Mar 31, 2018
INDEPENDENT AUDITORâS REPORT
To
The Members of PANCHMAHAL STEEL LIMITED
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying Standalone Ind AS financial statements of PANCHMAHAL STEEL LIMITED ("the Company") which comprise the Balance Sheet as at 31st March 2018, the Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Ind AS Financial Statements
The company''s Board of Directors is responsible for the matters specified in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the 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 Accounting Standards (Ind AS) specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015 as amended. 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 the 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone financial statements.
We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31st March, 2018, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Other Matter
The audited standalone financial statements for the year ended 31st March, 2017, was carried out and reported by J.R.S. Patel & Co., vide their unmodified audit report dated 17th May, 2017, whose report has been furnished to us by the management and which has been relied upon by us for the purpose of our audit of the standalone financial statements. Our audit report is not qualified in respect of this matter.
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 dated 29.03.2016, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we further report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
c. the Balance Sheet, Statement of Profit and Loss including the Statement of 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 standalone Ind AS financial statements comply with the applicable Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standard) Rules, 2015 as amended;
e. On the basis of written representations received from the directors as on 31st March, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 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. In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 201 4, as amended :
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 1 (B) E to the standalone Ind AS financial statements;
ii. As informed to us, the Company did not have any long-term contracts including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise;
iii. There has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Company.
1. In respect of its Fixed Assets :
(a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets, on the basis of available information.
(b) The Company carries out physical verification of fixed assets under a phased program of verification at reasonable intervals, which in our opinion is reasonable. According to the information and explanations given to us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us, the title deeds of immovable properties are held in the name of the Company.
2. (a) As explained to us, the inventories have been physically verified by the management during the year
at reasonable intervals other than material in transit and lying with branches and consignment agent/ stockiest, which have been substantially confirmed by them. In our opinion, having regard to the nature and location of stocks, the frequency of verification is reasonable.
(b) According to the information and explanations given to us, no material discrepancies were noticed on physical verification of inventory as compared to the book records.
3. As informed, the Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties listed in register maintained under Section 189 of the Companies Act, 2013. Accordingly, sub-clauses (a), (b) and (c) of (iii) of the said Order are not applicable.
4. In our opinion and according to explanations given to us, the Company has not entered into any transactions with respect to loans and investments as prescribed under Sections 185 and 186 of the Companies Act, 2013.
5. In our opinion and according to the information and explanations given to us the Company has not accepted any deposits from the public during the year and hence the question of complying with the provisions of Section 73 to 76 of the Companies Act, 2013 and the rules framed there under and the directives issued by the Reserve Bank of India, wherever applicable, does not arise.
6. On the basis of the records produced, we are of the opinion that prima facie, the cost records and accounts prescribed by the Central Government of India under Section 148(1) of the Companies Act, 2013, have been made and maintained by the Company. However, we are not required to carry out and have not carried out any detailed examination of such records and accounts.
7. According to the information and explanations given to us in respect of statutory and other dues, the Company is generally regular in depositing undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other Statutory dues with the appropriate authorities during the year. Based on our audit procedures and according to the information and explanations given to us, there are no arrears of statutory dues which has remained outstanding as at 31st March, 2018 for a period of more than six months from the date they became payable.
8. According to the information and explanations given to us and on the basis of records produced before us by the Company, the details of disputed Income Tax/Custom Duty/Excise Duty/Service Tax which have not been deposited as on 31st March, 2018 are given below:
Name of Statute |
Nature of Dues |
Amount Rs. in Lacs |
Forum where dispute is pending |
The Central Excise Act, 1944 |
Excise Duty |
57.41 |
Gujarat High Court |
The Central Excise Act, 1944 |
Excise Duty |
5.05 |
Assistant Commissioner, Halol |
The Central Excise Act, 1944 |
Excise Duty |
21.00 |
Assistant Commissioner, Halol |
The Central Excise Act, 1944 |
Excise Duty |
8.05 |
Commissioner (Appeals), Vadodara |
The Central Excise Act, 1944 |
Excise Duty |
0.04 |
Assistant Commissioner, Halol |
The Central Excise Act, 1944 |
Excise Duty |
10.03 |
CESTAT, Ahmedabad. |
The Central Excise Act, 1944 |
Excise |
6.34 |
CESTAT, Ahmedabad. |
The Central Excise Act, 1944 |
Excise Duty |
6.33 |
CESTAT, Ahmedabad. |
The Central Excise Act, 1944 |
Excise Duty |
67.45 |
CESTAT, Ahmedabad. |
The Central Excise Act, 1944 |
Excise Duty |
2.50 |
CESTAT, Ahmedabad. |
The Central Excise Act, 1944 |
Excise Duty |
841.36 |
CESTAT, Ahmedabad. |
The Central Excise Act, 1944 |
Excise Duty |
15.02 |
Commissioner (Appeals), Vadodara |
Finance Act, 1994 |
Service Tax |
2.15 |
CESTAT, Ahmedabad. |
The Custom Act, 1962 |
Custom Duty |
1.20 |
CESTAT, Mumbai |
The Custom Act, 1962 |
Custom Duty |
40.73 |
CESTAT, Mumbai |
The Income Tax Act, 1961 |
Income Tax |
579.10 |
Commissioner (Appeals), Vadodara |
9. The Company has not defaulted in repayment of loans or borrowing to banks, financial institution, government or dues to debenture holders.
