Mar 31, 2018
INDEPENDENT AUDITOR''S REPORT
To the members of
MSP Steel & Power Limited
Report on the Standalone Ind AS Financial Statements
1. We have audited the accompanying Standalone Ind AS financial statements ("Financial Statement") of MSP STEEL & POWER LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Ind AS Financial Statements
2.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 financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standard) Rules 2015, as amended, and other accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
3. Our responsibility is to express an opinion on these financial statements based on our audit.
In conducting 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 and the order issued under section 143 (11) of the Act.
We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative announcements issued by Institute of Chartered Accountants of India. Those Standards and pronouncements 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. 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.
5. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Opinion
6. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 March 31, 2018, and its loss, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Other Matter
7. The financial statement of the Company for the year ended March 31, 2017, prepared in accordance with companies (Indian Accounting Standard) Rules, 2015 was audited by another firm of Chartered Accountants who, vide their report dated May 27, 2017, expressed an unmodified opinion on those financial statements.
Our opinion is not modified in respect of this matter. Report on Other Legal and Regulatory Requirements
8. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.
9. As required by Section 143(3) of the Act, based on our audit, we report, to the extent applicable 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.
c. The Balance Sheet, the Statement of Profit and Loss including other comprehensive income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account
d. In our opinion, the aforesaid financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.
e. On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.
f.With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls refer to our separate Report in "Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.
g. 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, as amended, 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 as stated in note 36 to the financial statement;
II. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
III. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company. IV. The disclosures in the financial statements regarding holdings as well as dealings in specified bank notes during the period from November 08, 2016 to December 30, 2016 have not been made since they do not pertain to the financial year ended March 31, 2018.
For Singhi & Co.,
Chartered Accountants
Firm''s Registration No. 302049E
(Shrenik Mehta) Partner
Membership No.063769
Place: Kolkata
Date: May 30, 2018
ANNEXURE - A TO THE INDEPENDENT AUDITOR''S REPORT
(Referred to in paragraph 8 with the heading ''Report on Other Legal and Regulatory Requirements'' section of our report of even date in respect to statutory audit of MSP STEEL & POWER LIMITED for the year ended March 31, 2018)
We report that:
i. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
b. All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
c. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company as shown in note no. 2 of the financial statements except freehold land gross value of INR 6.51 lakh (Net carrying amount INR. 6.51 lakh) titles for which is pending registration.
ii. The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification.
iii. According to the information and explanations given to us: a. The Company has granted loans to two companies covered in the register maintained under section 189 of the Companies Act, 2013. In our opinion and according to the information and explanations given to us, the terms and conditions of the grant of such loans are not prejudicial to the Company''s interest.
b. The loans granted are re-payable on demand. We are informed that the Company has not demanded repayment of any such loan during the year, and thus, there has been no default on the part of the parties to whom the money has been lent. However, the payment of interest has not been regular.
iv. In our opinion and according to the information and explanations given to us, the Company has not advanced loans to directors / to a company in which the Director is interested to which provisions of section 185 of the Companies Act, 2013 apply and hence not commented upon. In our opinion and according to the information and explanations given to us, provision of section 186 of the Companies Act, 2013 in respect of loans and advances given, investments made and, guarantees and securities given have been complied with by the Company.
v. The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
vi. We have broadly reviewed the books of accounts maintained by Company in respect of product, where pursuant to the rule made by the Central Government of India the maintenance of cost records has been prescribed under section 148 (1) of the Companies Act 2013 and are of the opinion that, prima facie, the prescribed records have been maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
vii. According to the information and explanations given to us and on the basis of our examination of the records of the Company: a.The Company is regular in depositing undisputed statutory dues including Provident fund. Employee''s state insurance, Income tax, Sales tax, Service tax, Duty of Customs, Duty of Excise, Value added tax, cess, Goods and Service tax and Other material statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, Employees'' state insurance Income tax, Sales tax, Service tax, Duty of customs, Duty of excise, Value added tax, Goods and Service tax, cess, and Other material statutory dues were in arrears as at March 31, 2018 for a period of more than six months from the date they became payable except as below:
Nature of Statute |
Nature of Dues |
Amount (Rs. In lacs) |
Period to which the amount relates |
Income Tax Act, 1961 |
Income Tax |
19.02 |
2002-03, 2005-06, 2006-07, 2008-09 and 2009-10 |
b. According to the information and explanation given to us, the dues of Sales tax. Service tax, Income tax, Value added tax and duty of excise and cess, which have not been deposited on account of any dispute and the forum where the dispute is pending as at March 31,,2018 are as under:-
Nature of Statute |
Nature of Dues |
Amount (Rs.ln lacs) |
Period to which the amount relates |
Forum where the Dispute is Pending |
Central Excise Act, 1944 |
Excise Duty |
1,119.57 |
2006-07 to 2015-16. |
Chief Commissioner-Raipur |
Excise Duty |
23.12 |
2009-10 |
Additional Deputy Commissioner -Bilaspur |
|
The Finance Act 1994 |
Service Tax |
182.62 |
2014-15 |
ITAT |
Income Tax Act, 1961 |
Income Tax |
383.78 |
2004-05, 2007-08, 2010-11, 2011-12 |
Assessing Officer (rectification) |
Income Tax |
295.29 |
2010-11, 2013-14,2014-15 |
Commissioner of Income Tax (Appeals) |
|
Central Sales Tax |
Central Sales Tax |
29.18 |
2009-10 |
CESTAT, New Delhi |
Central Sales Tax |
92.01 |
2010-13 |
Additional Commissioner of Sales tax |
viii. The Company has defaulted in repayment of dues to Banks during the Financial Year 2017-18. However, the Joint lenders'' forum (JLF) of the Company adopted the scheme for restructuring of loan as approved by the Overseeing Committee (OC) of Reserve Bank of India on October 24, 2017 with reference date as July 31, 2017. (Refer Note 45 of the Financial Statements.)
ix. In our opinion and according to the information and explanations given by the management, the Company has utilized the monies raised by way of term loans for the purposes for which they were raised. Based on the information and explanations given by the management, the Company has not raised any money by way of initial public offer, further public offer and debt instruments.
x. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no material fraud by the Company or no material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
xi. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.
xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable Indian accounting standards.
xiv. According to the information and explanations given by the management, the Company has complied with provisions of section 42 of the Companies Act, 2013 in respect of the preferential allotment or private placement of shares during the year.
xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
xvi. According to the information and explanations given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
For Singhi & Co., |
|
Chartered Accountants |
|
Firm''s Registration No. 302049E |
|
(Shrenik Mehta) |
|
Partner |
|
Membership No. 063769 |
|
Place: Kolkata |
|
Date: May 30, 2018 |
ANNEXURE-B TO THE INDEPENDENT AUDITOR''S REPORT
The Annexure referred to in paragraph 9(f) under the heading "Report on Other Legal and Regulatory Requirements" of our Independent Auditors'' Report of even date in respect to the internal financial control under clause (i) of sub-section 3 of section 143 of the Act of MSP STEEL & POWER LIMITED for the year ended March 31, 2018, we report that:
1. We have audited the internal financial controls over financial reporting of MSP STEEL & POWER LIMITED ("the Company") as of March 31, 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
MANAGEMENT''S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
2. The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
AUDITOR''S RESPONSIBILITY
3. Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
6. A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
OPINION
8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For Singhi & Co., |
|
Chartered Accountants |
|
Firm''s Registration No. 302049E |
|
(Shrenik Mehta) |
|
Partner |
|
Membership No.063769 |
|
Place: Kolkata |
|
Date: May 30, 2018 |
To the members of
MSP Steel & Power Limited
Report on the Consolidated Ind AS Financial Statements
1.We have audited the accompanying consolidated Ind AS financial statements of MSP STEEL & POWER LIMITED (hereinafter referred to as "the Holding Company") and its subsidiary (the Holding Company and its subsidiary together referred to as "the Group"), its Associate and Joint venture, comprising the Consolidated Balance Sheet as at March 31, 2018, the Consolidated Statement of Profit and Loss (including Other Comprehensive Income), the Consolidated Cash Flow Statement and the Consolidated Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the Consolidated Ind AS Financial Statements").
