 Lacs and advance given Rs.
42743.50 Lacs) and Rs. 666.00 Lacs in Equity shares/ advance for share
capital in the associated company whose coal blocks have been
de-allocated. In the opinion of the management the Company/associated
company will receive back the payments/expenditure paid/ made,
including borrowing cost and other incidental expenditure,relating to
de-allocated coal blocks.
We are unable to comment on the impact on the value of investment made
by the company and its associate in the de-allocated coal blocks and
their consequent impact on the Losses for the financial year ended
March 31, 2015.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the matter described in the Basis
of Qualified Opinion paragraph above, the aforesaid standalone
financial statements give the information required by the Act in the
manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India, ofthe state of
affairs of the Company as at 31st March, 2015, and its loss and its
cash flows for the year ended on that date.
Emphasis of Matter
a) We draw attention to Note 50 to the financial statements that the
managerial remuneration paid for the current financial year is subject
to approval of Central Government.
b) We draw attention to Note 48 to the financial statements that in
accordance with "5/25" scheme of Reserve Bank of India, the consortium
of banks led by State Bank of India as lead Bank has allowed flexible
structuring of long term loans by aligning their debt repayment
obligations with cash flow generated during their economic life.
Pending approval ofthe scheme by the authorities of respective
consortium banks, the company has classified long term borrowings
maturity period in accordance with the said scheme.
Our opinion is not modified in respect of above matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section 11 of section 143 of the Act, we give in the Annexure a
statement on the matters specified in 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, except for the possible effect ofthe matter
described in the Basis of Qualified Opinion paragraph above, obtained
all the information and explanations which to the best of our knowledge
and belief were necessary for the purpose of our audit;
b. Except for the possible effect of the matter described in the Basis
of Qualified Opinion paragraph above, in our opinion proper books of
account as required by law have been kept by the Company so far as
appears from our examination of those books;
c. The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. Except for the possible effect of the matter described in the Basis
of Qualified Opinion paragraph above, in our opinion, the aforesaid
standalone financial statement comply with the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014;
e. The matters described in the 'Basis for Qualified Opinion' and
'Emphasis of Matter' paragraphs above, in our opinion may have an
adverse effect on the functioning of the Company;
f. On the basis of written representations received from the directors
as on March 31, 2015, and 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. The qualification relating to the maintenance of accounts and other
matters connected therewith are as stated in the Basis of Qualified
Opinion paragraph above; and
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 has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note -29 to the
financial statements.
ii The Company has made provision, as required under applicable law or
accounting standards, for material foreseeable losses, if any, on
long-term contracts including derivative contracts. - Refer Note - 52
to the financial statements.
iii There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
ANNEXURE
(Referred to in paragraph 1 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 covering significant value were physically verified
during the year by the Management at such intervals which in our
opinion, provides for the physical verification of all the Fixed Assets
at reasonable interval having regard to the size of the Company and
nature of its business. According to the information and explanations
given to us by the Management, no material discrepancies have been
noticed on such verification.
ii) In Respect of its Inventory :
a) As per information and explanations given to us, the inventory of
finished goods, semi-finished goods and raw material at works were,
during the year, physically verified by the management. In respect of
Stores and Spare Parts and stock at yards in the custody of the third
party and stocks in transit were verified with the confirmation or
statement of account or correspondence of the third parties or
subsequent receipt of goods.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories of
the Company followed by the Management are reasonable and adequate in
relation to the size of the Company and 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, no material discrepancies were noticed on such physical
verification.
iii) In our opinion and according to information and explanations given
to us, the company has not granted any loans, secured or unsecured to
companies, firms or other parties listed in the register maintained
under Section 189 ofthe Companies Act, 2013.
iv) In our opinion and according to the information and explanations
given to us, having regard to explanation that some of the items
purchased are of special nature and suitable alternative sources are
not readily available for obtaining comparable quotations, there is an
adequate internal control system commensurate with the size of the
company and the nature of its business with regard to the purchase of
inventory, fixed assets and for the sale of goods and services. During
the course of our Audit we have not observed any continuing failure to
correct major weaknesses in such internal control system.
v) To the best of our knowledge, the company has not accepted any
deposits covered under section 73 or any other provisions of the
Companies Act, 2013.
vi) To the best of our knowledge, the Central Government has prescribed
the maintenance of cost records under Section 148 (1) of the Companies
Act, 2013, which have been maintained by the company and these have
been broadly reviewed by us and we are ofthe opinion that, prima facie,
the prescribed accounts and records have been made and maintained.
However, we have not, nor we are required, carried out any detailed
examination of such accounts and records.
vii) According to the information and explanations given to us, in
respect of statutory dues :
a) The Company has generally been regular in depositing undisputed dues
including Provident Fund, Investors' Education and Protection Fund,
Employees' State Insurance, Income Tax, Sales Tax, Value Added Tax,
Wealth Tax, Duty of Custom, Duty of Excise, Cess, Service Tax and any
other statutory dues applicable to it with the appropriate authorities
and there were no undisputed dues in arrears as at 31st March, 2015 for
a period of more than six months from the date they become payable.
b) The disputed statutory dues of income tax or sales tax or wealth tax
or service tax or duty of customs or duty of excise or value added tax
or cess aggregating Rs. 96723.64 Lacs (net of paid under protest) that
have not been deposited on account of disputed matters pending before
appropriate authorities are as under:
Name of the Statute Nature of Period to which the amount
Dues pertains
The Central Excise Excise Duty Apr.'98&0ct.2000 to Nov.2000
Act, 1944
Aug'05 to Jul'09, Aug'09 to
Mar'10, Apr'09 to
Jan'10 & Apr'10 to Jan'11
Feb'10 to Nov'11, Apr'10 to
Jan'11 & Apr'08 to Mar'11
F.Y. 2001-2002, Mar'05 to
Jan'10, Jul'01 to Mar'06,
Apr'06 to Mar'09, 2006-07 to
2009-10, Oct'96 to Sep'00,
Oct'00 to Dec'00, May'08 to
Mar'09, Mar'05 to Jan'10 &
Apr'11 to Nov'11
Apr'12 to Mar'13
Oct'03 to Sep'05, 2001-02 &
Feb'07 to Dec'll
Jan'12 to Oct'12
Custom Act, 1962 Custom Duty 30th Jun'2009, 2009-10
Finance Act,1994 Service Tax Dec'05 to Aug'08, Oct'09
(Service Tax to Sep'10
Provisions)
2006-07 to 2007-08 & Mar'll
Dec'04 to Nov'07
Income Tax Act, 1961 Income Tax 2005-06, 2006-07, 2008-09,
2009-10
Sales Tax Acts of Local Sales Apr'05 to Mar'12
various states Tax
2002-03, 2003-04, 2004-05,
Apr'06 to Oct'06 & 2006-07
2005-06, Oct'08 & Sep'08,
2006-07, Jan'13 to Mar'13,
Jan'08 to Mar'08, Apr'13 to
Nov'13, 2007- 08, 2008-09 &
2009-10,Jan'15
1991-92, 2007-08
Dec'13, Jan'14 to Mar'14
Apr'14, May'14
Central Sales Central Sales 2002-03, 2003-04, 2004-05,