10. The Company has not raised money by way of initial public offer or further public offer (including debt instruments) and term loans during the year.
11. During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instances of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.
12. According to information and explanations given to us, the Company has paid or provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of the Section 197 read with schedule V of the Companies Act, 2013.
13. The Company is not a Nidhi Company. Accordingly, clause (xii) of (iii) of the Order is not applicable.
14. According to information and explanations given to us, all transactions with the related parties are in compliance with Section 177 and 188 of the Companies Act, 2013 and details have been disclosed in the standalone Ind AS Financial Statements as required by applicable Accounting Standard.
15. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.
16. According to information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected therewith.
17. As explained to us, looking to the nature of business carried out by the Company, it is not required to get registered under Section 45-IA of the Reserve Bank of India Act, 1934.
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of PANCHMAHAL STEEL LIMITED ("the Company") as of March 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI'').
These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditor''s Responsibility
Our responsibility is to express an opinion on the 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") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. 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 is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 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 Atul Parikh & Co.
Chartered Accountants
Firm Registration No. 106496W
Place : Vadodara (Foram Doshi)
Date : 30th May, 2018 Partner
Membership No. 152328
Mar 31, 2016
INDEPENDENT AUDITOR''S REPORT
To
The Members of PANCHMAHAL STEEL LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of PANCHMAHAL STEEL LIMITED ("the Companyâ) 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.
Management''s Responsibility for the Financial Statements
The company''s Board of Directors is responsible for the matters specified in Section 1 34(5) of the Companies Act, 201 3 ("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.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(1 0) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial 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.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31 st March, 201 6, and its loss and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 201 6 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act dated 29.03.201 6, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we further report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.
d. In our opinion, the financial statements comply with the applicable Accounting Standards specified under Section 1 33 of the Act, read with the Rule 7 of the Companies (Accounts) Rules 2014;
e. on the basis of written representations received from the directors as on 31 st March, 201 6, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 st March, 201 6 from being appointed as a director in terms of Section 1 64(2) of the Act;
f. With respect to the adequacy of the internal financial controls over financial reporting and the operating effectiveness of such controls, refer to our separate report in "Annexure B"; and
g. In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 :
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 1 (8) to the financial statements;
ii. As informed to us, the Company did not have any long-term contracts including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise;
iii. There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund. The question of delay in transferring such sums does not arise.
ANNEXURE "A" REFERRED TO PARAGRAPH 1 UNDER "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE ON THE ACCOUNTS FOR THE YEAR ENDED ON 31 ST MARCH 2016 OF PANCHMAHAL STEEL LIMITED, KALOL.
1. In respect of its Fixed Assets :
(a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets, on the basis of available information.
(b) The Company carries out physical verification of fixed assets under a phased program of verification at reasonable intervals, which in our opinion is reasonable. According to the information and explanations given to us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us, the title deeds of immovable properties are held in the name of the Company.
2. (a) As explained to us, the inventories have been physically verified by the management during the year at reasonable intervals other than material in transit and lying with branches and consignment agent/stockiest, which have been substantially confirmed by them. In our opinion, having regard to the nature and location of stocks, the frequency of verification is reasonable.
(b) According to the information and explanations given to us, no material discrepancies were noticed on physical verification of inventory as compared to the book records.