Management''s Responsibility For the Consolidated Ind AS Financial Statements
2. The Holding Company''s Board of Directors is responsible for the preparation of these Consolidated Ind AS financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as "the Act") that give a true and fair view of the consolidated financial position, consolidated financial performance including other comprehensive income, consolidated cash flows and consolidated changes in equity of the Group including its Associate and Joint Venture in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standard) Rules, 2015, as amended. The respective Board of Directors of the companies included in the Group and of its Associate and Joint Venture are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and of its Associate and Joint Venture 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 Consolidated Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the Consolidated Ind AS financial statements by the Directors of the Holding Company, as aforesaid.
AUDITOR''S RESPONSIBILITY
3. Our responsibility is to express an opinion on these Consolidated Ind AS financial statements based on our audit. While conducting the 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.
4. We conducted our audit of the Consolidated Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative announcements issued by Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Consolidated Ind AS financial statements are free from material misstatement.
5. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Consolidated Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Consolidated Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company''s preparation of the Consolidated Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company''s Board of Directors, as well as evaluating the overall presentation of the Consolidated Ind AS financial statements.
6. We believe that the audit evidence obtained by us and the audit evidence obtained by other auditors in terms of their report referred to in the sub-paragraph of the other matters below, is sufficient and appropriate to provide a basis for our audit opinion on the Consolidated Ind AS financial statements.
Opinion
7. In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of reports of other auditors on separate financial statements of the Subsidiary and its Associate and Joint Venture referred to below in the other matters paragraph, the aforesaid Consolidated Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the Consolidated state of affairs of the Group, its Associate and Joint venture as at March 31, 2018, and their Consolidated Loss (including Consolidated total comprehensive income), their Consolidated cash flows and the Consolidated statement of changes in equity for the year ended on that date.
OTHER MATTERS
8. We did not audit the financial statements/financial information of subsidiary whose financial statements/financial information reflect total assets of Rs. 62.82 lakh and net assets of Rs. 58.07 Lakh as at March 31, 2018, total revenue of Rs. Nil, total comprehensive income of Rs. Nil (comprising profit and other comprehensive income) as considered in the statement. Further, we did not audit the financial statements of the Associate and the Joint Venture whose share of total comprehensive Income considered for consolidation is Rs. 972.54 lakh and Rs.1.33 lakh respectively. These financial statements / financial information have been audited by other auditors whose reports have been furnished to us by the management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of the subsidiary, the Associate and the Joint Venture are based solely on the report of other auditors.
Our opinion on the statement is not modified in respect of the above matter with regard to our reliance on the work done and the reports of the other auditors.
9. The Consolidated IND AS financial statement of the Company for the year ended March 31, 2017 prepared in accordance with companies (Indian Accounting Standard) Rules, 2015 was audited by another firm of Chartered Accountants who, vide their report dated May 27, 2017, expressed an unmodified opinion on those financial statements.
Our opinion is not modified in respect of the aforementioned matter. REPORT ON OTHER LEGAL AND
REGULATORY REQUIREMENTS
10. As required by Section 143(3) of the Act, based on our audit and on the consideration of the report of the other auditors on the separate financial statements and the other financial information of the subsidiary. Associate and Joint Venture, referred to in the ''other matter'' paragraph above, we report, to the extent applicable that:
a) We /other auditors whose reports we have relied upon, 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 of the aforesaid Consolidated Ind AS financial statements.
b) In our opinion, proper books of account as required by law relating to the preparation of aforesaid Consolidated Ind AS financial statements have been kept so far as it appears from our examination of those books and reports of the other auditors.
c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including Other Comprehensive Income, the Consolidated Cash Flow Statement and Consolidated Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of accounts maintained for the purpose of preparation of the Consolidated Ind AS financial statements.
d) In our Indian opinion, the aforesaid consolidated Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with the Companies (Indian Accounting Standard) Rules, 2015, as amended;
e) On the basis of the written representations received from the directors of the Holding Company as on March 31, 2018 taken on record by the Board of Directors of the Holding Company and the reports of statutory auditors of its subsidiary company, Associate company and Joint Venture, none of the directors of Group''s Companies, it''s Associate and Joint Venture is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Group and the operating effectiveness of such controls refer to our separate Report in "Annexure A", which is based on the audit reports of the Holding Company and its subsidiary company, Associate Company and Joint Venture incorporated in India.
g) 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, as amended, in our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the report of the other auditors on separate financial statements as also the other financial information of the Subsidiary, Associate and Joint Venture, as noted in the ''Other matter ''paragraph:
i.The Consolidated Ind AS financial statements has disclosed the impact of pending litigations on the Consolidated financial position of the Group as stated in Note 36 to the Consolidated financial statement;
ii. The Group did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
iv. The disclosures in the consolidated financial statements regarding holdings as well as dealings in specified bank notes during the period from November 08, 2016 to December 30, 2016 have not been made since they do not pertain to the financial year ended 31st March 2018.
For Singhi & Co., |
|
Chartered Accountants |
|
Firm''s Registration No. 302049E |
|
(Shrenik Mehta) |
|
Partner |
|
Membership No. 063769 |
|
Place: Kolkata |
|
Date: May 30, 2018 |
ANNEXURE-A TO THE INDEPENDENT AUDITOR''S REPORT
The annexure referred to in paragraph 10 (f) under the heading "Report on Other Legal and Regulatory Requirements" of our Independent Auditor''s Report of even date in respect to the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act") of MSP Steel & Power Company Limited for the year ended March 31, 2018, we report that:
In conjunction with our audit of the consolidated Ind AS financial statements of the Company as of and for the year ended March 31, 2018, we have audited the internal financial controls over financial reporting of the Holding Company. Based on comments made by the independent auditors of the Subsidiary company, its Associate and Its Joint Venture which are incorporated in India (covered entities) with respect to the internal financial controls over financial reporting as required in terms of sub-section (3)(i) of section 143 of the Act, we report as under:
Management''s responsibility for Internal Financial Controls
The respective Board of Directors of the Holding Company and the covered entities are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Holding Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditor''s Responsibility
Our responsibility is to express an opinion on the Holding Company''s and covered entities internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditor in terms of their reports referred to in the Other Matters Paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Holding Company, its Subsidiary company, its Associate and its Joint Venture, which are companies incorporated in India, have, maintained in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Holding Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
OTHER MATTERS
Our report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting with reference to these consolidated Ind AS financial statements of the Holding Company, insofar as it relates to this the Subsidiary Company and the Associate Company and the Joint Venture, which are companies incorporated in India, is based on the corresponding reports of the auditors of such Subsidiary and Associate and Joint Venture incorporated in India.
For Singhi & Co. |
|
Chartered Accountants |
|
Firm''s Registration No. 302049E |
|
(Shrenik Mehta) |
|
Partner |
|
Membership No. 063769 |
|
Place: Kolkata |
|
Date: May 30, 2018 |
Mar 31, 2016
1. Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of MSP Steel & Power Limited (''the Company''), which comprise the Balance Sheet as at 31st March 2016, 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.
2. Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in sub-section 5 of section 134 of the Companies Act, 2013 (''the Act'') with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
3. Auditors'' Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under sub-section 10 of section 143 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 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. 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.
4. 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 2016, and its loss and its cash flows for the year ended on that date.
5.Report on Other Legal and Regulatory Requirements
1 As required by the Companies (Auditor''s Report) Order, 2016 (''the Order''), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we enclose in the Annexure-A, a statement on the matters specified in paragraphs 3 and 4 of the order.
2 As required by sub-section 3 of Section 143 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 accounts 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, 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 2016 and taken on record by the Board of Directors, none of the directors are disqualified as on 31st March 2016, from being appointed as a director in terms of subsection 2 of Section 164 of the Act.
f With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in ''Annexure B'' and
g With respect to the other matters to be included in the Auditors'' 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 35 to the financial statements;
ii. Provision has been made in the financial statements, as required under the applicable laws or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivatives contracts - Refer Note 46 to the financial statements;
iii. There is no amount required to be transferred to the Investor Education and Protection Fund by the Company.
