Home  »  Company  »  Indian Metal & F  »  Quotes  »  Auditor Report
Enter the first few characters of Company and click 'Go'

Auditor Report of Indian Metals & Ferro Alloys Ltd.

Mar 31, 2015

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

We have audited the accompanying standalone financial statements of Indian Metals and Ferro Alloys Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITOR''S RESPONSIBILITY

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' judgment,

including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the standalone financial statements.

BASIS FOR QUALIFIED OPINION

As mentioned in Note No. 13.1 to the standalone financial statements, the Company has equity investment amounting to Rs.53.13 crore in Indmet Mining Pte Ltd (''Indmet''), a wholly-owned subsidiary incorporated in Singapore which, in turn, has investment in its Indonesian subsidiary PT Sumber Rahayu Indah (''PT Sumber''). The Company''s carrying value of investment in Indmet is substantially dependent on the latter''s carrying value of investment in PT Sumber. Indmet''s auditors in their Independent Auditors'' Report dated 14th May, 2015 for the year ended 31st March, 2015 have qualified their audit opinion in respect of the carrying value of Indmet''s investment in PT Sumber, as mentioned in the said Note. The Company has not made provision towards any diminution in the carrying value of it''s investment in Indmet but having regard to the uncertainty, we are unable to comment whether or not there is a decline, other than temporary, in the value of the Company''s investment in Indmet, in terms of Accounting Standard 13 - Accounting for Investments. Consequentially, the impact of the same, if any, on the profit for the year cannot be ascertained.

QUALIFIED OPINION

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, its profit and its cash flows for the year ended on that date.

EMPHASIS OF MATTERS

We draw attention to Note Nos. 31 and 32 to the standalone financial statements relating to the Company''s exposure in a subsidiary and non-recognition of income From interest on unsecured loan given to the subsidiary, respectively. These matters have arisen out of the cancellation of allotment of the coal block being held by the subsidiary vide the Hon''ble Supreme Court of India''s order dated 24th September, 2014, the subsequent auction process of the coal block pursuant to the promulgation of The Coal Mines (Special Provisions) Ordinance, 2014 and the filing of two writ petitions before the Hon''ble High Court of Delhi by the subsidiary in connection therewith.

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, 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 matter described in the Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. Except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. The matters described in the Emphasis of Matters paragraph and the Basis for Qualified Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;

f. On the basis of the written representations received from the directors as on 31st March, 2015 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act;

g. The qualification relating to the maintenance of accounts and other matters connected therewith is as stated in the Basis for Qualified Opinion paragraph above.

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 standalone financial statements - Refer Note Nos. 30,31,32,38,39,40,41 and 42 to the standalone financial statements;

(ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long- term contracts including derivative contracts;

(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure to the Independent Auditors'' Report

(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' in our Independent Auditor''s Report of even date, to the members of Indian Metals and Ferro Alloys Limited on the financial statements for the year ended 31st March, 2015)

(i) (a) The Company is maintaining proper records showing

full particulars, including quantitative details and situation of fixed assets.

(b) According to the information and explanations given to us, major portion of fixed assets has been physically verified by the management of the Company ("management") during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency of physical verification is reasonable having regard to the size of the Company and the nature of its fixed assets.

(ii) (a) According to the information and explanations given

to us, the inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. As explained to us, there were no material discrepancies on physical verification of inventory as compared to the book records.

(iii) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have neither come across nor have we been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

(v) According to the information and explanations given to us, the Company has not accepted any deposits from the public.