3. As informed, the Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties listed in register maintained under Section 189 of the Companies Act, 2013. Accordingly, sub-clauses (a), (b) and (c) of (iii) of the said Order are not applicable.
4. In our opinion and according to explanations given to us, the Company has not entered into any transactions with respect to loans and investments as prescribed under Sections 185 and 186 of the Companies Act, 2013.
5. In our opinion and according to the information and explanations given to us the Company has not accepted any deposits from the public during the year and hence the question of complying with the provisions of Section 73 to 76 of the Companies Act, 2013 and the rules framed there under and the directives issued by the Reserve Bank of India, wherever applicable, does not arise.
6. On the basis of the records produced, we are of the opinion that prima facie, the cost records and accounts prescribed by the Central Government of India under Section 148(1) of the Companies Act, 2013, have been made and maintained by the Company. However, we are not required to carry out and have not carried out any detailed examination of such records and accounts.
7. According to the information and explanations given to us in respect of statutory and other dues, the Company is generally regular in depositing undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other Statutory dues with the appropriate authorities during the year. Based on our audit procedures and according to the information and explanations given to us, there are no arrears of statutory dues which has remained outstanding as at 31st March, 2016 for a period of more than six months from the date they became payable.
8. According to the information and explanations given to us and on the basis of records produced before us by the Company, the details of disputed Income Tax/Custom Duty/Excise Duty/Service Tax which have not been deposited as on 31st March, 2016 are given below:
Name of Statute |
Nature of Dues |
Amount in Rs. |
Forum where dispute is pending |
The Central Excise Act, 1944 |
Excise Duty |
57,41,982 |
Gujarat High Court |
The Central Excise Act, 1944 |
Excise Duty |
5,05,018 |
Assistant Commissioner , Halol |
The Central Excise Act, 1944 |
Excise Duty |
21,00,056 |
Assistant Commissioner , Halol |
The Central Excise Act, 1944 |
Excise Duty |
8,05,432 |
Commissioner (Appeals), Vadodara |
The Central Excise Act, 1944 |
Excise Duty |
3,18,335 |
CESTAT, Ahmadabad. |
The Central Excise Act, 1944 |
Excise Duty |
10,03,244 |
CESTAT, Ahmadabad. |
The Central Excise Act, 1944 |
Excise Duty |
6,34,433 |
CESTAT, Ahmadabad. |
The Central Excise Act, 1944 |
Excise Duty |
6,33,973 |
CESTAT, Ahmadabad. |
The Central Excise Act, 1944 |
Excise Duty |
67,45,205 |
CESTAT, Ahmadabad. |
The Central Excise Act, 1944 |
Excise Duty |
2,50,357 |
CESTAT, Ahmadabad. |
The Central Excise Act, 1944 |
Excise Duty |
8,41,36,784 |
CESTAT, Ahmadabad. |
The Central Excise Act, 1944 |
Excise Duty |
28,645 |
Commissioner (Appeals), Vadodara |
Finance Act, 1994 (Service Tax Provision) |
Service Tax |
2,15,610 |
CESTAT, Ahmadabad. |
The Custom Act, 1962 |
Custom Duty |
1,20,000 |
CESTAT, Mumbai |
The Income Tax Act, 1962 |
Income Tax |
48,72,779 |
Commissioner of Income Tax (Appeals), Vadodara |
9. The Company has not defaulted in repayment of loans or borrowing to banks, financial institution, government or dues to debenture holders.
10. The Company has not raised money by way of initial public offer or further public offer (including debt instruments) and term loans during the year.
11. During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instances of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.
12. According to information and explanations given to us, the Company has paid or provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of the Section 197 read with Schedule V of the Companies Act, 2013.
13. The Company is not a Nidhi Company. Accordingly clause (xii) of (iii) of the Order is not applicable.
14. According to information and explanations given to us, all transactions with the related parties are in compliance with Section 177 and 188 of the Companies Act, 2013 and details have been disclosed in the Financial Statements as required by applicable Accounting Standard.
15. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.
16. According to information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected therewith.
17. As explained to us, looking to the nature of business carried out by the Company, it is not required to get registered under Section 45-IA of the Reserve Bank of India Act, 1934.
Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the Internal Financial Controls over financial reporting of Panchmahal Steel Limited ("the Company") as of 31 March 201 6 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
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(1 0) of the Companies Act, 201 3, 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 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 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 31 March 2016, 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 J.R.S. Patel & Co.