Tax Act, 1956 Tax Apr'06 to Oct'06 & 2006-07
2005-06, 2006-07, Jan'08 to
Mar'08, 2007-08, 2008- 09 &
2009-10 & Jul'06 to Nov'10
2007-08
Uttar Pradesh Entry Tax 1995-96
Tax on Entry of
Goods into Local 2004-05
Tax Act,1999
Act, 2007 2006-07 & 2007-08
Odisha Entry Entry Tax Dec'07 to Mar'12
Tax Act,1999
Apr'05 to Jan'08 & Apr'10
to Mar'12
Orissa Minor Royalty -
Minerals
Concession
Rules, 2004
Name of the Statute Amount Forum where the dispute is
(Rs. In pending
Lacs)
The Central Excise 0.26 High Court of Allahabad
Act, 1944
14357.21 CESTAT, Kolkata
70.04 Commissioner (Appeal),
Bhubaneswar
3388.14 CESTAT, New Delhi
243.99 Commissioner (Appeal),
Ghaziabad
413.76 CESTAT
26.66 Commissioner Excise
Appeals Zone II
Custom Act, 1962 246.41 Commissioner of Custom, Vizag
Finance Act,1994 3633.47 CESTAT, Kolkata
(Service Tax
Provisions) 109.14 Commissioner (Appeal),
Bhubaneswar
52.33 CESTAT
Income Tax Act, 1961 6106.48 Commissioner of Income Tax
(Appeals)
Sales Tax Acts of 11112.54 Orissa High Court at Cuttack
various states
444.85 High Court of Allahabad
12699.11 Additional Commissioner(Appeal)
106.28 Trade Tax Tribunal
754.41 Commissioner Commercial(Appeal)
362.48 Joint Commissioner (Appeal)
Central Sales 2151.22 High Court of Allahabad
Tax Act, 1956
8567.35 Additional Commissioner (Appeal)
257.26 Trade Tax Tribunal
Uttar Pradesh 7.66 High Court of Allahabad
Tax on Entry of
Goods into Local 384.71 Supreme Court
Tax Act,1999
Act, 2007 6815.81 Additional Commissioner(Appeal)
Odisha Entry 19937.61 Supreme Court
Tax Act,1999
2778.37 Additional Commissioner of
Sales Tax (Appeal) Cuttack
Orissa Minor 1696.09 Orissa High Court
Minerals
Concession
Rules, 2004
c) The company has transferred the amount required to be transferred to
Investors' Education and Protection Fund in accordance with the
relevant provisions of the Companies Act, 1956 (1 to 1956) and rules
made thereunder within time.
viii) The Company has no accumulated losses, but has incurred cash loss
during the financial year covered by our Audit. The Company has not
incurred any cash loss in the immediate preceding financial year.
ix) In our opinion and according to the information and explanations
given to us, there were delays in repayment of term loans and interest
not resulting in default of repayment of dues to Financial Institutions
or Banks or Debenture holders.
x) To the best of our knowledge and according to the information and
explanations given to us, the Company has not given any guarantee for
loans taken by others from Banks / Financial Institutions.
xi) To the best of our knowledge and according to the information and
explanations given to us, the term loans were applied for the
purpose for which the loans were obtained, other than temporary
deployment pending actual application.
xii) Based upon the audit procedure performed and information and
explanations given by the Management, we report that no fraud on or by
the Company has been noticed or reported during the year.
For MEHRA GOEL & CO. For MEHROTRA & MEHROTRA
Chartered Accountants Chartered Accountants
Registration No.: 000517N Registration No.: 000226C
Sd/- Sd/-
R.K. Mehra M.P. Mehrotra
Partner Partner
M. NO.: 006102 M. NO. : 005699
Place: New Delhi
Dated: 27th May, 2015
Mar 31, 2014
We have audited the accompanying financial statements of Bhushan Steel
Limited ("the Company"), which comprise the Balance Sheet as at March
31, 2014 and the Statement of profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
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 sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act") read with General Circular
15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs
in respect of section 133 of the Companies Act, 2013. 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 disclosures in the financial statements. The procedures
selected depend on the auditor''s judgement, 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 accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is suffcient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the 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 March 31, 2014;
(b) in the case of the Statement of profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of sub-
section (4A) of section 227 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 purpose of our
audit;
b. In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. The Balance Sheet, the Statement of profit and Loss and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account;
d. In our opinion, the Balance Sheet, the Statement of profit and Loss,
and the Cash Flow Statement comply with the Accounting Standards
referred to in subsection (3C) of section 211 of the Companies Act,
1956 read with General Circular 15/2013 dated 13th September, 2013 of
the Ministry of Corporate Affairs in respect of section 133 of the
Companies Act, 2013; and
e. On the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
ANNEXURE
(Referred to in paragraph 1 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 covering significant value were physically verifed
during the year by the Management at such intervals which in our
opinion, provides for the physical verifcation of all the Fixed Assets
at reasonable interval having regard to the size of the Company and
nature of its business. According to the information and explanations
given to us by the Management, no material discrepancies have been
noticed on such verifcation.
c) No substantial parts of fixed assets have been disposed off during
the year.
ii) In Respect of its Inventory :
a) As per information and explanations given to us, the inventory of
fnished goods, semi-fnished goods and raw material at works were,
during the year, physically verifed by the management. In respect of
Stores and Spare Parts and stock at yards in the custody of the third
party and stocks in transit were verifed with the confirmation or
statement of account or correspondence of the third parties or
subsequent receipt of goods.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verifcation of inventories of
the Company followed by the Management are reasonable and adequate in
relation to the size of the Company and 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, no material discrepancies were noticed on such physical
verifcation.
iii) In our opinion and according to information and explanations given
to us, the company has not taken / granted any loans, secured or
unsecured from / to companies, firms or other parties listed 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, having regard to explanation that some of the items
purchased are of special nature and suitable alternative sources are
not readily available for obtaining comparable quotations, there is an
adequate internal control system commensurate with the size of the
company and the nature of its business with regard to the purchase of
inventory, fixed assets and for the sale of goods and services. During
the course of our Audit we have not observed any continuing failure to
correct major weaknesses in such internal control system.
v) In respect of contracts or arrangements entered in the register
maintained in pursuance of Section 301 of Companies Act, 1956, to the
best of our knowledge and belief and according to the information and
explanations given to us :- a) The particular of contracts or
arrangements referred to Section
301 that needed to be entered in the register maintained under
the said Section have been so entered.
b) Where each of such transaction is in excess of Rs.5 Lacs in respect of
any party, the transaction have been made at a price which are prima
facie reasonable having regard to the prevailing market prices at the
relevant time.
vi) To the best of our knowledge, the company has not accepted any
deposits covered under section 58A and 58AA or any other provisions of
the Companies Act, 1956.
vii) In our opinion, the Company has an adequate internal audit system
commensurate with its size and the nature of its business.
viii) To the best of our knowledge, the Central Government has
prescribed the maintenance of cost records under Section 209 (1) (d) of
the Companies Act, 1956, which have been maintained by the company and
these have been broadly reviewed by us and we are of the opinion that,
prima facie, the prescribed accounts and records have been made and
maintained. However, we have not, nor we are required, carried out any
detailed examination of such accounts and records.