(vi) The maintenance of cost records has been specified by the Central Government under sub-section (1) of Section 148 of the Act. We have broadly reviewed such records and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(vii) (a) According to the records of the Company, amounts

deducted/accrued in the books of account in respect of undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were in arrears as at 31st March,2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, the dues as at 31st March, 2015 of income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax and cess, which have not been deposited on account of any dispute are as follows:

Name of the Statute Nature of dues Amount(Rs In Lakh)

Central Excise Act, 1944 Excise Duty 20.76

Central Excise Act, 1944 Excise Duty 3.85

Central Excise Act, 1944 Excise Duty 18.04

Central Excise Act, 1944 Excise Duty 15.15

Central Excise Act, 1944 Excise Duty 8.04

Income Tax Act, 1961 Income Tax 17.45

Income Tax Act, 1961 Income Tax 9,519.16

Income Tax Act, 1961 Income Tax 9,419.61

Orissa Value Added Tax VAT 2.29 Act, 2004

Orissa Sales Tax Act, 1947 Sales Tax 0.25

Orissa Sales Tax Act, 1947 Sales Tax 0.77

Orissa Sales Tax Act, 1947 Sales Tax 7.04

Orissa Sales Tax Act, 1947 Sales Tax 4.19

Orissa Entry Tax Act, 1999 Entry Tax 2.00

Orissa Entry Tax Act, 1999 Entry Tax 91.71

Orissa Entry Tax Act, 1999 Entry Tax 176.40

Orissa Entry Tax Act, 1999 Entry Tax 589.28

Orissa Entry Tax Act, 1999 Entry Tax 44.79

Name of the Statute Period to which the Forum where dispute amount relates is pending



Central Excise Act, 1993-2002 Orissa High Court 1944

Central Excise Act, 2005-2007 Commissioner of 1944 Central Excise (Appeals)

Central Excise Act, 2005-2009 Commissioner of 1944 Central Excise (Appeals)

Central Excise Act, 2002-2009 Central Excise & 1944 Service Tax Appellate Tribunal

Central Excise Act, 2009-10 to 2011-12 Commissioner of 1944 Central Excise (Appeals)

Income Tax Act, 1961 Assessment Years 1987- Orissa High Court 88, 1988-89 & 1989-90

Income Tax Act, 1961 Assessment Year Commissioner of 2009-10 Income Tax (Appeals)

Income Tax Act, 1961 Assessment Year Commissioner of 2009-10 Income Tax (Appeals)

Orissa Value Added Tax February 2008 Orissa Sales Tax Act, 2004 to May 2009 Tribunal

Orissa Sales Tax Act, 1990-91 Orissa High Court 1947

Orissa Sales Tax Act, 1990-91 Orissa High Court 1947

Orissa Sales Tax Act, 2002-03 Addl. Commissioner 1947 of Sales Tax

Orissa Sales Tax Act, 1994-95 Orissa Sales Tax 1947 Tribunal

Orissa Entry Tax Act, 2002-03 Orissa High Court 1999

Orissa Entry Tax Act, November 2007 Addl. Commissioner 1999 to March 2010 of Sales Tax

Orissa Entry Tax Act, April 2010 to Addl. Commissioner 1999 September 2011 of Sales Tax

Orissa Entry Tax Act, March, 2008 to Supreme Court of 1999 March, 2015 India

Orissa Entry Tax Act, February 2008 to Orissa High Court 1999 May 2009

(c) According to the information and explanations given to us, the amount required to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder has been transferred to such fund within time.

(viii) The Company does not have any accumulated losses at the end of the financial year covered by our audit and has not incurred cash losses in such financial year and in the immediately preceding financial year. (Since the matter stated in the Basis for Qualified Opinion paragraph of our Independent Auditor''s Report of even date is not quantifiable, it''s consequential effect has not been taken into consideration for the purpose of commenting in respect of this clause).

(ix) Based on our audit procedures and as per the information and explanations given to us by the management, we are of the opinion that during the year the Company has not defaulted in repayment of dues to a financial institution or bank. The Company has not issued any debentures as at the balance sheet date.

(x) The Company has given guarantee for loan taken by others from banks or financial institutions. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interest of the Company.

(xi) In our opinion and according to the information and explanations given to us, term loans were prima facie applied for the purposes for which the loans were obtained.