The Annexure referred to in Independent Auditors'' Report to the members of MSP Steel & Power Limited (''the Company'') for the year ended 31st March 2016. We report that:
(i) (a) According to the information & explanation given to us and based on the records produced before us, we are of the opinion that the Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) According to the information & explanation given to us, all the fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. As informed, no material discrepancies have been noticed on such verification.
( c) According to the information and explanations given to us and based on the records produced before us, the title deeds of the immovable properties are held in the name of the Company except as reported in Note 11 to the financial statement..
(ii) According to the information & explanation given to us Inventory has been physically verified by management during the year. No material discrepancies were noticed that would have an impact over the Financial Statements.
(iii) According to the information & explanation given to us, the Company has granted loans to parties covered in the register maintained under Section 189 of the Companies Act 2013 (''the Act'').
(a) In our opinion, the rate of interest and other terms and conditions on which the loans had been granted to the parties listed in the register maintained under Section 189 of the Act were not, prima facie, prejudicial to the interest of the Company.
(b) In the case of the loans granted to the parties listed in the register maintained under Section 189 of the Act, the borrowers have been regular in the payment of principal and interest as stipulated.
(c) There are no overdue amounts in respect of the loan granted to the parties listed in the register maintained under Section 189 of the Act.
(iv) According to the information & explanation given to us, we are of the opinion that in respect of loans, investments, guarantees and security, provisions of Section 185 and 186 of the Companies Act, 2013 have been complied with.
(v) According to the information & explanation given to us, the Company has not accepted any deposits from the public in accordance with the provisions of Section 73 to 76 of the Act and the rules framed there under.
(vi) According to the information & explanation given to us, the company has maintained cost records as specified by Central Government under sub-section (1) of section 148 of the Act.
(vii) (a) According to the books and records as produced and audited by us in accordance with generally accepted auditing practices in India and also Management representations, undisputed statutory dues in respect of provident fund, employees'' state insurance, income tax, sales tax, wealth tax, value added tax, service tax, customs duty, excise duty, cess and other statutory dues, if any, applicable to it, has been regularly deposited with the appropriate authorities.
According to the information and explanations given to us and record produced before us, there is no undisputed amounts payable in respect of statutory dues as aforesaid were outstanding, as at 31st March 2016 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there are no dues of sales tax, value added tax, income tax, customs duty, service tax, excise duty and cess which have not been deposited on account of any dispute, except:
Name of the statute |
Nature of dues |
Year |
Amt. in Lacs |
Forum where dispute is pending |
Central and Local Sales Tax Acts(*) |
Sales Tax including Non collection of C Forms and disallowance of VAT Credit |
2004 2012 |
305.29 |
Appellate Authority up to Joint Commissioner Level. |
Central Excise Act, 1944 |
Excise Duty including interest and penalty, if applicable |
2004 2012 |
105.35 |
Appellate Authority up to Commissioner'' s level. |
Central Excise Act, 1944 |
Excise Duty including interest and penalty, if applicable |
2005 2012 |
1,579.64 |
Customs, Excise and Service Tax Appellate Tribunal |
Income-tax Act, 1961
|
Disallowance of TDS
|
2004-2005 |
0.55 |
Deputy/ Assistant Commissioner of the Income Tax |
(*) Rs. 21.73 lacs deposited under protest against the dues
(viii) According to the information & explanation given to us and based on the records produced before us, the company has not defaulted in repayment of dues to financial institutions, banks, Government or dues to debenture holders.
(ix) According to the information & explanation given to us and based on the records produced before us the Company has not raised moneys by way of initial public offer or further public offer (including debt instruments). Accordingly paragraph 3(ix) of the order is not applicable.
(x) During the course of our examination of books of account carried in accordance with generally accepted accounting standards in India, we have neither come across any instances of fraud on or by the Company by its officers or employees, either noticed or reported during the year, nor have we been informed of such case by Management.
(xi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V of the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) is not applicable.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Section 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has made preferential allotment of Preference Shares during the year and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934.
For Sunil Kumar Agrawal & Associates
Firm Registration No: 323133E
Chartered Accountants
CA Sunil Kumar Agrawal
Date: 27th May, 2016 Partner
Place: Kolkata Membership No: 057731
Mar 31, 2015
We have audited the accompanying financial statements of MSP Steel &
Power Limited (the Company'), which comprises the Balance Sheet as at
31st March, 2015, the Statement of Profit and Loss and the Cash Flow
Statement for the year ended on that date 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 is responsible for the matters
stated in sub-section 5 of Section 134 of the Companies Act, 2013
('the Act') with respect to 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 principles generally accepted in India, including the
Accounting Standards specified under section 133 of the Act read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of the
company and for preventing and detecting frauds and other
irregularities, selection and application of appropriate accounting
policies, making judgments and estimates that are reasonable and
prudent and design, implementation and maintenance of adequate internal
financial controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
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
thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under sub-section 10 of Section 143 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 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 financial
statements.
4. OPINION
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid 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 loss, and its cash flows for the year
ended on that date.
5. 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
exercise of powers conferred by sub-section 11 of Section 143 of the
Act, we enclose in the Annexure a statement on the matters specified in
paragraphs 3 and 4 of the order.
2. As required by sub-section 3 of Section 143 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 accounts 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, 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 financial statement comply with the
Accounting Standards specified under section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
e) 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 are disqualified as on 31st March,
2015, from being appointed as a director in terms of sub- section 2 of
Section 164 of the Act.
f) With respect to the other matters to be included in the Auditors'
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 Companies has disclosed the impact of pending litigations on its
financial position in its financial statements ÂRefer Note 35 to the
financial statements;
ii. Provision has been made in the financial statements, as required
under the applicable laws or accounting standards, for material
foreseeable losses, if any, on long-term contracts including
derivatives contracts  Refer Note 46 to the financial statements;
iii. There is no required to be transferred to the Investor Education
and Protection Fund by the Company.
The Annexure referred to in our report to the members of MSP Steel &
Power Limited ('the Company*) for the year ended 31st March 2015. We
report that:
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As explained to us, all the fixed assets have not been physically
verified by the management during the year but there is a regular
programme of verification which, in our opinion, is reasonable having
regard to the size of the Company and nature of its assets. As
informed, no material discrepancies have been noticed on such
verification.
(ii) (a) As informed to us, a part of the inventory has been physically
verified by the management during the year. In respect of inventory
lying with third parties, these have substantially been confirmed by
them. In our opinion, the frequency of such verification is reasonable.
(b) As per the information given to us, the procedures of physical
verification of inventories followed by the management, in our opinion,
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, the discrepancies noticed on verification between the
physical stocks and the book records were not material and the same
have been properly dealt with in the books of account.
(iii) (a) The Company has granted loans to a party covered in the
register maintained under section 189 of the Act. The maximum amount
outstanding during the year was Rs. 288.83 lacs and the year end balance
of loan given to such party was Rs. NIL.
(b) The principal amounts and interest are being received regularly as
per stipulations.
(c) In respect of the aforesaid Loans, there is no overdue amount more
than Rs. one lacs.
(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 with regard
to purchase of inventories and fixed assets and sale of goods and
services. In our opinion and according to the information and
explanations given to us, there is no continuing failure to correct
major weakness in internal control system.
(v) The Company has not accepted any deposits from the public in
accordance with the provisions of Section 73 to 76 of the Act and the
rules framed there under.
(vi) We have broadly reviewed the records maintained by the company
pursuant to the rules prescribed by the Central Government for
maintenance of cost records under sub-section 1 of Section 148 of the
Act and are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained. However, we have not made a
detailed examination of the records.
