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Auditor Report of Maharashtra Seamless Ltd.

Mar 31, 2015

We have audited the accompanying Standalone Financial Statements of Maharashtra Seamless Limited ("the Company"), which comprises the Balance Sheet as at 31st March, 2015, 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.

2) Management''s Responsibility for the Financial Statements

The Company''s Board of Directors are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (''the act'') with respect to the preparation and presentation 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 principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with rule 7 of Companies (Accounts) Rules, 2014. This responsibility 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; design, implementation and maintenance of adequate internal financial controls, that are 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.

3) Auditor''s Responsibility

Our responsibility is to express an opinion on these 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.

4) 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 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.

5) 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.

6) Opinion

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.

7) Emphasis of Matter

We draw attention to note no 2.42 (ii) to the Financial Statements, relating to the company has given interest free loan to the Jindal Premium Connections Pvt. Ltd. (formerly known as Hydril Jindal international Pvt. Ltd.), Gondkhari Coal Mining Ltd. and Maharashtra Seamless Ltd. Employee Welfare Trust respectively.

8) Report on Other Legal and Regulatory Requirements

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 section143 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.

9) As required by section 143(3) of the Act, we further 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 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 aforesaid standalone financial statements comply with the applicable Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014;

e. On the basis of 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;

10) 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 explanation given to us:

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements as referred to in note no. 2.25 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 and as required on long term forward contracts, refer note no. 2.38 to the financial statements.

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

Annexure to the Independent Auditor''s Report on Financial Statements

Referred to in paragraph 1 of the section on "Report on Other Legal and Regulatory Requirements" of the Auditors'' Report

1. 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 company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As explained to us, the management during the year has physically verified all the fixed assets of the Company and no material discrepancies between the book records and the physical verification were noticed on such verification.

(c) Fixed assets disposed off during the year, were not substantial and, therefore, it does not affect the going concern assumption.

2. In respect of its inventories:

(a) As explained to us, the inventories of finished goods, semi-finished goods, stores, spare parts and raw materials except raw material in transit, lying with the third parties, have 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 inventories 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 has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. In respect of loans, secured or unsecured, granted by the company to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013:

(a) The company has granted loans to seven companies. The maximum amount involved during the year was Rs. 42,440 lacs the year-end balance of loan granted to such companies was Rs. 29,598.29 lacs.

(b) In respect of loans granted by the company the interest payments are regular except refer note no. 2.42 (ii) to the financial statements and the principal amounts are being received / renewed on the due dates.

(c) There is no overdue amount in respect of the above loans.

4. In our opinion, there is an adequate internal control procedure commensurate with the size of the company and the nature of its business for the purchase of stores, raw material including components, plant and machinery, equipment and other assets, and for the sale of goods. Further, on the basis of our examination of the books and records of the company in accordance with the generally accepted auditing practices, we have neither come across, nor have we been informed the existence of major weakness in the internal control procedures and systems.

5. According to the information and explanations given to us, the company has not accepted any deposits during the year from the public within the provisions of Section 73 to 76 of the Companies Act, 2013 and the rules framed there under.

6. We have broadly reviewed the cost records maintained by the company pursuant to the Companies (Cost Records and Audit) Rules 2014 as amended and the u/s 148(1) of the Companies Act, 2013 and are of opinion that prima –facie the prescribed records and accounts have been maintained by the company. However, we have not made a detailed examination of these records to verify whether they are accurate or complete.

7. (a) The company is generally regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-Tax, Sales Tax, Wealth-tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2015 for a period of more than six months from the date of becoming payable.

(b) According to the information and explanations given to us, details of dues of income tax, Sales tax, Custom Duty, Wealth Tax, Excise Duty and Cess which have not been deposited as on 31st March, 2015 on account of any dispute are given below:

Name of Nature of Dues Forum where the Statue Dispute is pending

Sales Tax Demand for Sales Tax Maharashtra Sales Tax Authority (Appellate Tribunal)

Excise Duty Demand for Excise Duty Commissioner Appeal

CESTAT

CESTAT

CESTAT

HIGH COURT

CESTAT

CESTAT

Income Tax Demand for Income Tax Commissioner Appeal



Name of the State Period to which the Amount amount relates (Rs,in Lacs)

Sales Tax 2001-2002 4.65

Excise Duty Jan.1998- 18.70 June 1999

Oct.2002 0.37

2005-2006 3.58

2006-2007 199.45

2006-2007 54.73

2005-2006 75.04

2007-2008 148.42

Income Tax 2009-2010 4.53

2010-2011 4.92

c) The Company has been regular in transferring amounts to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 and rules made there under within time.