(xii) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given to us by the management, no material fraud on or by the Company has been noticed or reported during the year.

For Haribhakti & Co. LLP Chartered Accountants ICAI Firm Registration No. 103523W

Anand Kumar Jhunjhunwala Partner Membership No.056613 Bhubaneswar 14th May, 2015


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Indian Metals & Ferro Alloys Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s 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"). 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 the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditors'' 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 the 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the 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, except that,

1. Disputes with Gridco were settled in favour of the Company vide a unanimous award of the Arbitration Panel dated 23rd March 2008. Subsequently, Gridco filed a petition before the Hon''ble District Judge, Bhubaneswar and obtained an interim stay on the operation of the said award. The Company has filed its objection in the matter.

2. An amount of Rs. 11.39 Crores withheld by sundry debtors, the effect of which on the current year''s accounts cannot be ascertained pending settlement thereof 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 31st March 2013;

b. in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date, and

c. in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' 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 purposes of our audit.

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c. The Balance Sheet, 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, Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act.

e. On the basis of the written representations received from the Directors as on 31st March 2013 taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March 2013 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Act.

The Annexure referred to in paragraph 1 of our Report of even date to the members of Indian Metals & Ferro Alloys Limited on the accounts of the Company for the year ended 31st March 2013.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) As explained to us, major portion of assets have been physically verified by the management during the year; no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, no substantial parts of fixed asset has been disposed off during the year and therefore does not affect the going concern assumption.

2. (a) As explained to us, inventories have been physically verified during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

3. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Consequently, the provisions of clause 4 iii (b), iii (c) and iii (d) of the order are not applicable to the Company.

(b) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not taken loans from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Thus sub clauses (f) & (g) are not applicable to the Company.

4. I n our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the Company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

(b) As per information & explanations given to us and in our opinion, the transactions entered into by the Company with parties covered u/s 301 of the Act, that exceed five lakhs rupees in the financial year, as mentioned below, have been made at the prices which are reasonable having regard to the prevailing market prices at the relevant time.

Sl. Name of the party Nature of With effect from Amount (Rs.) p.a No. arrangement

1 B. P Co. Private Limited Rental Agreement 1st April 2012 25,20,000

2 B. P Co. Private Limited Rental Agreement 1st October 2012 7,44,000

3 B. P Co. Private Limited Rental Agreement 1st October 2012 7,44,000

4 Utkal Charitable Trust Rental Agreement 1st October 2012 5,04,000

5 Utkal Charitable Trust Rental Agreement 1st October 2012 12,60,000

6 Mr Baijayant Panda Rental Agreement 1st November 2012 21,00,000

6. The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956.

7. As per information & explanations given by the management, the Company has an internal audit system commensurate with its size and the nature of its business.

8. As per information & explanation given by the management, maintenance of cost records has been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

9. (a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st March 2013 for a period of more than six months from the date they became payable except for electricity duty as mentioned vide Note 26.4 (notes forming part of the accounts).

(b) According to the information and explanations given to us, there is no amounts payable in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty and Excise Duty which have not been deposited on account of any disputes pending except as under:

10. The Company does not have any accumulated loss and has not incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year. While reporting on this clause, we have not taken into consideration the unquantifiable qualifications being shown in our audit report.

11. Based on our Audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

12. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a chit fund or a Nidhi/Mutual benefit Fund/Society. Therefore, the provision of this clause of the Companies (Auditors'' Report) Order, 2003 (as amended) is not applicable to the Company.

14. According to information and explanations given to us, the Company is not trading in Shares, Mutual Funds & other Investments.

15. According to the information and explanations given to us, the Company has given guarantee for loans taken by others from banks or financial institutions, the details of which has been mentioned below, the terms and conditions where of are not prejudicial to the interest of the Company.