(vii) (a) According to the information and explanations given to us and
on the basis of our examination of the records of the Company, amounts
deducted/accrued in the books of account in respect of undisputed
statutory dues including Provident fund, Professional tax, Employees'
state insurance, Income tax, Sales tax, Value added tax, Wealth tax,
Service tax, Customs duty, Excise duty, Cess and other material
statutory dues have been regularly deposited during the year by the
Company with the appropriate authorities.
According to the information and explanations given to us, no
undisputed amounts payable in respect of statutory dues as aforesaid
were outstanding, 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, there
are no dues of sales tax, value added tax, income tax, customs duty,
wealth tax, service tax, excise duty and cess which have not been
deposited on account of any dispute, except:-
Name of the statute Nature of dues Year
Sales Tax including
Non collection
Central and Local of C Forms and 2004-2012
Sales Tax Acts(*) disallowance of VAT Credit
Excise Duty including
Central Excise Act, interest and penalty, if 2004-2012
1944 applicable
Excise Duty including
Central Excise Act, interest and penalty, if 2005-2012
1944 applicable
Income-tax Act, 1961 Disallowance of TDS 2004-2005
Name of the Statute Amount Forum where dispute is
(Rs. in lacs) pending
Central and Local Sales 400.28 Appellate Authority upto Joint
Tax Acts(*) Commissioner Level.
Central Excise Act, 1944 584.47 Appellate Authority upto
Commissioner's level.
Central Excise Act, 1944 1,519.05 Customs, Excise and Service
Tax Appellate Tribunal
Income-tax Act, 1961 0.55 Deputy/Assistant
Commissioner of Income Tax
(*) Rs. 21.73 lacs deposited under protest against the dues.
(c) According to the information and explanations given to us and on
the basis of our examination of the records of the Company, there is no
amount required to be transferred to Investor Education and Protection
Fund in accordance with the relevant provisions of the Companies Act,
and Rules made thereunder.
(viii) The Company does not have accumulated losses at the end of the
financial year. The Company has incurred cash loss of Rs. 9,815.48 lacs
during the financial year covered by our audit and cash loss of Rs. NIL
in the immediately preceding financial year.
(ix) As per our audit procedures and according to the information and
explanations given to us, there is no continuing default in repayment
of installments and interest dues to financial institutions and banks
as on the balance sheet date.
(x) According to the information and explanations given to us, the
Company has given guarantees aggregating Rs. 2,812.50 lacs for loan taken
by a subsidiary from a Bank, the terms and conditions whereof, in our
opinion, based on management representation, 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, we report that the Term Loans taken by the company have
been applied for the purpose for which they were raised.
(xii) According to the information and explanations given to us, no
instances of material fraud on or by the Company has been noticed or
reported during the course of our audit.
For Sunil Kumar Agrawal & Associates
Firm Registration No: 323133E
Chartered Accountants
CA Sunil Kumar Agrawal
Partner
Membership No: 057731
Date: 6th June, 2015
Place: Kolkata
Mar 31, 2014
1 Report on the financial statements We have audited the accompanying
financial statements of MSP Steel & Power Limited (Rs.the CompanyRs.), which
comprises the Balance Sheet as at 31st March, 2014, 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.
2 Management''s responsibility for the financial statements The
Management is re- sponsible for the preparation of these financial
state- ments that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub section (3C) of Section 211
of the Companies Act, 1956 (''the Act'') read with the Gen- eral Circular
15/2013 dated 13th September,2013 of the Ministry of Corporate Afairs
in respect of Section 133 of the Companies Act, 2013. This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and pre- sentation 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 responsibil- ity is to express an
opinion on these financial state- ments 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 require- ments and plan and perform the
audit to obtain reason- able assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to ob- tain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected de- pend on the auditor''s judgment, including the
assess- ment of risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
efectiveness of the entity''s internal control. An audit also includes
evaluating the appropri- ateness of accounting policies used and
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 ob- tained is sufcient and
appropriate to provide a basis for our audit opinion.
In our opinion and to the best of our informa- tion and according to
the explanations given to us, the financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
(i) In the case of the Balance Sheet, of the state of afairs of the
Company as at 31st March,2014; (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.
5 report on other legal and regulatory requirements
(i) As required by the Companies (Auditors'' Re- port) Order 2003 (''the
Order''), as amended, is- sued 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.
(ii) As required by the Section 227(3) of the Act, we report that: a |
We have obtained all informa- tion and explanations which to the best
of our knowl- edge and belief were necessary for the purpose of our
audit; b | In our opinion proper books of ac- counts as required by the
law have been kept by the Company so far as appears from our
examination of those books; c | The Balance Sheet, Statement of profit
and Loss and Cash Flow Statement dealt with by this report are in
agreement with the books of ac- counts; d | In our opinion, the Balance
Sheet, State- ment of profit and Loss and Cash Flow Statement com- ply
with the Accounting Standards referred to in sub section (3C) of
Section 211 of the Companies Act 1956 read with the General Circular
15/2013 dated 13th September,2013 of the Ministry of Corporate Afairs
in respect of Section 133 of the Companies Act, 2013; and e | On the
basis of written representations re- ceived from the directors as on
the 31st March, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31st March,2014,- from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Companies Act,1956;
The annexure referred to in our report to the members of msp steel &
power limited (''the company'') for the year ended 31st march 2014
(i) a The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets. b As explained to us, all the fixed assets have not been
physically verifed by the management during the year but there is a
regular programme of verifcation which, in our opinion, is reasonable
keeping in mind the size of the Company and nature of its assets. As
infor med, no material discrepan- cies were noticed on such
verifcation. c There was no substantial disposal of fixed assets
during the year. (ii) a) As informed to us, a part of the inventory
has been physically verifed by the management during the year. In our
opinion, the frequency of such verification is reasonable. b) As per
the information given to us, the procedures of physical verifcation of
inven- tories followed by the management, in our opinion, 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, the discrepancies noticed on veri-
fcation between the physical stocks and the book re- cords were not
material and the same have been prop- erly dealt with in the books of
account. (iii) a) The Company has granted loans to a party covered in
the register maintained under section 301 of the Companies Act, 1956.
The maximum amount outstanding during the year was Rs. 1198.25 lacs and
the year end balance of loans given to such parties was Rs. 288.83 lacs.
b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of
loan as aforesaid are not prima facie prejudicial to the interest of
the Company. c) The above loans are stated to be repayable on demand.
As informed, the repayment of above loans, to the extended demanded
from the bor- rowers, during the year had been received by the Com-
pany and thus, there has been no default on the part of the borrower.
The payment of interest with respect to such loans is stated to be
regular. d) According to the information and explanations given to us,
all loans given are repayable on demand and accordingly there is no
overdue amount of loans granted to such parties. e) The Company has
taken loans from nine parties (including interest free loan from seven
par ties) covered in the register maintained under section 301 of the
Companies Act, 1956. The maximum amount outstanding during the year was
Rs. 5,175.76 lacs and the year end balance of loans taken from such
parties was Rs. 4,957.50 lacs. f) In our opinion and according to the
information and explanations given to us, the rate of interest and
other ter ms and conditions for such loan are prima facie not
prejudicial to the interest of the Company. g) As informed, the loan
taken and interest thereon (wherever applicable) is payable after
one year, and thus, there has been no default on part of the Company in
repayment of loan and interest. (iv) In our opinion and according to
the infor ma- tion and explanations given to us, there are adequate
internal control procedures commensurate with the size of the Company
and the nature of its business for the purchase of inventory, fixed
assets and with regard to sale of goods. During the course of our
audit, we have neither observed nor have been in- formed of any major
weaknesses in the said internal control system.
(v) a) According to the information and explanations given to us, we
are of the opinion that the transactions that need to be entered in the
register maintained under Section 301 of the Companies Act, 1956 have
been so entered. b) In our opinion and according to the infor ma-
tion and explanations given to us, the transactions made in pursuance
of such contracts or arrangements entered in the register maintained
under Section 301 of the Compa- nies Act, 1956 and exceeding the value
of rupees five lacs in respect of any party during the period under
audit, have been made at prices which are reasonable having regard to
the prevailing market prices at the relevant time. (vi) No deposits
within the meaning of Section 58A, 58AA or any other relevant
provisions of the Compa- nies Act, 1956 and the rules framed there
under have been accepted by the Company.