8. There are no accumulated losses at the end of the year. There are no cash losses during the financial year and in the immediately preceding financial year.

9. According to the information and explanations given to us and as per the books of account examined by us, the company has not defaulted in repayment of dues to banks. The company does not have any borrowings from any financial institution nor has the Company issued any debentures during the financial year.

10. In our opinion and according to the information and explanations given to us, the terms and conditions of the corporate guarantees given by the company for loan taken by other company from banks are not prima facie prejudicial to the interest of the company.

11. According to the information and explanations given to us by the management, term loans were applied for the purpose, for which the loans were obtained.

12. During the course of our examination of the books and records of the company, carried in accordance with the auditing standards generally accepted in India, we have neither come across any instance of fraud on or by the Company noticed or reported during the course of our audit nor have we been informed of any such instance by the Management.

For Kanodia Sanyal & Associates

Chartered Accountants

FRN: 008396N

R.K.Kanodia

Place: Delhi Partner

Date: 26th May, 2015 Membership no.: 016121


Mar 31, 2013

1) Report on the Financial Statements

We have audited the accompanying financial statements of Maharashtra Seamless Limited (the "Company"), which comprise the Balance Sheet as at March 31,2013, 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, which we have signed under reference to this report.

2) 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'' of India (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.

3) 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.

4) 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 auditors consider 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 Management, as well as evaluating the overall presentation of the financial statements.

5) We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

6) Opinion

In our opinion, and to the best of our information and according to the explanations given to us, the accompanying 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:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

ii) In the case of the Statement of Profit and Loss, of the Profit for the year ended on that date; and

iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

7) Emphasis of Matter

We draw attention to Note No 2.33 to the Financial Statements, relating to the company has given interest free loan of Rs. 11.60 crores during the year (Previous Year Rs. 48 Crores) to Maharashtra Seamless Limited Employee Welfare Trust which had been formed with the sole objective of employee welfare. Our opinion is not qualified in this regard.

8) Report on Other Legal and Regulatory Requirements

As required by ''the Companies (Auditor''s Report) Order, 2003'', as amended by ''the Companies (Auditor''s Report) (Amendment) Order, 2004'', issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act (hereinafter referred to as the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

9) As required by Section 227(3) of the Act, 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, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act;

v) 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 (I) of Section 274 of the Act.

ANNEXURE TO AUDITORS'' REPORT OF MAHARASHTRA SEAMLESS LIMITED (Annexure referred to in our report of even date)

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

(b) The company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As explained to us, the management during the year has physically verified all the fixed assets of the Company and no material discrepancies between the book records and the physical verification were noticed on such verification.

(c) Fixed assets disposed off during the year, were not substantial and, therefore, it does not affect the going concern assumption.

2. (a) As explained to us, the inventories of finished goods, semi finished goods, stores,spare parts and raw materials except raw material in transit, lying with the third parties, have 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 inventories 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 has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. In respect of loans, secured or unsecured, granted or taken by the company to / from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956:

(a) The company has granted loans to five companies during the year. The maximum amount involved during the year was Rs. 16039.95 lacs the year end balance of loan granted to such companies was Rs. 8342.27 lacs. The company has taken loan during the year from one company. The maximum amount involved during the year was Rs. 132.54 lacs, the yearend balance of loan taken from such company was Rs.111.60 lacs.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions are not prima facie prejudicial to the interest of the company

(c) In respect of loans granted by the company the interest payments are regular and the principal amounts are being received /renewed on the due dates. In respect of loans taken by the company, the interest payments are regular and the principal amount is repayable on demand.

(d) There is no overdue amount in respect of the above loans.

4. In our opinion, there is an adequate internal control procedure commensurate with the size of the company and the nature of its business for the purchase of stores, raw material including components, plant and machinery, equipment and other assets, and for the sale of goods. Further, on the basis of our examination of the books and records of the company in accordance with the generally accepted auditing practices, we have neither come across, nor have we been informed the existence of major weakness in the internal control procedures and systems.