ix) According to the information and explanations given to us, in
respect of statutory dues :
a) The Company has generally been regular in depositing undisputed dues
including Provident Fund, Investors'' education and Protection Fund,
employees'' State Insurance, Income Tax, Sales Tax/VAT, Wealth Tax,
Custom Duty, excise Duty, Cess, Service Tax and any other statutory
dues applicable to it with the appropriate authorities.
b) There were no undisputed amounts payable in respect of Income Tax,
Wealth Tax, Service Tax, excise Duty, Cess, and other material
statutory dues in arrears as at 31st March, 2014 for a period of more
than six months from the date they become payable.
c) The disputed statutory dues aggregating Rs.79131.59 Lacs (net of paid
under protest) that have not been deposited on account of dispute
matters pending before appropriate authorities are as under :
Name of the Statute Nature of Period to which the amount
Dues pertains
The Central excise excise Duty Apr-May 1998 & Oct. 2000 to Nov.2000
Act1944 Aug''05 to Jul''09, Aug''09 to Mar''10,
Apr''09 to Jan''10 & Apr''10 to Jan''11
Feb''10 to Nov''11, Apr''10 to Jan''11 &
Apr''08 to Mar''11
FY.2001-2002, Mar''05 to Jan''10,Jul''01
to Mar''06, Apr''06 to Mar''09, 2006-07
to 2009-10, Oct''96 to Sep''00, Oct''00
to Dec''00, May''08 to Mar''09, Mar''05
to Jan''10 & Apr''11 to Nov''11
Apr''11 to Feb''12
Oct''03 to Sep''05, 2001-02 & Feb''07
to Dec''11 Jan''12 to Oct''12
Custom Act, 1962 Custom Duty 30th Jun''2009
Finance Act,1994 service tax Dec''05 to Aug''08, Oct''09 to Sep''10
(service tax 2006-07 to 2007-08 & Mar''11
Provisions) 2006-07
Dec''04 to Nov''07
Income Tax Act 1961 income tax 2008-09, 2009-10
Sales Tax Acts of Local Sales Apr''05 to Dec''08
various states tax 2002-03, 2003-04, 2004-05, Apr''06
to Oct''06 & 2006-07
2005-06, Oct''08 & Sep''08, 2006-07,
Jan''13 to Mar''13, Jan''08 to Mar''08,
Apr''13 to Nov''13, 2007-08, 2008-09
& 2009-10
Penalty on 1991-92
Trade tax
Central Sales Tax Act Central 2002-03, 2003-04, 2004-05, Apr''06 to
Sales tax Oct''06 1956 & 2006-07
2005-06, 2006-07, Jan''08 to Mar''08,
2007-08, 2008-09 & 2009-10
Jul''06 to Nov''10
Uttar Pradesh Tax on entry tax 1995-96
entry of Goods into 2004-05
Local Areas Act, 2007
2006-07 & 2007-08
Odisha entry Tax entry tax Dec''07 to Mar''12
Act,1999 Apr''05 to Jan''08
Orissa Minor Minerals Royalty -
Concession Rules, 2004
Name of the Statute Amount Forum where the dispute is pending
(In Lacs)
The Central Excise Act 0.76 High Court of Allahabad
1944 14357.21 CeSTAT, Kolkata
70.04 Commissioner (Appeal), Bhubaneswar
4060.80 CeSTAT, New Delhi
2.32 Commissioner (Appeal), Ghaziabad
1921.00 Cestat
26.66 Commissioner excise Appeals Zone II
Custom Act 1962 198.65 Commissioner of Custom, Vizag
Finance Act 1994 3388.22 CeSTAT, Kolkata
109.14 Commissioner (Appeal), Bhubaneswar
0.23 CeSTAT, New Delhi
52.33 Cestat
Income Tax Act 1961 6115.58 Commissioner of Income Tax
Sales Tax Act 550.98 Orissa High Court at Cuttack
444.85 High Court of Allahabad
9540.19 Additional Commissioner (Appeal)
0.75 Trade Tax Tribunal
Central Sales Tax 2151.22 High Court of Allahabad
Act 1956 7903.58 Additional Commissioner (Appeal)
34.77 Additional Commissioner (Appeal)
Uttar Pradesh Tax 7.66 High Court of Allahabad
384.71 supreme Court
6798.77 Additional Commissioner (Appeal)
Odisha Eantry Tax 19087.28 supreme Court
Act 1999 227.80 Additional Commissioner of Sales Tax
(Appeal) Cuttack
Orissa Minor Minerals 1696.09 Orissa High Court
x) The Company has no accumulated losses and has not incurred any cash
loss during the financial year covered by our Audit and in the immediate
preceding financial year.
xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
Financial Institutions or Banks or Debenture holders.
xii) On the basis of verifcation of accounts and records maintained by
the Company and to the best of our knowledge and belief, the Company
has not granted any loan or advance on the basis of security by way of
pledge of shares, debentures and other securities.
xiii) The Company is not a chit fund / nidhi / mutual benefit fund /
society. Therefore, the provision of clause 4(xiii) of the Companies
(Auditors'' Report) Order, 2003 is not applicable to the Company.
xiv) To the best of our knowledge and according to information given to
us, the Company is not a dealer or trader in securities. The Company
has invested in marketable securities and mutual funds. According to
the information and explanations given to us, proper records have been
maintained of the transactions and contracts, and timely entries have
been made therein. The investments in marketable securities and mutual
funds have been held by the Company in its own name.
xv) To the best of our knowledge and according to the information and
explanations given to us, the Company has not given any guarantee for
loans taken by others from Banks / Financial Institutions.
xvi) To the best of our knowledge and according to the information and
explanations given to us, the term loans were applied for the purpose
for which the loans were obtained, other than temporary deployment
pending application.
xvii) In our opinion and according to the information and explanations
given to us and on an overall examination of Balance Sheet, we report
that funds raised on short term basis have not been used during the
year for long term investments.
xviii) According to the information and explanations given to us, the
Company has made preferential allotment of Preference Shares during the
year to parties and companies covered in the Register maintained under
section 301 of the Companies Act, 1956. In our opinion and according to
information and explanations given to us, the price, at which
Preference Shares have been issued, is not prejudicial to the interest
of the Company.
xix) To the best of our knowledge and according to the information and
explanations given to us, the Company has created securities /
charges as on the date of our report, in respect of Secured Debentures
issued to the satisfaction of the Trustee of the Debentures.
xx) The Company has raised money by way of right issue of equity shares
during the year. We have verifed the end use of monies raised by right
issue of equity shares and the same has been disclosed in Note 31(a).
xxi) Based upon the audit procedure performed and information and
explanations given by the Management, we report that no fraud on or by
the Company has been noticed or reported during the year.
for MEHRA GOEL & CO.
Chartered Accountants
Registration No.: 000517N
Sd/-
R.K. Mehra
partner
M. N0.: 6102
Place: New Delhi
Dated: 30th May, 2014
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Bhushan Steel
Limited ("the Company"), which comprise the Balance Sheet as at March
31, 2013, and the Statement of Profit and Loss and Cash Flow Statement
for the year then ended, and a summary of significant accounting
policies and other explanatory information.