(vii) The Company has an internal audit system commensurate with the
size and nature of the Company.
(viii) As informed to us, the Company has made and maintained cost
records as prescribed by the Central Government under Section 209(1)
(d) of the Act. We have not made a detailed examination of such
records. However, we have broadly reviewed the records main- tained
and are of the opinion, that prima facie, the pre- scribed accounts and
records have been maintained.
(ix) a) According to the records of the Company examined by us, in
our opinion, the Company is generally regular in depositing with the appropriate authorities undisputed statutory dues including provident
fund, investor education protection fund, em- ployees'' state insurance,
income tax, sales tax, wealth tax, service tax, customs duty, excise
duty, cess and other material statutory dues applicable to it.
According to the information and explanations given to us, no
undisputed amounts payable in respect of statutory dues as aforesaid
were outstanding, as at 31st March 2014 for a period of more than six
months from the date they became payable, except entry tax for Rs. 254.83
lacs. b | According to the information and explanations given to us,
there are no dues of sales tax, income tax, customs duty, wealth tax,
service tax, excise duty and cess which have not been deposited on
account of any dispute, except:
Name of the nature of year amount forum where
statute dues (Rs. in dispute is
lacs) pending
Central Sales Tax Non-collection o 2004 Â 08 119.75 Appellate, Deputy
Act, 1956 (*) C Forms Commissioner,
Commercial Tax
West Bengal Disallowance of 2007 Â 08 10.39 Joint Commis-
Value Added VAT credit sioner of Sales
Tax Tax, 2003
Kolkata
Central Excise Removal of 2006 Â 08 38.79 Additional
Act, 1944 finished goods Commissione
without of Excise
payment of duty
Central Excise Removal of 2005 Â 09 105.23 CESTAT
Act, 1944 fnished goods
without
payment of duty
Central Excise Sale of Electricity 2005 Â 09 131.90 CESTAT
Act, 1944 without payment
of duty
Central Excise Sale of Electricity 2010 Â 11 79.84 Additional
Act, 1944 without payment Commissioner
of duty of Excise
Central Excise Disputed 2005 Â 12 1,220.15 CESTAT
Act, 1944 disallowances of
cenvat credit and
service tax
Central Excise Disputed 2007 Â 08 1.08 Additional
Act, 1944 disallowances of Commissioner
cenvat credit and of Excise
service tax
Central Excise Sale of iron ore 2009 Â 10 31.89 CESTAT
Act, 1944 and fnes without
payment of duty
Central Excise Sale of iron ore 2004 Â 11 278.71 Additional
Act, 1944 and fnes without Commissioner
payment of duty of Excise
Central Excise Sale of iron ore 2008 Â 12 3.38 CCE(A)
Act, 1944 and fnes without
payment of duty
Income-tax Act,Disallowance of 2004 Â 05 0.55 Deputy/
1961 TDS Assistant
Commissione of
Income Tax
(*) Rs. 21.73 lacs deposited under protest against the dues.
(x) The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred any cash losses during the
financial year cov- ered by our audit and in the immediately preceding
financial year.
(xi) As per our audit procedures and according to the information and
explanations given to us, based on the documents and records produced
to us, as on 31st March,2014,there is no continuing default in re-
payment of installments and interest dues to financial institutions and
banks.
(xii) According to the information and explanations given to us and
based on the documents and records produced 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. (xiii) The Company is not a
chit fund or a nidhi/ mutual benefit fund/society.
(xiv) In our opinion and according to the informa- tion and
explanations given to us, the Company is not a dealer or trader in
shares, securities, debentures and other investments.
(xv) According to the information and explanations given to us, the
Company has given guarantees aggre- gating Rs. 4,879.42 lacs for loan
taken by a subsidiary from a Bank and onward guarantee given by a Joint
Venture Company to Ministry of Coal, the terms and conditions whereof,
in our opinion, based on manage- ment representation, are not
prima-facie prejudicial to the interest of the Company.
(xvi) According to the infor mation and explanations given to us, in
our opinion, the term loans raised were utilized for the purposes for
which they were obtained. (xvii) According to the information and
explana- tions given to us and on an overall examination of the Balance
Sheet of the Company, we repor t that no funds raised on short-term
basis have been used for long- term investment.
(xviii) The Company has made allotment of pref- erence shares for Rs.
12,000.00 lacs during the year to companies covered in the Register
maintained under Section 301 of the Act. In our opinion and according
to the infor mation and explanations given to us, the price at which
such shares have been issued is prima-facie, not prejudicial to the
interest of the Company.
(xix) The Company has not issued any debentures during the period under
audit.
(xx) The Company has not raised any money by pub- lic issue during the
period under audit. (xxi) According to the information and explana-
tions given to us, no material fraud on or by the Com- pany has been
noticed or reported during the year.
For sunil kumar agrawal & associates
Chartered Accountants
Firm Registration No. - 323133E
ca sunil kumar agrawal
Partner
Membership No: 057731
place: Kolkata
date: 30th May, 2014
Mar 31, 2012
1. We have audited the attached Balance Sheet of MSP Steel & Power
Limited ('the Company') as at 31st March, 2012 and also the Statement
of Profit & Loss 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.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Attention is drawn to the tax treatment regarding gain of Rs. 3,025
lacs arisen on settlement of commodity transactions in the earlier
year, settled otherwise than through actual delivery, which was in the
nature of speculative income. However based on a legal opinion
obtained, the same had been treated as income from normal business by
the Company. Consequently, we are unable to comment on the income tax
impact of these transactions in the financial statements.
In respect of above matter, audit report for the year ended 31st March,
2011 was similarly modified.
5. Further to our comments in the 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 purposes 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 & Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
iv. Except for the matter stated in para 4 above, 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 Companies Act, 1956;
v. On the basis of the written representations received from the
Directors, as on 31st March, 2012, and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st March, 2012 from being appointed as a Director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956;
vi. Except for the possible effects of our observation in para 4
above, in our opinion and to the best of our information and according
to the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India :
a) in the case of Balance Sheet, of the state of affairs of the Company
as at 31st March, 2012;
b) in the case of Statement of Profit & Loss, of the profit for the
year ended on that date; and
c) in the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification in a phased manner to cover all the items over a period of
three years which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. As informed, no
material discrepancies were noticed on such verification.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) 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 and as
informed, no material discrepancies were noticed on physical
verification.
(iii) (a) The Company has granted loans to two companies covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs. 957.14 lacs and the
year-end balance of loans granted to such parties was Rs. 259.51 lacs.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans are not prima facie prejudicial to the interest of the
Company.
(c) The above loans are stated to be repayable on demand. As informed,
the repayment of above loans, to the extent demanded from the
borrowers, during the year had been received by the Company and thus,
there has been no default on the part of the borrower. The payment of
interest with respect to such loans is stated to have been regular.
(d) In view of the above loans being repayable by the parties on
demand, there is no overdue amount of loans granted to such parties.
(e) The Company had taken loan from a company covered in the register
maintained under section 301 of the Companies Act, 1956. The maximum
amount involved during the year was Rs. 25.30 lacs and the year-end
balance of loans taken from such company was Rs. 25.30 lacs.
(f) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loan is not prima facie prejudicial to the interest of the
Company.
(g) As informed, the loan taken and interest thereon is payable after
one year, and thus, there has been no default on the part of the
company in repayment of loan and interest.
(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 not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the company in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in Section 301 of the Companies Act, 1956 that
need to be entered in the register maintained under that section, have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding the value of Rupees five lacs during the year
have been entered into at prices which are reasonable having regard to
the prevailing market prices at the relevant time.
(vi) The Company has not accepted any deposits from the public within
the purview of Section 58A and 58AA of the Companies Act, 1956 and the
rules framed thereunder.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records in respect of the company's products under
section 209(1) (d) of the Companies Act, 1956, and are of the opinion
that prima facie, the prescribed accounts and records have been
maintained.