Name of the Name of the bank Loan sanctioned Loan availed O/s as at Company /FIS (Rs. Crores) (Rs. Crores) 31st March 2013 (Rs. Crores)

Utkal Coal Ltd. SREI Finance Ltd. 73.60 73.60 72.86

Utkal Coal Ltd. ICICI Bank Ltd. 86.40 86.35 86.35

16. According to the information and explanations given to us, the term loan taken by the Company have been applied for the purpose for which they were raised.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March 2013, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

18. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

19. The Company has no outstanding debentures during the period under audit.

20. The Company has not raised any money by public issue during the year.

21. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management. for Raghu Nath Rai & Co.

Chartered Accountants

Firm Regn No. 000451N

(Sharat Prakash)

Place: New Delhi Partner

Date: 15th May 2013 Membership No. 96267


Mar 31, 2012

We have audited the attached Balance Sheet of the Indian Metals & Ferro Alloys Limited as at 31st March, 2012 and also the Profit and Loss Statement and the Cash Flow Statement 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In accordance with the provisions of section 227 of Companies Act, 1956, we report that:

1. As required by the Companies (Auditors' Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks of the books and records as we considered appropriate and according to the information and explanation given to us, 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 annexure referred to above, we report that:

i. 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;

ii. 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;

iii. The balance sheet, profit and loss statement & cash flow statement dealt with by this report are in agreement with the books of account;

iv. In our opinion, the balance sheet, profit and loss statement & cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

v. On the basis of written representations received from the Directors of the Company as at 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 of the Company in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

vi. In our opinion and to the best of our information and according to the explanations given to us, except that:-

1. Disputes with Gridco were settled in favour of the Company vide a unanimous award of the Arbitration Panel dated 23rd March 2008. Subsequently, Gridco filed a petition before the Hon'ble District Judge, Bhubaneswar and obtained an interim stay on the operation of the said award. The Company has filed its objection in the matter.

2. An amount of Rs.11.39 crores withheld by sundry debtors, the effect of which on the current year's accounts cannot be ascertained pending settlement thereof.

the said accounts subject to (vi) above and read together with the significant accounting policies in Note 25 and the notes thereon in Note 26, 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;

a. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

b. in the case of the Profit and Loss Statement, 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;

ANNEXURE TO THE AUDITORS' REPORT

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 all fixed assets.

b) Major portion of assets have been physically verified by the management during the year. No material discrepancies were noticed on such verification. The Company has a regular program of physical verification of its fixed assets which, in our opinion, is reasonable having regard to size of the Company and nature of its assets.

c) No substantial parts of fixed assets have been disposed off during the year.

(ii) a) As explained to us, the inventories have been physically verified during the year by the management at reasonable intervals. In our opinion, the frequency of such verification is reasonable.

b) The procedures of physical verification of inventories followed by the management are in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business.

c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material in relation to the size of the operation of the Company and the same have been properly dealt with in the books of account.

(iii) a) We are informed that the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore, the provisions of clause 4 (iii) (b), (c) and (d) of the Companies (Auditor's Report) Order, 2004 (as amended) are not applicable to the Company.

b) We are informed that the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore the provisions of clause 4 (iii) (f) and (g) of the Companies (Auditor's Report) Order, 2004 (as amended) are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us there are adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control systems.

(v) a) According to the information and explanations given to us the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) During the year, the company has not accepted fixed deposit from the public.

(vii) In our opinion the Company has an internal audit system commensurate with its size and nature of its business.

(viii) We are of the opinion that prima facie, the cost records and accounts prescribed by the Government of India under Section 209(1)(d) of the Companies Act, 1956 have been made and maintained. However, we are not required to and have not carried out any detailed examination of such accounts and records.