Management''s Responsibility for the Financial Statements
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 sub-section (3C) of section 211
ofthe Companies Act, 1956 ("the Act"). 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 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 ofthe financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness ofaccounting policies used and
the reasonableness ofthe accounting estimates made by 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 audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the 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 March 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the Profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 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 purpose 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 ofthose
books;
c. The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account;
d. In our opinion, the Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement comply with the Accounting Standards
referred to in subsection (3C) of section 211 of the Companies Act,
1956; and
e. On the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
ANNEXURE
(Referred to in paragraph 1 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 covering significant value were physically verified
during the year by the Management at such intervals which in our
opinion, provides for the physical verification of all the Fixed Assets
at reasonable interval having regard to the size of the Company and
nature of its business. According to the information and explanations
given to us by the Management, no material discrepancies have been
noticed on such verification.
c) No substantial parts of fixed assets have been disposed off during
the year.
ii) In Respect of its Inventory :
a) As per information and explanations given to us, the inventory of
finished goods, semi-finished goods and raw material at works were,
during the year, physically verified by the management. In respect of
Stores and Spare Parts and stock at yards in the custody of the third
party and stocks in transit were verified with the confirmation or
statement of account or correspondence of the third parties or
subsequent receipt of goods.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories of
the Company followed by the Management are reasonable and adequate in
relation to the size ofthe Company and 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, no material discrepancies were noticed on such physical
verification.
iii) In our opinion and according to the information and explanations
given to us, the company has not taken / granted any loans, secured or
unsecured from / to companies, firms or other parties listed in the
register maintained under Section 301 ofthe Companies Act, 1956.
iv) In our opinion and according to the information and explanations
given to us, having regard to explanation that some ofthe items
purchased are of special nature and suitable alternative sources are
not readily available for obtaining comparable quotations, there is an
adequate internal control system commensurate with the size of the
company and the nature of its business with regard to the purchase of
inventory, fixed assets and for the sale of goods and services. During
the course of our Audit we have not observed any continuing failure to
correct major weaknesses in such internal control system.
v) In respect of contracts or arrangements entered in the register
maintained in pursuance of Section 301 of Companies Act, 1956, to the
best of our knowledge and belief and according to the information and
explanations given to us :-
a) The particular of contracts or arrangements referred to Section 301
that needed to be entered in the register maintained under the said
Section have been so entered.
b) Where each of such transaction is in excess of Rs.5 Lacs in respect
of any party, the transaction have been made at a price which are prima
facie reasonable having regard to the prevailing market prices at the
relevant time.
vi) To the best of our knowledge, the company has not accepted any
deposits covered under section 58A and 58AA or any other provisions of
the Companies Act, 1956.
vii) In our opinion, the Company has an adequate internal audit system
commensurate with its size and the nature of its business.
viii) To the best of our knowledge, the Central Government has
prescribed the maintenance of cost records under Section 209 (1) (d)
ofthe Companies Act, 1956, which have been maintained by the company
and these have been broadly reviewed by us and we are of the opinion
that, prima facie, the prescribed accounts and records have been made
and maintained. However, we have not, nor we are required, carried out
any detailed examination of such accounts and records.
ix) According to the information and explanations given to us, in
respect of statutory dues :
a) The Company has generally been regular in depositing undisputed dues
including Provident Fund, Investors'' Education and Protection Fund,
Employees''State Insurance, Income Tax, Sales Tax/VAT, Wealth Tax,
Custom Duty, Excise Duty, Cess, Service Tax and any other statutory
dues applicable to it with the appropriate authorities.
b) There were no undisputed amounts payable in respect of Income Tax,
Wealth Tax, Service Tax, Excise Duty, Cess, and other material
statutory dues in arrears as at 31st March, 2013 for a period of more
than six months from the date they become payable.
c) The disputed statutory dues aggregating Rs.44435.13 Lacs (net of
paid under protest) that have not been deposited on account of disputed
matters pending before appropriate authorities are as under:
Name of the Nature of Period to which the amount
pertains
Statute Dues
The Central Excise Excise Duty Apr-May 1998 & Oct. 2000 to
Nov. 2000
Act, 1944 Aug''05 to Jul''09, Aug''09 to
Mar''10, Apr''09 to Jan''10 &
Apr''10 to Jan''11
Feb''10 to Nov''ll, Apr''10 to
Jan''ll & Apr''08 to Mar''ll
F.Y. 2001-2002, Mar''05 to Jan''10,
Jul''01 to Mar''06, Apr''06 to
Mar''09, 2006-07 to 2009-10,
Oct''96 to Sep''00, Oct''00 to
Dec''00, May''08 to Mar''09, Mar''05
to Jan''10 & Apr''ll to Nov''ll
Apr''ll to Feb''12
Oct''03 to Sep''05, 2001-02 &
Feb''07 to Dec''ll
Finance Act,1994 Service Tax Dec''05 to Aug''08, Qct''09 to
Sep''10
(Service Tax Provi- 2006-07to 2007-08&Mar''ll
sions)
2006-07
Dec''04 to Nov''07
Income Tax Act, Income Tax 2007-08
1961
Sales Tax Acts of Local Sales Tax Apr''05 to Dec''08
various states
2002-03, 2003-04, 2004-05,
Apr''06 to Oct''06 & 2006-07
2005-06, 0ct''08 & Sep''08
Penalty on 1991-92
Trade Tax
Central Sales Tax Central Sales 2002-03, 2003-04, 2004-05,
Apr''06 to Oct''06 &
Act, 1956 Tax 2006-07
2005-06
Uttar Pradesh Tax Entry Tax 1995-96
on Entry of Goods
2004-05
into Local Areas
Act, 2007
Odisha Entry Tax Entry Tax Dec''07 to Mar''12
Act, 1999
Apr''05 to Jan''08
Orissa Minor Miner- Royalty -
als Concession
Rules, 2004
Name of the Statute Amount Forum where the
(Rs. In dispute is pending
Lacs)
The Central Excise Act,1944 0.96 High Court of Allahabad
14357.21 CESTAT, Kolkata
70.04 Commissioner (Appeal),
Bhubaneswar
3570.05 CESTAT, New Delhi
3.57 Commissioner (Appeal),
Ghaziabad
1921.00 CESTAT
Finance Act 1994 1699.77 CESTAT, Kolkata
107.63 Commissioner (Appeal),
Bhubaneswar
0.23 CESTAT, New Delhi
52.33 CESTAT
Income Tax Act, 1961 40.90 Commissioner of Income
Tax (Appeals)
Sales Tax Act of various
States 550.98 Orissa High Court at Cuttack
415.98 High Court of Allahabad
90.52 Addl. Commissioner (Appeal)
0.75 Trade Tax Tribunal
Central Sales Tax Act, 1956 2180.08 High Court of Allahabad
391.11 Additional Commissioner
(Appeal)
Uttar Pradesh Tax on Entry
of Goods into Local Areas
Act, 2007 7.66 High Court of Allahabad
384.71 Supreme Court
Odisha Entry Tax Act,1999 16749.44 Supreme Court
144.12 Additional Commissioner of
Sales Tax (Appeal), Cuttack
Orissa Minor Miner als
Concession Rules, 2004 1696.09 Orissa High Court
x) The Company has no accumulated losses and has not incurred any cash
loss during the financial year covered by our Audit and in the
immediate preceding financial year.
xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
Financial Institutions or Banks or Debenture holders.