(ix) (a) The Company has been generally regular in depositing
undisputed statutory dues including provident fund, investor education
and protection fund, income-tax, sales-tax, service tax, customs duty,
excise duty, cess and other statutory dues with the appropriate
authorities though there has been slight delay in some cases. During
the year, there was no dues payable by the Company in respect of wealth
tax.
(b) According to the information and explanations given to us, the
Company did not have any undisputed dues in respect of provident fund,
investor education and protection fund, employees' state insurance,
income-tax, wealth-tax, service tax, sales-tax, customs duty, excise
duty, cess and other statutory dues which were outstanding, at the
yearend for a period of more than six months from the date they became
payable except as follows:
Name of the statute Nature of the dues Amount
(Rs. in lacs)
Entry Tax Act Entry tax on 319.10
(Chhattisgarh), 1976 purchase of materials
Name of the
Statute Period to which the Due Date Date of Payment
amount relates
Entry Tax Act April'09-August'11 At the end Not Yet Paid
(Chhattisgarh), of respective
1976 subsequent
month
(c) According to the records of the Company, dues outstanding in
respect of income tax, sales tax, wealth-tax, service tax, custom duty,
excise duty, cess etc. which has not been deposited on account of any
dispute are as follows :
Name of
Statute Nature of
Dues Amount Period to which Forum where
dispute is
(Rs.in
lacs) amount relates pending
Central
Sales
Tax Act,
1956 Non
Collection
of 'C'
Forms 105.57 2004-08 Appellate, Deputy
Commissioner,
Commercial Tax
West
Bengal
Value
Added Dis
allowance
of VAT
credit 10.39 2007-08 Joint Commissioner
of
Tax
Act, 2003 Sales tax, Kolkata
Central
Excise
Act, 1944 Disputed
dis
allowances
of 776.32 2003-11 CESTAT, New Delhi
CENVAT
credit
Central
Excise
Act, 1944 Disputed
dis
allowances
of 1,872.86 2006-08 Additional
CENVAT
credit 2010-12 Commissioner
central excise &
customs
Central
Excise
Act, 1944 Removal
of
Finished
Goods 87.22 2005-09 CESTAT, New Delhi
without
payment
of duty
Central
Excise
Act, 1944 Removal
of
Finished
Goods 38.79 2006-08 Additional
without
payment
of duty Commissioner
central excise &
customs
Central
Excise
Act, 1944 Sale of
iron ore
& coal
fines 31.89 2009-10 CESTAT, New Delhi
without
payment
of duty
Central
Excise
Act, 1944 Sale of
iron ore
& coal
fines 15.88 2004-07 Commissioner
Appeals
without
payment
of duty central excise &
customs
Central
Excise
Act, 1944 Sale of
iron ore
& coal
fines 278.71 2004-11 Additional
without
payment
of duty Commissioner
central excise &
customs
Central
Excise
Act, 1944 Sale of
Electricity
without 131.90 2005-09 CESTAT, New Delhi
payment
of duty
Central
Excise
Act, 1944 Sale of
Electricity
without 79.84 2010-11 Additional
payment of
duty Commissioner
central excise &
customs
Service
Tax under
Finance Disputed
dis
allowances
of 5.28 2005-06 Additional
Act, 1994 input
service
tax credit Commissioner,
Service Tax
Income
tax Act,
1961 Tax on
disputed 121.90 2004-11 Assistant
Commissioner
dis
allowances Income Tax
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred any cash losses in the current and
immediately preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to financial
institutions or banks. The Company did not have any outstanding
debentures during the year.
(xii) According to the information and explanations given to us and
based on the documents and records produced 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.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society and therefore, the provisions of clause
4(xiii) of the Order are not applicable.
(xiv) In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable.
(xv) According to the information and explanations given to us, the
Company has given guarantee of Rs. 8160.75 lacs for loan taken by a
subsidiary from a bank and onward guarantee given by a joint venture
company to Ministry of Coal, the terms and conditions whereof, in our
opinion, based on the management representation, are not prima-facie
prejudicial to the interest of the Company.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which these
were obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we report
that short term funds amounting to Rs. 11,276.41 lacs consisting of
project creditors Rs. 5,061.98, unsecured loans Rs. 3,945.42 and other
short term borrowings Rs. 2,269.01 have been used towards acquisition of
fixed assets and long term investment.
(xviii) The Company has not made any preferential allotment of shares
during the year to parties or companies covered in the register
maintained under section 301 of the Companies Act, 1956.
(xix) The company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money through a public issue during
the year.
(xxi) 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 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 .R. BATLIBOI & CO.
Firm Registration number: 301003E
Chartered Accountants
per Sanjoy K Gupta
Place: Kolkata Partner
Date: 29th May, 2012 Membership No.:54968
Mar 31, 2011
1. We have audited the attached Balance Sheet of MSP Steel & Power
Limited (Ãthe Company') 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 Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Attention is drawn on note 23 on schedule 22 regarding accounting
of gain of Rs. 3,025 lakhs arisen on settlement of commodity
transactions, settled otherwise than through actual delivery, which is
in the nature of speculative income. However based on a legal opinion
obtained, the same has been treated as income from normal business by
the Company. Consequently, we are unable to comment on the impact of
these transactions on the tax expense and Company's net worth.
5. Further to our comments in the 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 purposes 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 and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
iv. Subject to the matter stated in para 4 above, in our opinion, the
Balance Sheet, Profit and Loss Account 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 Companies Act, 1956;
v. On the basis of the written representations received from the
directors, as on 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 in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956;
vi. Subject to the matter stated in para 4 above the effect of which is
currently not ascertainable, in our opinion and to the best of our
information and according to the explanations given to us, the said
accounts give the information required by the Companies Act, 1956, in
the manner so required and give a true and fair view in conformity with
the accounting principles generally accepted in India :
a) in the case of Balance Sheet, of the state of affairs of the Company
as at 31st March, 2011;
b) in the case of Profit and Loss Account, of the profit for the year
ended on that date; and
c) in the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
Annexure to the Auditors' Report
(Referred to in Our report of even date to the members of MSP Steel &
Power Limited as at and for the year ended 31st March, 2011)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification in a phased manner to cover all the items over a period of
three years which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. As informed, no
material discrepancies were noticed on such verification.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) 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 and as
informed, no material discrepancies were noticed on physical
verification.
(iii) (a) The Company has granted loans to three companies covered in
the register maintained under section 301 of the Companies Act, 1956.
The maximum amount involved during the year was Rs.8,151.30 lakhs and
the year-end balance of loans granted to such parties was Rs. 231.79
lakhs.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans are not prima facie prejudicial to the interest of the
Company.
(c) The above loans are stated to be repayable on demand. As informed,
the repayment of above loans, to the extent demanded from the
borrowers, during the year had been received by the Company and thus,
there has been no default on the part of the borrower. The payment of
interest with respect to such loans is stated to have been regular.
(d) In view of the above loans being repayable by the parties on
demand, there is no overdue amount of loans granted to such parties.
(e) According to information and explanations given to us, 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. Accordingly, the provisions of clause
4(iii)(e) to (g) of the Order are not applicable to the Company and
hence not commented upon.
(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, no major weakness has been
noticed in the internal control system in respect of these areas.
During the course of our audit, we have not observed any continuing
failure to correct major weakness in internal control system of the
company.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in Section 301 of the Companies Act, 1956 that
need to be entered in the register maintained under that section, have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding the value of Rupees five lakhs during the year
have been entered into at prices which are reasonable having regard to
the prevailing market prices at the relevant time.
(vi) The Company has not accepted any deposits from the public within
the purview of Section 58A and 58AA of the Companies Act, 1956 and the
rules framed thereunder.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records in respect of the company's products under
section 209(1)(d) of the Companies Act, 1956, and are of the opinion
that prima facie, the prescribed accounts and records have been
maintained.