(ix) a) According to the information and explanations given to us the Company has been regular in depositing undisputed statutory dues including provident fund, investors education & protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and any other statutory dues with appropriate authorities and no dues are pending for a period more than six months from the date they became payable except for electricity duty as mentioned vide Note 26.4 (notes forming part of the accounts).

b) According to the information and explanations given to us at the end of the financial year there were no dues of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute pending except as under:

Name of the statute Nature of dues Amount Rs. In lakhs

Customs Act, 1962 Custom Duty 535.54

Customs Act, 1962 Anti-dumping Duty 4.30

Income Tax Act, 1961 Income Tax 25.79

Income Tax Act, 1961 Income Tax 3945.86

Income Tax Act, 1961 Income Tax 4376.42

Central Excise Act, 1944 Central Excise 38.76

Odisha Sales Tax Act, 1947 VAT (FAD Unit) 69.96

Odisha Sales Tax Act, 1947 VAT (FAD Unit) 2.30

Odisha Sales Tax Act, 1947 O S T 7.04

Odisha Sales Tax Act, 1947 OST 4.19

Odisha Sales Tax Act, 1947 Entry Tax 2.00

Odisha Sales Tax Act, 1947 Entry Tax (FAD Unit) 0.43

Odisha Sales Tax Act, 1947 Entry Tax 19.11

Odisha Sales Tax Act, 1947 Entry Tax On 211.14 imported goods

Odisha Sales Tax Act, 1947 Entry Tax (FAD Unit) 67.18



Name of the statute Period to which Forum where the amount relates dispute is pending

Customs Act.1962 2001-04 CESTAT, (SZB) Bangalore

Customs Act,1962 April,2003 Odisha High Court

Income Tax Act, 1961 1986-87,1987-88 Odisha High Court

Income Tax Act, 1961 2008-09 CIT (A)-II, Bhubaneswar

Income Tax Act, 1961 2009-10 CIT (A)-II, Bhubaneswar

Central Excise Act,1944 1993-2002 Odisha High Court

Odisha Sales Tax Act, 1947 April 05 to January 08 A. C. , Sales Tax

Odisha Sales Tax Act, 1947 February 08 to May 09 A. C. , Sales Tax

Odisha Sales Tax Act, 1947 2002 - 03 A. C. , Sales Tax

Odisha Sales Tax Act, 1947 1994-95 Sales Tax Tribunal

Odisha Sales Tax Act, 1947 2002-03 Sales Tax Tribunal

Odisha Sales Tax Act, 1947 April 05 to January 08 A. C. , Sales Tax

Odisha Sales Tax Act, 1947 March 08 to Sept.09 Odisha High Court

Odisha Sales Tax Act, 1947 From December 2007 Odisha High Court

Odisha Sales Tax Act, 1947 February 08 to May 09 Odisha High Court

(x) In our opinion, the Company has no accumulated losses at the end of the financial year. The Company has generated cash profits during the financial year covered by our audit. While reporting on this clause, we have not taken into consideration the unquantifiable qualifications being shown in our audit report.

(xi) According to the information and explanations given to us, the Company has not defaulted in repayment of its dues to any financial institution/bank during the year in terms of the structured settlement reached with them.

(xii) According to the information and explanations given to us the Company has not granted loans & advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi / mutual benefit fund/societies.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, debentures and other investments and hence paragraph 4 (xiv) of the Order is not applicable.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions where of are prejudicial to the interest of the company.

(xvi) According to the information and explanations given to us, the term loan taken by the company have been applied for the purpose for which they were raised.

(xvii) In our opinion and according to the information and explanations given to us and shown by the records examined by us, no fund raised on short-term basis have been used for long-term investment during the year.

(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act.

(xix) According to the information and explanations given to us, the Company has not issued any debenture.

(xx) The company has not raised any money by public issue during the year, and hence paragraph 4 (xx) of the Order is not applicable.

(xxi) During the course of our examination of the books and records of the Company, carried out in accordance with generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instances of material fraud on or by the Company, noticed or reported during the year, nor have been informed of such case by management.