5. (a) As per the audit procedures applied by us, and according to the information and explanations given to us by the management, the transactions which are required to be entered in the register maintained under section 301 of the Act have been so entered.

(b) As per the audit procedures applied by us and as per the information and explanations given to us, with respect to the transactions as entered in the register maintained under section 301, with any party during the financial year, the prices at which these have been made are reasonable having regard to the prevailing, market prices at that time.

6. According to the information and explanations given to us, the company has not accepted any deposits during the year from the public within the provisions of Section 58A & 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposit) rules 1975 have been complied with.

7. In our opinion the company has an internal audit system commensurate with the nature and size of its business.

8. We have broadly reviewed the cost records maintained by the company pursuant to the order made by the Central Government for the maintenance of cost records, u/s 209(I)(d) of the Companies Act, 1956 and are of opinion that prima -facie the prescribed records and accounts have been maintained by the company. However, we have not made a detailed examination of these records to verify whether they are accurate or complete.

9. (a) The company is generally regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-Tax, Sales Tax, Wealth-tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 3Ist March 20I3 for a period of more than six months from the date of becoming payable.

(b) According to the information and explanations given to us, details of dues of income tax, Sales tax, Custom Duty, Wealth Tax, Excise Duty and Cess which have not been deposited as on 3Ist March, 20I3 on account of any dispute are given below:

Name of Nature of Dues Forum where the Statue Dispute is pending

Sales Tax Demand for Sales Tax Maharashtra Sales Tax Authority (Appellate Tribunal)

Excise Duty Demand for Excise Duty CESTAT

CESTAT

Commissioner Appeal

CESTAT

CESTAT

CESTAT

CESTAT

CESTAT

Commissioner Appeal

Additional Commissioner

Commissioner Appeal

Income Tax Demand for Income Tax Commissioner

Name of the Statute Period to which the Amount amount relates (Rs.in Lacs)

Sales Tax 2001-2002 4.65

Excise Duty Jan.I998-June I999 18.70

May 1998-Feb. 1999 6.73

Feb.I999-March I999 0.84

Dec. 1999 2.42

April 2000-July 2000 5.03

May 2000-Aug. 2001 3.74

Oct.2002 0.37

2001-2002 3.58

2002-2003 12.12

2005-2006 3.46

2006-2007 199.45

2006-2007 54.73

2007-2008 315.22

2008-2009 580.66

2009-2010 676.77

2009-2010 19.44

Income Tax 2009-2010 4.53

10. There are no accumulated losses at the end of the year. There are no cash losses during the financial year and in the immediately preceding financial year.

11. According to the information and explanations given to us and as per the books of accounts examined by us, the company has not defaulted in the repayment of dues to the financial institutions / banks.

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

13. In our opinion, the company is not a Chit Fund/Nidhi/Mutual Fund/ Society. Therefore, clause 4(xiii) of the Companies (Auditor''s Report) Order 2003 are not applicable to the company.

14. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

15. In our opinion and according to the information and explanations given to us, the terms and conditions of the corporate guarantees given by the company for loan taken by other company from banks are not prima facie prejudicial to the interest of the company.

16. According to the information and explanations given to us, the company has not obtained any term loan during the year; accordingly clauses (xvi) of paragraph 4 of the Order are not applicable to the Company.

17. According to the information and explanations given to us and as per the books and records examined by us, as on the date of balance sheet, the funds raised by the Company on short-term basis have not been applied for long-term investments and vice versa.

18. According to the information and explanations given to us, during the year, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 30I of the Companies Act, I956.

19. The company does not have any debentures outstanding, as on the Balance Sheet date, hence, the clause 4(xix) of the order is not applicable.

20. The company has not raised any money through the public issue during the year. Accordingly, clause 4(xx) of the order is not applicable.

21. According to the information and explanations given to us, and on the basis of our examination of the books and records of the company carried out in accordance with the generally accepted auditing practices in India, we have not come across any such instance of fraud on or by the company, noticed and reported during the year. For KANODIA SANYAL & ASSOCIATES

Chartered Accountants

FRN 008396N

R.K. KANODIA

Place: New Delhi Partner

Dated: 24-05-2013 Membership No.016121

 
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