xii) On the basis of verification of accounts and records maintained by
the Company and to the best of our knowledge and belief, the Company
has not granted any loan or advance on the basis of security by way of
pledge of shares, debentures and other securities.
xiii) The Company is not a chit fund / nidhi / mutual benefit fund /
society. Therefore, the provision of clause 4(xiii) of the Companies
(Auditors'' Report) Order, 2003 is not applicable to the Company.
xiv) To the best of our knowledge and according to information given to
us, the Company is not a dealer or trader in securities. The Company
has invested in marketable securities and mutual funds. According to
the information and explanations given to us, proper records have been
maintained of the transactions and contracts, and timely entries have
been made therein. The investments in marketable securities and mutual
funds have been held by the Company in its own name.
xv) To the best of our knowledge and according to the information and
explanations given to us, the Company has not given any guarantee for
loans taken by others from Banks/ Financial Institutions.
xvi) To the best of our knowledge and according to the information and
explanations given to us, the term loans were applied for the purpose
for which the loans were obtained, other than temporary deployment
pending application.
xvii) In our opinion and according to the information and explanations
given to us and on an overall examination of Balance Sheet, we report
that funds raised on short term basis have not been used during the
year for long term investments.
xviii) According to the information and explanations given to us, the
Company has made preferential allotment of Preference Shares during the
year to parties and companies covered in the Register maintained under
section 301 of the Companies Act, 1956. In our opinion and according to
the information and explanations given to us, the price, at which
Preference Shares have been issued, is not prejudicial to the interest
ofthe Company.
xix) To the best of our knowledge and according to the information and
explanations given to us, the Company has created securities/ charges
as on the date of our report, in respect of Secured Debentures issued
to the satisfaction of the Trustee of the Debentures.
xx) The Company has raised money by way of right issue of equity shares
during the year. We have verified the end use of monies raised by right
issue of equity shares and the same has been disclosed in Note 30(a).
xxi) Based upon the audit procedure performed and the information and
explanations given by the Management, we report that no fraud on or by
the Company has been noticed or reported during the year.
For MEHRA GOEL & CO.
Chartered Accountants
Registration No.: 000517N
Sd/-
R.K. Mehra
Partner
M. N0.: 6102
Place: New Delhi
Dated: 27th May, 2013
Mar 31, 2012
We have audited the attached Balance Sheet of BHUSHAN STEEL LIMITED as
on 31st March, 2012 and also the Statement of Profit and Loss and the
Cash Flow Statement of the Company for the year ended on that date
annexed thereto. 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.
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 the 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, issued
by the Central Government of India in terms of Section 227 (4A) of the
Companies Act, 1956, we enclose in the Annexure, 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 above we report
that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) In our opinion, proper books of account, as required by law have
been kept by the Company, so far as appears from our examination of
those books;
c) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this report are in agreement with the
books of account;
d) In our opinion the accounts, the Balance Sheet, the Statement of
Profit and Loss and the Cash Flow Statement dealt with by the report
comply with the requirements of Accounting Standards referred to in sub
section (3C) of section 211 of the Companies Act, 1956;
e) On the basis of the written representations received from the
Directors as on 31st March, 2012 and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st March, 2012 from being appointed as a Director in terms of clause
(g) of Subsection (1) of Section 274 of the Companies Act, 1956;
f) In our opinion, and to the best of our information and according to
the explanations given to us, the said accounts, give the information
required by the Companies Act, 1956, in the manner so required 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, 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 (Referred to in paragraph 1 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 covering significant value were physically verified
during the year by the Management at such intervals which in our
opinion, provides for the physical verification of all the Fixed Assets
at reasonable interval having regard to the size of the Company and
nature of its business. According to the information and explanations
given to us by the Management, no material discrepancies have been
noticed on such verification.
c) No substantial parts of fixed assets have been disposed off during
the year. ii) In Respect of its Inventory :
a) As per information & explanations given to us, the inventory of
finished goods, semifinished goods and raw material at works were,
during the year, physically verified by the management. In respect of
Stores and Spare Parts and stock at yards in the custody of the third
party and stocks in transit were verified with the confirmation or
statement of account or correspondence of the third parties or
subsequent receipt of goods.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories of
the Company followed by the Management are reasonable and adequate in
relation to the size of the Company and 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, no material discrepancies were noticed on such physical
verification.
iii) In our opinion and according to information & explanations given
to us, the company has not taken/granted any loans, secured or
unsecured from / to companies, firms or other parties listed 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, having regard to explanation that some of the items
purchased are of special nature and suitable alternative sources are
not readily available for obtaining comparable quotations, there is an
adequate internal control system commensurate with the size of the
company and the nature of its business with regard to the purchase of
inventory, fixed assets and for the sale of goods and services. During
the course of our Audit we have not observed any continuing failure to
correct major weaknesses in such internal control system.
v) In respect of contracts or arrangements entered in the register
maintained in pursuance of Section 301 of Companies Act, 1956, to the
best of our knowledge and belief and according to the information and
explanations given to us :
a) The particular of contracts or arrangements referred to Section 301
that needed to be entered in the register maintained under the said
Section have been so entered.
b) Where each of such transaction is in excess of Rs.5 Lacs in respect of
any party, the transaction have been made at a price which are prima
facie reasonable having regard to the prevailing market prices at the
relevant time.
vi) To the best of our knowledge, the company has not accepted any
deposits covered under section 58A and 58AA or any other provisions of
the Companies Act, 1956.
vii) In our opinion, the Company has an adequate internal audit system
commensurate with its size and the nature of its business.
viii) To the best of our knowledge, the Central Government has
prescribed the maintenance of cost records under Section 209 (1) (d) of
the Companies Act, 1956, which have been maintained by the company and
these have been broadly reviewed by us and we are of the opinion that,
prima facie, the prescribed accounts and records have been made and
maintained. However, we have not, nor we are required, carried out any
detailed examination of such accounts and records.
ix) According to the information and explanations given to us, in
respect of statutory dues :
a) The Company has generally been regular in depositing undisputed dues
including Provident Fund, Investors' Education and Protection Fund,
Employees' State Insurance, Income Tax, Sales Tax/VAT, Wealth Tax,
Custom Duty, Excise Duty, Cess, Service Tax and any other statutory
dues applicable to it with the appropriate authorities.
b) There were no undisputed amounts payable in respect of Income Tax,
Wealth Tax, Service Tax, Excise Duty, Cess, and other material
statutory dues in arrears as at 31st March, 2012 for a period of more
than six months from the date they become payable.