(ix) (a) The Company has been generally regular in depositing
undisputed statutory dues including provident fund, investor education
and protection fund, income-tax, sales- tax, service tax, customs duty,
excise duty, cess and other statutory dues with the appropriate
authorities though there has been slight delay in some cases. The
provisions relating to employees state insurance are not applicable to
the Company. During the year, there was no dues payable by the Company
in respect of wealth tax.
Further, since the Central Government has till date not prescribed the
amount of cess payable under section 441 A of the Companies Act, 1956,
we are not in a position to comment upon the regularity or otherwise of
the company in depositing the same.
(b) According to the information and explanations given to us, the
Company did not have any undisputed dues in respect of provident fund,
investor education and protection fund, employees' state insurance,
income-tax, wealth-tax, service tax, sales-tax, customs duty, excise
duty, cess and other statutory dues which were outstanding, at the year
end for a period of more than six months from the date they became
payable except as follows:-
Name of the statute Nature of the dues Amount
(Rs. in lacs)
Entry Tax Act Entry tax on 277.52
(Chhattisgarh), 1976 purchase of
materials
Name of the statute Period to which Due Date Date of
the amount relates payment
Entry Tax Act April'09-September'10 At the end Not yet
(Chhattisgarh), 1976 of Paid
respective
subsequent
month
(c) According to the records of the Company, dues outstanding in
respect of income tax, sales tax, wealth-tax, service tax, custom duty,
excise duty, cess etc. which has not been deposited on account of any
dispute are as follows :
Name of the statue Nature of the dues Amount
(Rs. in lacs)
Central Sales Tax Non Collection of 61.28
Act, 1956 "C" Form
West Bengal value Disallowance of VAT 10.39
Added Tax Act, 2003 credit
Central Excise Disputed Duty on 147.44
Act, 1944 Finished Goods
Central Excise Disputed disallowances 22.08
Act, 1944 of CENVAT credit and
service tax
Central Excise Disputed disallowances 723.14
Act, 1944 of CENVAT credit and
service tax
Central Excise
Act, 1944 Removal of Finished
Goods 56.19
without payment of
duty
Central Excise
Act, 1944 Sale of Electricity
without 131.90
payment of duty
Central Excise
Act, 1944 Sale of iron ore &
coal fines 310.60
without payment
of duty
Income tax
Act, 1961 Tax on disputed
disallowances 3.23
Name of the statute Period to which Forum where
the amount relates dispute is pending
Central Sales Tax 2004-05, 2005-06 Appellate Deputy
Act, 1956 Commissioner,
2006-07 Commercial Tax
West Bengal value 2007-08 Joint Commissioner
Added Tax Act, 2003 of Sales Tax, Kolkata
Central Excise 2009-11 Commissioner,
Act, 1944 Central Excise & Customs
Central Excise 2006-07 CESTAT, New Delhi
Act, 1944
Central Excise 2008-11 Commissioner Central
Act, 1944 Excise & Customs
Central Excise
Act, 1944 2006-07 CESTAT, New Delhi
Central Excise
Act, 1944 2010-11 Commissioner Central
Excise & Customs
Central Excise
Act, 1944 2004-11 Commissioner Central
Excise & Customs
Income tax Act, 1961 2005-06 Income Tax Appellate
Tribunal
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceeding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to financial
institutions or banks. The Company did not have any outstanding
debentures during the year.
(xii) According to the information and explanations given to us and
based on the documents and records produced 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.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society and therefore, the provisions of clause
4(xiii) of the Order are not applicable.
(xiv) In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable.
(xv) According to the information and explanations given to us, the
Company has given guarantee of Rs.660.75.lakhs for loans taken / to be
taken by another Company from banks or financial institutions, the
terms and conditions whereof, in our opinion, based on the management
representation and considering the joint venture relation with such
party, are not prima-facie prejudicial to the interest of the Company.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which these
were obtained
(xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we report
that short term funds amounting to Rs 2,757.95 lakhs in the form of
project creditors have been used for long term investment towards
acquisition of fixed assets
(xviii) The Company has not made any preferential allotment of shares
during the year to parties or companies covered in the register
maintained under section 301 of the Companies Act, 1956.
(xix) The company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money through a public issue during
the year.
(xxi) 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 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 S.R. Batliboi & Co.
Firm Registration Number : 301003E
Chartered Accountants
per Sanjoy K Gupta
Partner
Membership No. 54968
Place : Kolkata
Date : 30th May, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of MSP Steel & Power
Limited (the Company) as at 31st March, 2010 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.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. As more fully discussed in note 15 to Schedule 22 to the financial
statements, the Company is in the process of updating its fixed assets
records and reconciling the book balances with the assets physically
found. Pending the completion of above process, we are unable to
comment on the adjustments to the carrying value of fixed assets
arising out of the discrepancies, if any.
5. Further to our comments in the 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 purposes 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 and 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 account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (30 of section 211 of the
Companies Act, 1956.
v. On the basis of the written representations received from the
directors, as on 31st March, 2010, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March, 2010 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
vi. Subject to the matter contained in para 4 above the effect of which
is currently not ascertainable, in our opinion and to the best of our
information and according to the explanations given to us, the said
accounts give the information required by the Companies Act, 1956, in
the manner so required and give a true and fair view in conformity with
the accounting principles generally accepted in India;
a) in the case of balance sheet, of the state of affairs of the Company
as at 31st March, 2010;
b) in the case of profit and loss account, of the profit for the year
ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure to the Auditors Report
(Referred to in Our report of even date to the members of MSP Steel &
Power Limited as at and for the year ended 31st March, 2010)
(i) (a) The Company is in the process of updating the records showing
full particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification in a phased manner to cover all tjie items over a period
of three years which, in our opinion, is reasonable having regard to
the size of the Company and the nature of its assets. However, pending
updating of the records as noted above, discrepancies if any, between
the physical and book balances of fixed assets is not presently
ascertainable.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) 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 except for
records in relation to movement of stocks of spill-over iron ore fines
and also in relation to records for bifurcation between imported and
indigenous coal. As at 31st March, 2010. inventories of these items
have been determined based on the physical verification conducted by
the management. As informed, no material discrepancies were noticed on
physical verification.
(iii) (a) As informed, 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 clauses 4(iii)(b) to (d) of the Order are
not applicable.
(b) As informed, 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 clauses 4(iii)(f) and (g) of the Order are
not applicable.
(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 for the sale of goods and services. However,
the overall internal
control system in relation to purchase of fixed assets needs to be
strengthened to make it commensurate with the size of the Company and
nature of its business. In our opinion, there is no continuing failure
to correct major weakness in the internal control system.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Act that need to be
entered in the register maintained under section 301, have been so
entered. (b) In our opinion and according to the information and
explanations given to us, the transactions made in pursuance of such
contracts or arrangements exceeding the value of Rupees five lacs have
been entered into during the financial year at prices which are
reasonable having regard to the prevailing market prices at the
relevant time.
(vi) As informed, the Company has not accepted any deposits from the
public.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records in respect of the companys products under
section 209(l)(d) of the Companies Act, 1956, and are of the opinion
that prima facie, the prescribed accounts and records have been
maintained.
(ix) (a) The Company has been generally regular in depositing
undisputed statutory dues including provident fund, investor education
and protection fund, income-tax, sales-tax, wealth-tax, service tax,
customs duty, excise duty, cess and other statutory dues with the
appropriate authorities though there has been slight delay in some
cases. The provisions relating to employees state insurance are not
applicable to the Company.
Further, since the Central Government has till date not prescribed the
amount of cess payable under section 441 A of the Companies Act,1956,
we are not in a position to comment upon the regularity or otherwise of
the company in depositing the same.