For RAGHU NATH RAI & CO

Chartered Accountants

Firm Regn.No.000451N

(Prem Prakash)

Place: New Delhi Partner

Date : May 05, 2012 Membership No. 7648


Mar 31, 2011

We have audited the attached Balance Sheet of the Indian Metals & Ferro Alloys Limited as at 31st March, 2011 and also the Profit and Loss Account and the Cash Flow Statement 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In accordance with the provisions of section 227 of Companies Act, 1956, we report that:

1. As required by the Companies (Auditors Report)(Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks of the books and records as we considered appropriate and according to the information and explanation given to us, 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 annexure referred to above, we report that:

i. 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;

ii. 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;

iii. The Balance Sheet, Profit and Loss account & Cash Flow statement dealt with by this report are in agreement with the books of account;

i v. In our opinion, the Balance Sheet, Profit and Loss account & Cash Flow statement dealt with by this report comply with the accounting standards referred to in sub-Section (3C) of Section 211 of the Companies Act, 1956;

v. On the basis of written representations received from the Directors of the Company as at 31st March, 2011, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2011 from being appointed as a Director of the Company in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

vi. In our opinion and to the best of our information and according to the explanations given to us, except that :- 1. The Arbitral Tribunal which went into the various disputes between the Company and Gridco unanimously decided in favour of the Company vide its award dated 23rd March 2008. However, Gridco subsequently filed a petition before the Honble District Judge, Bhubaneswar for setting aside the same and obtained an ex-parte interim order staying the operation of the award. Since the Company has filed an objection and is confident of the ultimate outcome being in its favour, no provision has been deemed necessary for the counter-claim of Rs.247.35 crores by Gridco.

2. An amount of Rs.11.39 crores withheld by sundry debtors, the effect of which on the current years accounts cannot be ascertained pending settlement thereof. the said accounts subject to (vi) above and read together with the significant accounting policies in Schedule M and the notes thereon in Schedule N, 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;

a. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st.March, 2011;

b. in the case of the Profit and Loss Account, 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;

Annexureto the Auditors Report 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 all fixed assets.

b. Major portion of assets have been physically verified by the management during the year. No material discrepancies were noticed on such verification. The Company has a regular program of physical verification of its fixed assets which, in our opinion, is reasonable having regard to size of the Company and nature of its assets.

c. No substantial parts of fixed assets have been disposed off during the year.

(ii) a. As explained to us, the inventories have been physically verified during the year by the management at reasonable intervals. In our opinion, the frequency of such verification is reasonable.

b. The procedures of physical verification of inventories followed by the management are in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business.

c. The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material in relation to the size of the operation of the Company and the same have been properly dealt with in the books of account.

(iii) a. We are informed that the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore, the provisions of clause 4 (iii) (b), (c) and (d) of the Companies (Auditors Report) Order, 2004 (as amended) are not applicable to the Company.

b. We are informed that the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore the provisions of clause 4 (iii) (f) and (g) of the Companies (Auditors Report) Order, 2004 (as amended) are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us there are adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control systems.

(v) a. According to the information and explanations given to us the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) During the year, the Company has not accepted fixed deposit from the public.

(vii) In our opinion the Company has an internal audit system commensurate with its size and nature of its business.

(viii) We are of the opinion that prima facie, the cost records and accounts prescribed by the Government of India under Section 209(1)(d) of the Companies Act, 1956 have been made and maintained. However, we are not required to and have not carried out any detailed examination of such accounts and records.

(ix) a. According to the information and explanations given to us the Company has been regular in depositing undisputed statutory dues including provident fund, investors education & protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and any other statutory dues with appropriate authorities and no dues are pending for a period more than six months from the date they became payable except for electricity duty as mentioned vide note no.4 of schedule " N" (notes forming part of the accounts).

b. According to the information and explanations given to us at the end of the financial year there were no dues of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute pending except as under:

Name of the statute Nature Amount of dues Rs in Lakhs

Customs Act, 1962 Custom Duty 535.54

Customs Act 1962 Anti-dumping Duty 4.30

ncome Tax Act1961 Income Tax 25.79

Central Excise Act, 1944 Central Excise 38.76

Cenvat Credit Rules 2004 Disallowance of 4.42 cenvat credit



Name of the Statue Period to Forum where which the dispute is pending amount relates

Customs Act, 1962 2001-04 CESTAT, (SZB) Bangalore

Customs Act, 1962 April,2003 Orissa High Court

Income Tax Act,1961 1986-87, 1987-88 Orissa High Court

Central Excise Act, 1944 1993-2002 Orissa High Court

Cenvat Credit Rules 2004 April 2006 to CESTAT(EZB) Kolkata March 2007

Name of the statute Nature Amount of dues Rs in Lakhs

Orissa Sales Tax Act, 1947 O S T 0.25

Orissa Sales Tax Act, 1947 O S T 0.98

Orissa Sales Tax Act, 1947 VAT (FAD Unit) 69.96

Orissa Sales Tax Act, 1947 VAT (FAD Unit) 2.30

Orissa Sales Tax Act, 1947 O S T 0.49

Orissa Sales Tax Act, 1947 O S T 7.04

Orissa Sales Tax Act, 1947 O S T 4.19

Orissa Sales Tax Act, 1947 Entry Tax 2.00

Orissa Sales Tax Act, 1947 Entry Tax 0.43

(FAD Unit)



Orissa Sales Tax Act, 1947 Entry Tax 67.18 (FAD Unit)

Name of the Statue Period to Forum where which the dispute is pending amount relates

Orissa Sales Tax Act, 1947 2004 - 05 A. C. , Sales Tax

Orissa Sales Tax Act, 1947 2000 - 01 Sales Tax Tribuna

Orissa Sales Tax Act, 1947 April 05 to A. C. , Sales Tax January 08

Orissa Sales Tax Act, 1947 February 08 to A. C. , Sales Tax May 09

Orissa Sales Tax Act, 1947 2003 - 04 Sales Tax Tribuna

Orissa Sales Tax Act, 1947 2002 - 03 A. C. , Sales Tax

Orissa Sales Tax Act, 1947 1994-95 Sales Tax Tribunal

Orissa Sales Tax Act, 1947 2002-03 Sales Tax Tribunal

Orissa Sales Tax Act, 1947 April 05 to A. C. , Sales Tax January 08

Orissa Sales Tax Act, 1947 February 08 Orissa High Court to May 09

(x) In our opinion, the Company has no accumulated losses at the end of the financial year. The Company has generated cash profits during the financial year covered by our audit. While reporting on this clause, we have not taken into consideration the unquantifiable qualifications being shown in our audit report.

(xi) According to the information and explanations given to us, the Company has not defaulted in repayment of its dues to any financial institution/bank during the year in terms of the structured settlement reached with them.

(xii) According to the information and explanations given to us the Company has not granted loans & advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi / mutual benefit fund/societies.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, debentures and other investments and hence paragraph 4 (xiv) of the Order is not applicable.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions where of are prejudicial to the interest of the company.

(xvi) According to the information and explanations given to us, the term loan taken by the company have been applied for the purpose for which they were raised.

(xvii) In our opinion and according to the information and explanations given to us and shown by the records examined by us, no fund raised on short-term basis have been used for long-term investment during the year.

(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act.

(xix) According to the information and explanations given to us, the Company has not issued any debenture.

(xx) The company has not raised any money by public issue during the year, and hence paragraph 4 (xx) of the Order is not applicable.

(xxi) During the course of our examination of the books and records of the Company, carried out in accordance with generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instances of material fraud on or by the Company, noticed or reported during the year, nor have been informed of such case by management.

For RAGHU NATH RAI & CO.

Chartered Accountants

Firm Regn.No.000451N

(Sharat Prakash)

Place: New Delhi Partner

Dated: 3rd May 2011 Membership No.96267



 
Subscribe now to get personal finance updates in your inbox!