c) The disputed statutory dues aggregating Rs.37727.34 Lacs that have not
been deposited on account of disputed matters pending before
appropriate authorities are as under:
Name of the Stat Nature of Period to which the amount
ute Dues pertains
The Central Excise Excise Duty AprMay'98 & Oct. 2000 to Nov. 2000
Act, 1944 Aug'05 to Jul'09 &
Apr'09 to Jan'10
F.Y. 20012002,Mar'05 to
Jan'10,Jul'01 to Mar'06, Oct'1996
to Sep'2000, 200809
200809
200809
Mar'03 to Apr'03, Oct'03 to Sep'05
200809
Finance Act, 1994 Service Tax Dec'04 to Nov'07, Jun'06 to Jan'08,
(Service Tax Nov'06 to Mar'07, Oct'09 to Sep'10,
Provisions) Dec'05 to Aug'08, Oct'09 to Sep'10
Income Tax Act,
1961 Income Tax 200708
Sales Tax Acts
of vari Local Sales Tax 200203, 200304, 200405 & Apr'06to
ous states Oct'06
200809
200607
Jan'08 to Dec'08
Penalty on Trade 199192
Tax (Net of Rs.0.38
Lacs paid under
protest)
Central Sales
Tax Act, Central Sales 200203, 200304, 200405 &
1956 Tax Apr'06 to Oct'06
Uttar Pradesh
Tax on Entry Tax 199596,
Entry of Goods
into 200405
Local Areas
Act, 2007 200506 to Jan'08
Odisha Entry
Tax Entry Tax (Net Dec'07 to Mar'12
Act,1999 ofRs.1650Lacs
paid under
protest)
Orissa Minor
Minerals Royalty
Concession
Rules,
2004
Customs Act,
1962 Custom Duty 200809
201011
Name of the Statue Amount Forum where the dispute is
(Rs. In Lacs) pending
The Central Excise
Act, 1944 0.96 High Court of Allahabad
14077.80 CESTAT, Kolkata
3393.71 CESTAT, New Delhi
3.93 Commissioner (Appeal) Chan
digarh
0.64 Commissioner (Appeal) Central
Excise, Ghaziabad
316.65 Commissioner of Central
Excise,Raigad Commissionerat,
Panvel, New Mumbai.
1.31 Assistant Commissioner of
Central Excise, Cuttack
Finance Act, 1994
(Service Tax
Provisions) 3098.26 CESTAT
Income Tax Act, 1961 804.21 Commissioner of Income Tax
(Appeals)
Sales Tax Acts of vari
ous states 448.63 High Court of Allahabad
35.11 Addl. Commissioner (Appeal)
136.52 Commissioner of Taxes
543.62 Orissa High Court
0.75 Trade Tax Tribunal
Central Sales Tax Act,
1956 2240.64 High Court of Allahabad
Uttar Pradesh Tax on
Entry of Goods into
Local Areas Act, 2007 392.37 High Court of Allahabad
144.12 Addl. Commissioner of Sales
Tax (Appeal)
Odisha Entry Tax
Act,1999 10322.36 Supreme Court
Orissa Minor Minerals
Concession Rules,
2004 1696.09 Orissa High Court
Customs Act, 1962 42.76 CESTAT
26.90 Deputy Commissioner
Customs
x) The Company has no accumulated losses and has not incurred any cash
loss during the financial year covered by our Audit and in the
immediate preceding financial year.
xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
Financial Institutions or Banks or Debenture holders.
xii) On the basis of verification of accounts and records maintained by
the Company and to the best of our knowledge and belief, the Company
has not granted any loan and advance on the basis of security by way of
pledge of shares, debentures and other securities.
xiii) The Company is not a chit fund / nidhi / mutual benefit fund /
society. Therefore, the provision of clause 4(xiii) of the Companies
(Auditors' Report) Order, 2003 is not applicable to the Company.
xiv) To the best of our knowledge and according to information given to
us, the Company is not a dealer or trader in securities. The Company
has invested in marketable securities and mutual funds. According to
the information and explanations given to us, proper records have been
maintained of the transactions and contracts, and timely entries have
been made therein. The investments in marketable securities and mutual
funds have been held by the Company in its own name.
xv) To the best of our knowledge and according to the information and
explanations given to us, the Company has not given any guarantee for
loans taken by others from Banks/ Financial Institutions.
xvi) To the best of our knowledge and according to the information and
explanations given to us, the term loans were applied for the purpose
for which the loans were obtained, other than temporary deployment
pending application.
xvii) In our opinion and according to the information and explanations
given to us and on an overall examination of Balance Sheet, we report
that funds raised on short term basis have not been used during the
year for long term investments.
xviii) According to the information and explanations given to us, the
Company has made preferential allotment of Preference Shares during the
year to parties and companies covered in the Register maintained under
section 301 of the Companies Act, 1956. In our opinion and according to
information and explanations given to us, the price, at which
Preference Shares have been issued, is not prejudicial to the interest
of the Company.
xix) To the best of our knowledge and according to the information and
explanations given to us, the Company has created securities/ charges
as on the date of our report, in respect of Secured Debentures issued
to the satisfaction of the Trustee of the Debentures.
xx) According to the information and explanations given to us, the
Company has not raised any money by Public Issue during the year.
xxi) Based upon the audit procedure performed and information and
explanations given by the Management, we report that no fraud on or by
the Company has been noticed or reported during the year.
For MEHRA GOEL & CO.
Chartered Accountants
(Registration NO.000517N)
Sd/
R.K. MEHRA
Partner
M. No.: 6102
Place: New Delhi
Dated: 31 st July, 2012
Mar 31, 2011
We have audited the attached Balance Sheet of BHUSHAN STEEL LIMITED
as on 31st March, 2011 and also the Profit & Loss Account and the
Cash Flow Statement pf the Company for the year ended on that date
annexed thereto. These financial statments are the responsibility
of the Company's Management. Our responsibility is to express an
opinion on these finacial 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 the 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, issued
by the Central Government of India in terms of Section 227 (4A) of the
Companies Act, 1956, we enclose in the Annexure, 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 above we report
that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose 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 exa mi nation of
those books;
c) The Balance Sheet, the Profit & Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d) In our opinion the accounts, the Balance Sheet, the Profit & Loss
Account and the Cash Flow Statement dealt with by the report comply
with the requirements of Accounting Standards referred to in sub
section (3C) of section 211 of the Companies Act, 1956;
e) On the basis of the written representations received from the
Directors as on 31 st March, 2011 and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31 st March, 2011 from being appointed as a Director in terms of
clause (g) of Sub-section (1) of Section 274 of the Companies Act, 1
956;
f) In our opinion, and to the best of our information and according to
the explanations given to us, the said accounts, give the information
required by the Companies Act, 1956, in the manner so required 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 (Referred to in paragraph 1 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 covering significant value were physically verified
during the year by the Management at such intervals which in our
opinion, provides for the physical verification of all the Fixed Assets
at reasonable interval having regard to the size of the Company and
nature of its business. According to the information and explanations
given to us by the Management, no material discrepancies have been
noticed on such verification.
c) No substantial part of fixed assets have been disposed off during
the year. ii) In Respect of its Inventory:
a) As per information & explanations given to us, the inventory of
finished goods, semi-finished goods and raw material at works were
during the year physically verified by the management. In respect of
Stores and Spare Parts and stock at yards in the custody of the third
party and stocks in transit were verified with the confirmation or
statement of account or correspondence of the third parties or
subsequent receipt of goods.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories of
the Company followed by the Management are reasonable and adequate in
relation to the size of the Company and 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, no material discrepancies were noticed on such physical
verification.
iii) In our opinion and according to information & explanations given
to us, the company has not taken/granted any loans, secured or
unsecured from /to companies, firms or other parties listed 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, having regard to explanation that some of the items
purchased are of special nature and suitable alternative sources are
not readily available for obtaining comparable quotations there is an
adequate internal control system commensurate with the size of the
company and the nature of its business with regard to the purchase of
inventory, fixed assets and for the sale of goods and services. During
the course of our Audit we have not observed any continuing failure to
correct major weaknesses in such internal control system.