(b) According to the information and explanations given to us,
undisputed dues in respect of provident fund, investor education and
protection fund, employees state insurance, income-tax, wealth-tax,
service tax, sales-tax, customs duty, excise duty, cess and other
statutory dues which were outstanding, at the year end for a period
of more than six months from the date they became payable are as
follows :
Name of the statute Nature of the dues Amount
(Rs. in lacs)
Entry Tax Act Entry tax on 102.76
(Chhattisgarh), 1976 purchase of materials
Name of the statute Period to which Due Date Date of
Entry Tax Act
(Chhattisgarh), 1976 the amount relates Payment
April09-AugustO9 At the end
of respective Not Yet
subsequent
month Paid
(c) According to the records of the Company, the dues outstanding in
respect of income tax, sales tax, wealth-tax, service tax, custom duty,
excise duty, cess etc. on account of any dispute are as follows:
Name of the
statute Nature of the dues Amount
(Rs. in lacs)
Central Sales Tax Non Collection of 20.02
Act, 1956 "C" Form
Central Excise Disputed Duty on
Act, 1944 Finished Goods 58.76
Central Excise Removal of finished goods 78.61
Act, 1944 without payment of duty
Central Excise Sale of Iron Ore & Coal fines 255.59
Act, 1944 without payment of duty
Income Tax Tax on disputed disallowances 13.20
- Act, 1961
Name of the statute Period to which Forum where
the amount relates dispute is pending
Central Sales Tax 2004-05 and Appellate Dy. Commissioner,
Act,1956 2005-06 Commercial Tax
Central Excise
Act, 1944 2005-07 CESAT, New Delhi
Central Excise 2008-09 Commissioner,
Act, 1944 Central Excise & Customs
Central Excise 2004-09 Commissioner,
Act, 1944 Central Excise & Customs
Income Tax 2005-06 Commissioner of Income Tax
Act,1961 (Appeal)
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to financial
institutions or banks. There are no dues to debenture holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society and therefore, the provisions of clause
4(xiii) of the Order are not applicable.
(xiv) In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable.
(xv) According to the information and explanations given to us, the
Company has not given any guarantees for loans taken by others from
banks or financial institutions.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which these
were obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no fund raised on short-term basis have been used for long term
investment.
(xviii)The Company has not made any preferential allotment of shares
during the year to parties or companies covered in the register
maintained under section 301 of the Companies Act, 1956.
(xix) The company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money through a public issue during
the year.
(xxi) 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 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 S.R. Batliboi & Co.
Firm Registration Number: 301003E
Chartered Accountants
per R. K. Agrawal
Place: Kolkata Partner
Date : 29th May, 2010 Membership No. 16667
Mar 31, 2009
We have audited the attached Balance Sheet of MSP Steel & Power Limited
("the Company") as at 31st March, 2009 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 the 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 test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
As required by the Companies (Auditors Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of Section
227(4A) of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 & 5 of the said
Order. Further to our comments in the Annexure referred to above, we
report that :- 1. 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 except for certain documents
seized by the excise department as referred to in para 6 below.
2. 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.
3. The Balance sheet, Profit and Loss account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
4. In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of sec 211 of the Companies
Act, 1956.
5. On the basis of written representations received from the
directors, as on 31st March, 2009, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March, 2009 from being appointed as director in terms of clause
(g) of sub-section (1) of 274 of the Companies Act, 1956.
6. Attention is drawn to Note No 5 on Schedule 22 relating to search
and seizure conducted by Excise department at the Companys Plant at
Raigarh on 17th February, 2009 where in certain supporting documents
relating to consumption of raw materials and production have been
seized by the said department. Based on the documents and information
available with the Company, the figures of raw-materials consumption
and production have been arrived at for the period from 1st Aprilà 08
to 17th February 09, which has been relied upon by us.
7. Subject to the matter referred in para 6 above, whose impact, if
any, on the profit for the year is not ascertainable, in our opinion
and to the best of our information and according to the explanations
given to us, the said accounts, give the information required by the
Companies Act 1956, in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India :- a. In the case of the Balance Sheet, of the state of affairs
of the Company as at 31st March 2009
b. In the case of the Profit and Loss Account, 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.
ANNEXURE TO THE AUDITORS REPORT (REFERRED TO IN OUR REPORT OF EVEN
DATE TO THE MEMBERS OF MSP STEEL & POWER LIMITED AS AT AND FOR THE YEAR
ENDED 31ST MARCH, 2009)
(i) (a) The Company is in the process of updating the fixed assets
records showing full particulars, including quantitative details and
situation of fixed assets.
(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification in a phased manner to cover all the items over a period of
three years which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. However, pending
updating of records as noted above, discrepancies if any, between the
physical and book balances of fixed assets is not presently
ascertainable.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) 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
informed, no material discrepancies were noticed on such physical
verification.
(iii) (a) As informed, 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 provision of clause 4(iii)(b) to clause 4(iii)(d) of the
Order are not applicable.
(e) The Company had taken loan from two companies covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs.154.26 lacs and the
year-end balance of loans taken from such parties was Rs. 150 lacs.
(f) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans are not prima facie prejudicial to the interest of the
Company.
(g) In respect of loans taken, repayment of the principal amount is as
stipulated and payments of interest have been regular.
(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.
During the course of our audit, no major weakness has been noticed in
the internal control system in respect of these areas. As informed, the
Company has not made any sale of services during the year.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Act that need to be
entered in the register maintained under section 301, have been so
entered. (b) In our opinion and according to the information and
explanations given to us, the transactions made in pursuance of such
contracts or arrangements exceeding value of Rupees five lakhs have
been entered into during the financial year at prices which are
reasonable having regard to the prevailing market prices at the
relevant time.
(vi) As informed, the Company has not accepted any deposit from the
public.
(vii) The Company has an internal audit system, which in our opinion,
is commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records in respect of the companys products under
section 209(1)(d) of the Companies Act, 1956, and are of the opinion
that prima facie, the prescribed accounts and records have been
maintained.
(ix) (a) The Company has been generally regular in depositing
undisputed statutory dues including provident fund, investor education
and protection fund, income-tax, sales-tax, wealth- tax, service tax,
custom duty, excise duty, cess and other statutory dues with the
appropriate authorities though there have been slight delay in few
cases. The provisions relating to employees state insurance are not
applicable to the Company.
(b) According to the information and explanations given to us, no
undisputed dues in respect of provident fund, investor education and
protection fund, income-tax, wealth-tax, service tax, sales- tax,
customs duty, excise duty, cess and other statutory dues were
outstanding, at the year end for a period of more than six months from
the date they became payable.
(c) According to the records of the Company, the dues outstanding in
respect of income tax, sales tax, wealth-tax, service tax, custom duty,
excise duty, cess etc. on account of any dispute are as follows :-
Name of Statute Nature of Dues Amount (Rs. Period to which the
In lacs) amount relates
Central SalesTax Non collection
of ÃCÃ 141.69 2004-06
Act 1956 form
Central Excise
Act. Disputed duty on 75.72 2005-07
1944 finished goods
Income Tax Act, Tax on disputed 13.20 2005-06
1961 Disallowances
Name of Statue Forum where
dispute is pending
Central Sales Tax
Act 1956 Appellate Dy.
Commissioner,
Commercial Tax
Central Excise Act.
1944 CESAT
Income Tax Act,
1961 Commissioner of
Income Tax(Appeal)
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per 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 or bank. There were no outstanding debentures during the
year.
(xii) According to the information and explanations given to us and
based on the documents and records produced, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/
mutual benefit fund/ society and therefore, the provisions
ofclause4(xiii) of the Order are not applicable.
(xiv) In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable.
(xv) According to the information and explanations given to us, the
Company has not given any guarantees for loans taken by others from
banks or financial institutions.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which these
were obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no fund raised on short-term basis have been used for long term
investment.
(xviii) The Company has not made any preferential allotment of shares
during the year to parties or companies covered in the register
maintained under section 301 of the Companies Act, 1956.
(xix) The company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money through a public issue during
the year.
(xxi) 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 by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
22, Camac Street For S. R. BATLIBOI & CO.
Block C, 3rd Floor CHARTERED ACCOUNTANTS
Kolkata - 700 016.
per R.K.AGRAWAL
Dated: 29th June, 2009. Partner
Membership No. 16667