Chartered Accountants,
Firm Regn. No.107709W
Place : Vadodara (Nitin Patni)
Date : 27th May 2016 Partner
Membership No. 15612
Mar 31, 2015
We have audited the accompanying financial statements of PANCHMAHAL
STEEL LIMITED ("the Company") which comprise the Balance Sheet as at
31st March 2015, the Statement of Profit and Loss, the Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The company's Board of Directors is responsible for the matters
specified 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 and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
there under.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial 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.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India 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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act dated 10.04.2015, we give in
the Annexure a statement on the matters specified in paragraphs 3 and 4
of the Order.
2. As required by section 143(3) of the Act, we further report that:
a. We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purpose of our audit;
b. In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d. In our opinion, the financial statements comply with the applicable
Accounting Standards specified under Section 133 of the Act, read with
the Rule 7 of the Companies (Accounts) Rules2014;
e. On the basis of written representations received from the Directors
as on 31st March, 2015, and taken on record by the Board of Directors,
none of the Directors is disqualified as on 31st March, 2015 from being
appointed as a Director in terms of Section 164(2) of the Act;
f. In our opinion and to the best of our information and according to
the explanations given to us, we report as under with respect to other
matters to be included in the Auditor's Report in accordance with Rule
11 of the Companies (Audit and Auditors) Rules, 2014 :
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 1 (9) to
the financial statements;
ii. As informed to us, the Company did not have any long-term contracts
including derivative contracts; as such the question of commenting on
any material foreseeable losses thereon does not arise;
iii. There has not been an occasion in case of the Company during the
year under report to transfer any sums to the Investor Education and
Protection Fund. The question of delay in transferring such sums does
not arise.
ANNEXURE REFERRED TO PARAGRAPH 1 UNDER "REPORT ON OTHER LEGAL AND
REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE ON THE ACCOUNTS FOR
THE YEAR ENDED ON 31ST MARCH 2015 OF PANCHMAHAL STEEL LIMITED, KALOL.
1. In respect of its Fixed Assets :
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets, on the
basis of available information.
(b) The Company carries out physical verification of fixed assets under
a phased program of verification at reasonable intervals, which in our
opinion is reasonable. According to the information and explanations
given to us, no material discrepancies were noticed on such
verification.
2. (a) As explained to us, the inventories have been physically
verified by the management during the year at reasonable intervals
other than material in transit and lying with branches and consignment
agent/stockiest, which have been substantially confirmed by them. In
our opinion, having regard to the nature and location of stocks, the
frequency of verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) On the basis of our examination of records of inventory, in our
opinion, the Company has maintained proper records of its inventories.
According to the information and explanations given to us, no material
discrepancies were noticed on physical verification of inventory as
compared to the book records.
3. As informed, the Company has not granted any loans, secured or
unsecured to companies, firms or other parties listed in register
maintained under Section 189 of the Companies Act, 2013. Accordingly,
sub-clauses (a) and (b) of (iii) of the said Order are not applicable.
4. In our opinion and according to explanations given to us, there are
adequate internal control systems commensurate with the size of the
Company and the nature of its business with regard to purchase of
inventory and fixed assets and with regard to sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in such internal control
systems.
5. In our opinion and according to the information and explanations
given to us the Company has not accepted any deposits from the public
during the year and hence the question of complying with the provisions
of Section 73 to 76 of the Companies Act, 2013 and the rules framed
there under and the directives issued by the Reserve Bank of India,
wherever applicable, does not arise.
6. On the basis of the records produced, we are of the opinion that
prima facie, the cost records and accounts prescribed by the Central
Government of India under Section 148(1) of the Companies Act, 2013,
have been made and maintained by the Company. However, we are not
required to carry out and have not carried out any detailed examination
of such records and accounts.
7. According to the information and explanations given to us in
respect of statutory and other dues :
(a) The Company is generally regular in depositing undisputed statutory
dues, including Provident Fund, Employees' State Insurance, Income Tax,
Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and
other Statutory dues with the appropriate authorities during the year.