v) In respect of contracts or arrangements entered in the register
maintained in pursuance of Section 301 of Companies Act, 1956, to the
best of our knowledge and belief and according to the information and
explanations given to us.
a) The particular of contracts or arrangements referred to Section 301
that needed to be entered in the register maintained under the said
Section have been so entered.
b) Where each of such transaction is in excess of Rs.5 Lacs in respect of
any party, the transaction have been made at a price which are prima
facie reasonable having regard to the prevailing market prices at the
relevant time.
vi) To the best of our knowledge, the company has not accepted any
deposits covered under section 58A and 58AA or any other provisions of
the Companies Act, 1956.
vii) In our opinion, the Company has an adequate internal audit system
commensurate with its size and the nature of its business.
viii) To the best of our knowledge, the Central Government has
prescribed the maintenance of cost records under Section 209 (1) (d) of
the Companies Act, 1956, which have been maintained by the company and
these have been broadly reviewed by us and we are of the opinion that,
prima facie, the prescribed accounts and records have been made and
maintained. However, we have not, nor we are required, carried out any
detailed examination of such accounts and records.
ix) According to the information and explanations given to us, in
respect of statutory dues.
a) The Company has generally been regular in depositing undisputed dues
including Provident Fund, Investors' Education and Protection Fund,
Employees' State Insurance, Income Tax, Sales Tax/VAT, Wealth Tax,
Custom Duty, Excise Duty, Cess, Service Tax and any other statutory
dues applicable to it with the appropriate authorities.
b) There were no undisputed amounts payable in respect of Income Tax,
Wealth Tax, Service Tax, Excise Duty, Cess, and other Material
statutory dues in arrears as at 31st March, 2011 for a period of more
than six months from the date they become payable.
c) The disputed statutory dues aggregating Rs.23228.45 Lacs that have not
been deposited on account of disputed matters pending before
appropriate authorities are as under:
Name of the Nature of the Dues Amount
Statute [Rs. in Lacs)
The Central Differential Duty on material
supplied 0.31
Excise Act, 1944 to earthquake victims
Seizure 0.60
Job work challan 0.50
Modvat on Welding Electrodes 0.40
0.46
Demand of Excise duty, refunded by 0.52
the authorities, on returned of
Imported Capital Goods
Modvat on Tank Fitted on Trailer for 2.16
Temporary storage used in emergency
Rejection of Cenvet credit on steel,
cement, 14355.74
welding electrodes, sleepers, fuel
oil etc.
113.11
Rejection of Cenvet Credit on
HR Coils 353.06
used for manufacture of HR Sheets etc.
Duty Demanded without considering 257.10
credit and abatement of freight
Duty Demanded on account of Under 1259.80
valuation
Demand of Excise Duty on removal 391.76
of Zinc Dross and Ash
Rejection of Cenvat credit on 90.43
Capital Goods
0.72
Service Tax Service Tax on import of service 653.69
Service Tax on Export of Goods by 52.33
CHA & others
40.60
Sales Tax Penalty on Trade Tax (Net of 0.75
Rs.0.38 Lacs paid under protest)
Entry Tax Entry Tax (Net of Rs.1 290 Lacs 5654.41
paid under protest)
Name of the Period to which Forum where dispute
Statue amount related is pending
The Central
Excise Act, 1944 F.Y. 2001-02 Commissioner CESTAT
Jan. 2002 High Court, Allahabad
Oct.2000 to High Court, Allahabad
Nov.2000
April - May 1998 High Court, Allahabad
Sept.2003 High Court, Allahabad
Jan. 1999 Commissioner CESTAT
Aug, 2005 to CESTAT (Kolkatta]
July, 2009 & Commissioner(A]
Oct, 2003 to CESTAT
Sep, 2005
Mar, 2005 to Appeal under
Jan, 2010 preperation
July, 2001 to Commissioner(A]
May, 2003
Oct, 1996 to CESTAT
Sep, 2000
Dec, 2006 to CESTAT
Feb, 2009
F.Y. 2001-2002 & CESTAT
FY 2002-2003
F.Y. 2007-2008 Commissioner(A]
Service Tax Dec, 2005 to CESTAT
Aug, 2008
Dec, 2004 to CESTAT
Nov, 2007
May, 2005 to CCE(A]
Mar, 2010
Sales Tax F.Y. 1993-1994 Tribunal Trade
Tax Ghaziabad
Entry Tax Various year up to Supreme Court
31st March, 2011
x) The Company has no brought forward losses and has not incurred any
cash losses during the financial year covered by our Audit and in the
immediate preceding financial year.
xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
Financial Institutions or Banks or Debenture holders.
xii) On the basis of verification of accounts and records maintained by
the Company and to the best of our knowledge and belief, the Company
has not granted any loan and advance on the basis of security by way of
pledge of shares, debentures and other securities.
xiii) The Company is not a chit fund / nidhi / mutual benefit fund /
society. Therefore,the provision of clause 4(xiii) of the Companies
(Auditors' Report) Order, 2003 is not applicable to the Company.
xiv) To the best of our knowledge and according to information given to
us, the Company is not a dealer or trader in securities. The Company
has invested in marketable securities and mutual funds. According to
the information and explanations given to us, proper records have been
maintained of the transactions and contracts, and timely entries have
been made therein. The investments in marketable securities and mutual
funds have been held by the Company in its own name.
xv) To the best of our knowledge and according to the information and
explanations given to us, the Company has not given any guarantee for
loans taken by others from Banks/ Financial Institutions.
xvi) To the best of our knowledge and according to the information and
explanations given to us, the term loans were applied for the purpose
for which the loans were obtained, other than temporary deployment
pending application.
xvii) In our opinion and according to the information and explanations
given to us and on an overall examination of Balance Sheet, we report
that no funds raised on short term basis have not been used during the
year for long term investments.
xviii)According to the information and explanations given to us, the
Company has made preferential allotment of Preference Shares during the
year to parties and companies covered in the Register maintained under
section 301 of the Companies Act, 1956. In our opinion and according to
information and explanations given to us, the price, at which
Preference Shares have been issued, is not prejudicial to the interest
of the Company.
xix) To the best of our knowledge and according to the information and
explanations given to us, the Company has created securities/ charges
as on the date of our report, in respect of Secured Debentures issued
to the satisfaction of the Trustee of the Debentures.
xx) According to the information and explanations given to us, the
Company has not raised any money by Public Issue during the year.
xxi) Based upon the audit procedure performed and information and
explanations given by the Management, we report that no fraud on or by
the Company has been noticed or reported during the year.
For MEHRA GOEL & CO.
