Mar 31, 2015
We have audited the accompanying REVISED standalone financial statements of Jindal Stainless (Hisar) Limited (formerly known as Jindal Stainless (Hisar) Private Limited) ("the Company"), which comprise the REVISED Balance Sheet ("Balance Sheet") as at 31st March, 2015, the REVISED Statement of Profit and Loss ("Statement of Profit and Loss"), the REVISED Cash Flow Statement ("Cash Flow Statement") for the year then ended, and a summary of significant accounting policies and other explanatory information in which impact of the Scheme (as stated in Note no. 26) have been incorporated.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, 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 the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its profit and its cash flows for the year ended on that date.
Emphasis of Matters
Attention is drawn to the followings:
(a) Note no. 34 (B) regarding certain investments and loan & advances considered as good and fully realizable/ recoverable related to certain subsidiary companies, for the reason stated in the said note and no provision for diminution in value is necessary in the opinion of the management.
Our opinion is not modified in respect of above matters.
The standalone financial statements of the Company for the year ended 31st March, 2015 were earlier approved by the Board of Directors at their meeting held on 25th May, 2015, on which we had issued our report dated 25th May, 2015. These financial statements have been reopened and revised to give effect to the Scheme as explained in Note No. 26.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in the paragraph 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
[G) lhe Valance 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 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) On the basis of the written representations received from the directors as on 31st March, 2015 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.
(f) 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-27 and 38 to the 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 was no amount which was required to be transferred by the Company to the Investor Education and Protection Fund
ANNEXURE TO INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph (1) under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date for the year ended 31st March, 2015)
1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) A major portion of the fixed assets has been physically verified by the Management in accordance with a phased programme of verification adopted by the Company. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. To the best of our knowledge, no material discrepancies have been noticed on such verification.
2. (a) As informed, the inventory of the company (except stocks
lying with third parties, in transit), part of the stores and spares, have been physically verified by the management either at the end of the year or after the year end, and in respect of stores and spares, there is perpetual inventory system and a substantial portion of the stocks have been verified 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 inventories followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventories. The discrepancies noticed during physical verification of inventories as compared to book records were not material and the same have been properly dealt within the books of account.
3. The Company has given interest bearing unsecured demand loans to companies, covered in the register maintained under section 189 of the Companies Act, 2013.
(a) In respect of aforesaid loan, the amount, principal as well as interest accrued thereon is repayable on demand and hence, the question of irregularity on payment of principal and interest does not arise.
(b) The aforesaid loan is repayable on demand and therefore, the question of overdue amount does not arise.
4. In our opinion and according to information and explanations given to us, having regard to the explanation that some of the items purchased are of special nature and suitable alternative sources do not exist for obtaining comparable quotations, there are adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchases of inventories, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.
5. According to the information given to us, the company has not accepted any deposits under provisions of section 73 to 76 of ' the Companies Act, 2013 or any other relevant provisions of the Companies Act and the Companies (Acceptance of Deposits) Rules, 2014. No order has been passed with respect to section 73 to 76, by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.
6. We have broadly reviewed the books of account and records maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 148 (1) of the Companies Act, 2013 in respect of the company's products and are of the opinion that, prima facie, the prescribed records have been made and maintained. We have, however, not made a detailed examination of records with a view to determine whether they are accurate or complete.
7. (a) According to the information and explanations given to us, the Company is generally regular in depositing with the appropriate authorities 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 any other statutory dues. There are no arrears as at 31st March, 2015 for a period of more than six months from the date they become payable.
(b) According to the information and explanation given I there are no dues in respect of Income Tax, Wealth and Cess that have not been deposited with appropriate authorities to the extent applicable on acute of any dispute and the dues in respect of sales tax, of excise, Service tax and duty of customs that have been deposited with the appropriate authorities on account of dispute and the forum where the disputes are pending, are given below:
Name of the statue Nature of the Dues Amount Period to which (Rs,in lacs) the amount relates
Central Excise Act, 1944 Excise Duty 1.69 April 1995 to June 1995
658.08 Jan 1999 to Dec 2004
274.80 Aug 2008 to Dec 2010
27.19 Jan 2005 to June 2005
2,960.81 July 2005 to Dec 2007
24.60 July 2011 to Sept.2011
7.63 1994-95 Excise, Rohtak.
59.06 Oct.2011 to sept 2012
206.56 Sept.2012 to july 2013
1.02 April 2007 to Oct 2007
0.74 May 2007 to Oct.2007
5.21 July 2009
The Custom Act, 1962 Custom Duty 60.00 2008-09
Finance ACt,1994 Service Tax 522.83 Dec.2003 to March 2006
9.79 2005-06 to 2010-11
The Central Sales Tax, 1956 Sales Tax 3.00 1993-94
Name of the statue Forum where dispute is pending
Central Excise Act, 1944 High Court, New Delhi
High Court of Punjab & Haryana
Addl. Commissioner of Central
Commissioner (Appeals), Delhi III. Gurgaon
COMMISSIONER (Appeals), Delhi III Gurgaon
High Court of Punjab & Raryana.
High Court of Punjab & Haryana.
High Court of Punjab & Haryana.
The Custom Act, 1962 CESTAT, Delhi.
Finance Act,1994 CESTAT, Delhi.
Commissioner (Appeals & Gurgaon
The Central Sales Tax, 1956 High Court of Punjab & Haryana.
(c) There is no amount payable towards Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under. Hence paragraph 3(vii)(c) of the Order is not applicable to the Company.
8. The Company is in existence for less than five years. Hence, paragraph 3(viii) of the Order with regard to accumulated losses of the Company more than fifty percent of net worth and losses in current financial year and immediately preceding financial year is not applicable to the Company.
9. According to the information and explanations given to us, the Company has not issued any debentures and has not taken any other loan from Banks/Financial Institution. Accordingly, the provision of paragraph 3(ix) of the order is not applicable to the company.
10. According to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from banks. (Read with note no 27 (C)).
11. According to the records of the Company examined by us, the Company has not taken any term loan. Accordingly, the provision of paragraph 3(xi) of the order is not applicable to the company.
12. During the course of our examination of the books and records of the Company, and according to the information and explanations given to us by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.
For N.C. Aggarwal & Co,
Firm Registration No. 003273N
G. K, Aggarwal
Place: New Delhi Partner
Dated: 6th November, 2015