Based on our audit procedures and according to the information and
explanations given to us, there are no arrears of statutory dues which
has remained 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 and on
the basis of records produced before us by the Company, the details of
disputed Income tax/Custom duty/Excise duty/Service tax which have not
been deposited as on 31st March, 2015 are given below:
Amount Forum where
Name of Statute Nature of Dues (in Rupees) dispute is pending
The Central
Excise Act, 1944 Excise Duty 57,41,982 Gujarat High Court
The Central
Excise Act, 1944 Excise Duty 5,05,018 Assistant
Commissioner , Halol
The Central
Excise Act, 1944 Excise Duty 21,00,056 Assistant
Commissioner , Halol
The Central
Excise Act, 1944 Excise Duty 8,05,432 Commissioner
(Appeals), Vadodara
The Central
Excise Act, 1944 Excise Duty 3,35,090 CESTAT, Ahmedabad.
The Central
Excise Act, 1944 Excise Duty 10,03,244 CESTAT, Ahmedabad.
The Central
Excise Act, 1944 Excise Duty 6,46,500 Commissioner
(Appeals), Vadodara
The Central
Excise Act, 1944 Excise Duty 6,46,026 Commissioner
(Appeals), Vadodara
Finance Act, 1994
(Service Tax
Provision) Service Tax 2,15,610 CESTAT,
Ahmedabad.
The Custom
Act, 1962 Custom Duty 1,20,000 CESTAT, Mumbai
The Income Tax
Act, 1962 Income Tax 48,72,779 Commissioner of
Income Tax (Appeals)
Vadodara
(c) According to the information and explanations given to us and on
the basis the records produced before us by the Company, there are no
amounts required to be transferred to Investor Education and Protection
Fund in accordance with the relevant provisions of the Companies Act,
2013.
8. The Company has no accumulated losses as at the end of the
financial year and it has not incurred cash losses in the current and
immediately preceding financial year.
9. The Company has not defaulted in repayment of dues to banks,
debenture holders and financial institutions.
10. The Company has not given any guarantee for loans taken by others
from banks or financial institutions.
11. The Company has not taken any term loans during the year.
12. During the course of our examination of the books of account
carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations
given to us, we have neither come across any instances of fraud on or
by the Company, noticed or reported during the year, nor have we been
informed of such case by the management.
For J.R.S. Patel & Co.
Chartered Accountants
Firm Regn. No.107709W
Place : Vadodara (Nitin Patni)
Date : 26th May, 2015 Partner
Membership No. 15612
Mar 31, 2014
We have audited the accompanying financial statements of PANCHMAHAL
STEEL LIMITED which comprise the Balance Sheet as at 31st March, 2014,
the Statement of Profit and Loss and Cash Flow Statement for the year
then ended, and a summary of significant accounting policies and other
explanatory information.
Management''s Responsibility for the Financial Statements
The company''s Management is responsible for the preparation of these
financial statements that gives 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 General Circular 15/2013 dated 13th September, 2013 of the Ministry
of Corporate Affairs in respect of Section 133 of the Companies Act,
2013. This responsibility includes the design, implementation and
maintenance of internal control relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers the internal control relevant to the Company''s preparation
and fair presentation of the financial statements in order to design
audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the
Company''s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by the Management, as well as evaluating
the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 st March 2014;
(b) in the case of the Statement of Profit and Loss, of the loss of the
company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the
company for the year ended on that date. Report on Other Legal and
Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
a. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
b. In our opinion proper books of account as required by law have been
kept by the Company so far as it appears from our examination of those
books.
c. The Balance Sheet, Statement of Profit and Loss and the Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d. In our opinion, the Balance Sheet, Statement of Profit and Loss and
the Cash Flow Statement comply with the Accounting Standards notified
under the Act read with the General Circular 15/2013 dated 13th
September, 2013 of the Ministry of Corporate Affairs in respect of
Section 133 of the Companies Act, 2013.
e. On the basis of written representations received from the directors
as on 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 Act.
ANNEXURE REFERRED TO PARAGRAPH 1 UNDER "REPORT ON OTHER LEGAL AND
REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE ON THE ACCOUNTS FOR
THE YEAR ENDED ON 31 ST MARCH, 2014 OF PANCHMAHAL STEEL LIMITED, KALOL.
1. In respect of its Fixed Assets :
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets, on the
basis of available information.
(b) The Company carries out physical verification of fixed assets under
a phased program of verification at reasonable intervals, which in our
opinion is reasonable. According to the information and explanations
given to us, no material discrepancies were noticed on such
verification.