Chartered Accountants
(Registration No. 000517N]
Sd/-
R. K. MEHRA
Partner
M.No. 6102
Place: New Delhi
Dated July 29, 2011
Mar 31, 2010
We have audited the attached Balance Sheet of BHUSHAN STEEL LIMITED as
on 31st March, 2010 and also the Profit & Loss Account and the Cash
Flow Statement of the Company for the year ended on that date annexed
thereto. 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 the 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, issued
by the Central Government of India in terms of Section 227 (4A) of the
Companies Act, 1956, we enclose in the Annexure, 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 above we report
that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) In our opinion, proper books of account, as required by law have
been kept by the Company, so far as appears from our examination of
those books;
c) The Balance Sheet, the Profit & Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d) In our opinion the accounts, the Balance Sheet, the Profit & Loss
Account and the Cash Flow Statement dealt with by the report comply
with the requirements of Accounting Standards referred to in sub
section (3C) of section 211 of the Companies Act, 1956;
e) On the basis of the written representations received from the
Directors as on 31st March, 2010 and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st March, 2010 from being appointed as a Director in terms of clause
(g) of Sub-section (1) of Section 274 of the Companies Act, 1956;
f) In our opinion, and to the best of our information and according to
the explanations given to us, the said accounts, give the information
required by the Companies Act, 1956, in the manner so required 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, 2010;
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 (Referred to in paragraph 1 of our report of even date)
i) a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) In our opinion the fixed assets covering significant value have been
physically verified by the Management during the year at reasonable
intervals and having regard to the size of the Company and the nature
of its assets and on the basis of the information and explanations
given by the Management, no material discrepancies have been noticed on
such verification.
c) No substantial part of fixed assets have been disposed off during
the year.
ii) a) As per information & explanations given to us, the inventory of
the Company in its possession have been physically verified by the
Management at reasonable intervals. Stocks in the possession and
custody of the third parties and stocks in transit as on 31st March,
2010 have been verified by the Management with regard to confirmation
or statement of account or correspondence of the third parties or
subsequent receipt of goods.
b) The procedures of physical verification of inventories of the
Company followed by the Management are reasonable and adequate in
relation to the size of the Company and nature of its business.
c) The Company is maintaining proper records of inventories. As
explained to us, no material discrepancies were noticed on such
physical verification as compared to book records.
iii) In our opinion and according to information & explanations given
to us, the Company has not taken/granted any loans, secured or
unsecured from / to companies, firms or other parties listed 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 are adequate internal control procedures
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. During the course of our Audit, no major weakness has been
noticed in the internal controls. We have not observed any continuing
failure to correct major weaknesses in such internal control.
v) a) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements, that needs to be entered in the register maintained u/s
301 of the Companies Act, 1956 have been so entered.
b) In our opinion and according to the information and explanations
given to us, each of these transactions entered in the register
maintained under section 301 of the Companies Act, 1956 and aggregating
during the year to Rs. 5,00,000/- or more in respect of each party,
have been made at prices which are reasonable having regard to the
prevailing market price at the relevant date.
vi) To the best of our knowledge, the Company has not accepted any
deposits covered under section 58A and 58AA or any other provisions of
the Companies Act, 1956.
vii) To the best of our knowledge and explanations given to us, the
Company has an internal audit system commensurate with its size and the
nature of its business.
viii) To the best of our knowledge, the Central Government has
prescribed the maintenance of cost records under Section 209 (1) (d) of
the Companies Act, 1956, which have been maintained by the Company and
these have been broadly reviewed by us and we are of the opinion that,
prima facie, the prescribed accounts and records have been made and
maintained. However, we have not, nor we are required, carried out any
detailed examination of such accounts and records.
ix) a) To the best of our knowledge and according to the information
and explanations given to us the Company is regular in depositing
undisputed statutory dues including Provident Fund, Investors
Education and Protection Fund, Employees State Insurance, Income Tax,
Sales Tax/VAT, Wealth Tax, Custom Duty, Excise Duty, Cess, Service Tax
and any other statutory dues applicable to it with the appropriate
authorities.
b) According to the information and explanations given to us there were
no arrears of outstanding Income Tax, Wealth Tax, Sales Tax/VAT,
Service Tax, Cess, Custom Duty, Excise Duty and any other statutory
dues as at 31st March, 2010 for a period of more than six months from
the date they became payable.
c) To the best of our knowledge and according to information and
explanations given to us there are no dues of Income Tax / Sales Tax /
VAT / Custom Duty / Wealth Tax / Excise Duty / Cess / Service Tax which
have not been deposited on account of any dispute except in the
following cases :-
Name of the Nature of
the Dues Amount Period
to which Forum where
dispute
Statute (Rs. in Lacs) amount related is pending
The Central Differential
Duty on material
supplied 0.31 F.Y. 2001-02
Commissioner CESTAT
Excise Act,
1944 to earthquake
victims
Seizure 0.60 Jan. 2002 High Court, Allahabad
Job work
challan 0.50 Oct. 2000 to
Nov. 2000 High Court, Allahabad
Modvat on
Welding
Electrodes 0.40 April -
May 1998 High Court, Allahabad
0.46
Demand of Excise
duty, refunded by
the 0.52 Sept.2003 High Court, Allahabad
authorities, on
returned of
Imported Capital Goods
Modvat on Tank Fitted
on Trailer for 2.16 Jan.1999 Commissioner CESTAT
Temporary storage
used in emergency
Sales Tax Penalty on Trade Tax
(Net of Rs. 0.38 Lacs
0.75 F.Y. 1993-94 Tribunal Trade Tax
paid under protest) Ghaziabad
x) The Company has no brought forward losses and has not incurred any
cash losses during the financial year covered by our Audit and the
immediate preceding financial year.
xi) In our opinion, the Company has not defaulted in repayment of dues
to Financial Institutions or Banks or Debenture holders.
xii) On the basis of verification of accounts and records maintained by
the Company and to the best of our knowledge & belief, the Company has
not granted any loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
xiii) The Company is not a chit fund or nidhi / mutual benefit fund /
society. Therefore, the provision of clause 4(xiii) of the Companies
(Auditors Report) Order, 2003 is not applicable to the Company.
xiv) To the best of our knowledge and according to information given to
us, the Company is not a dealer or trader in securities. The Company
has invested in marketable securities and mutual funds. According to
the information and explanations given to us, proper records have been
maintained of the transactions and contracts, and timely entries have
been made therein. The investments in marketable securities and mutual
funds have been held by the Company in its own name.
xv) To the best of our knowledge and according to the information and
explanations given to us, the Company has not given any guarantee for
loans taken by others from Banks/ Financial Institutions.
xvi) To the best of our knowledge and according to the information and
explanations given to us, the term loans were applied for the purpose
for which the loans were obtained.
xvii) According to the Cash Flow Statement and other records examined
by us and information & explanations given to us, on an overall basis,
funds raised on short term basis have, prima facie, not been used
during the year for long term investments.
xviii) According to the information & explanations given to us, the
Company has made preferential allotment of Preference Shares during the
year to parties and companies covered in the Register maintained under
section 301 of the Companies Act, 1956. In our opinion and according to
information and explanations given to us, the price, at which
Preference Shares have been issued, is not prejudicial to the interest
of the Company.
xix) To the best of our knowledge and according to the information &
explanations given to us, the Company has created securities/ charges
as on the date of our report, in respect of Secured Debentures issued
to the satisfaction of the Trustee of the Debentures.
xx) According to the information & explanations given to us, the
Company has not raised any money by Public Issue during the year.
xxi) Based upon the audit procedure performed and information and
explanations given by the Management, we report that no fraud on or by
the Company has been noticed or reported during the year.
For MEHRA GOEL & CO.
Chartered Accountants
(Registration No.-000517N)
Sd/-
R.K. MEHRA
Partner M. No.: 6102
Place : New Delhi
Dated : July 31, 2010
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