(c) In our opinion, the fixed assets disposed off do not constitute
substantial part of the fixed assets of the Company and such disposal
has, as such not affected the going concern status of the Company.
2. (a) As explained to us, the inventories have been physically
verified by the management during the year at reasonable intervals
other than material in transit and lying with branches and consignment
agent/stockiest, which have been substantially confirmed by them. In
our opinion, having regard to the nature and location of stocks, the
frequency of verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) On the basis of our examination of records of inventory, in our
opinion, the Company has maintained proper records of its inventories.
According to the information and explanations given to us, no material
discrepancies were noticed on physical verification of inventory as
compared to the book records.
3. Loans granted/taken by the Company:
(a) As informed, the Company has not granted any loans, secured or
unsecured to companies, firms or other parties listed in register
maintained under Section 301 of the Companies Act, 1956.
(b) Since 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, sub-clauses
(b), (c) and (d) of (iii) of the said Order are not applicable.
(c) The Company have taken unsecured loans from a companies listed in
the register maintained under Section 301 of the Companies Act, 1956.
Total number of Parties involved are 2 (Two). Total amount outstanding
as at 31.03.2014 is Rs. Nil/- (Rupees Nil). The maximum amount involved
was Rs.2,49,39,967/- (Rupees Two Crore Forty Nine Lacs Thirty Nine
Thousand Nine Hundred Sixty Seven Only). The Company has not taken any
loans, secured or unsecured from firms or other parties listed in
register maintained under Section 301 of the Companies Act, 1956.
(d) In our opinion, the rate of interest and other terms and conditions
in respect of loans taken from the Companies listed in the register
maintained under Section 301 of the Companies Act, 1956, are not
prima-facie prejudicial to the interest of the Company.
(e) In respect of the loan taken by the Company from the Companies
listed in the register maintained under Section 301 of the Companies
Act, 1956, the interest payments are regular and the principal amount
is repayable on demand.
4. In our opinion and according to explanations given to us, there are
adequate internal control systems commensurate with the size of the
Company and the nature of its business with regard to purchase of
inventory and fixed assets and with regard to sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in such internal control
systems.
5. In respect of transactions entered in the register maintained in
pursuance of Section 301 of the Companies Act, 1956:
(a) In respect of transactions entered in the register maintained in
pursuance of Section 301 of the Companies Act 1956, to the best of our
knowledge and belief and according to the information and explanations
given to us, particulars of contracts or arrangements that needed to be
entered into the register have been so entered.
(b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of contract or
arrangements entered in to the register in pursuance of Section 301 of
the Act and exceeding the value of rupees five lacs in respect of any
party during the year, have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time,
wherever applicable.
6. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
during the year and hence the question of complying with the provisions
of Section 58A and 58AA of the Companies Act, 1956 and the rules framed
thereunder and the directives issued by the Reserve Bank of India,
wherever applicable, does not arise.
7. On the basis of the internal audit reports broadly reviewed by us,
we are of the opinion that, the Company has an adequate internal audit
system commensurate with the size and nature of its business.
8. On the basis of the records produced, we are of the opinion that
prima facie, the cost records and accounts prescribed by the Central
Government of India under Section 209(1)(d) of the Companies Act, 1956,
have been made and maintained by the Company. However, we are not
required to carry out and have not carried out any detailed examination
of such records and accounts.
9. According to the information and explanations given to us in
respect of statutory and other dues :
(a) The Company is generally regular in depositing undisputed statutory
dues, including Provident Fund, Employees'' State Insurance, Income Tax,
Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other
Statutory dues with the appropriate authorities during the year.
(b) According to the information and explanations given to us and on
the basis of records produced before us by the Company, the details of
disputed Income Tax/Custom Duty/Excise Duty/Service Tax which have not
been deposited as on 31st March, 2014 are given below:
Name of Statute Nature of Dues Amount
(Rs. in Lacs)
The Central Excise Act, 1944 Excise Duty 57,41,982
The Central Excise Act, 1944 Excise Duty 5,05,018
The Central Excise Act, 1944 Excise Duty 21,00,056
The Central Excise Act, 1944 Excise Duty 4,38,138
The Central Excise Act, 1944 Excise Duty 8,05,432
The Central Excise Act, 1944 Excise Duty 3,35,090
The Central Excise Act, 1944 Excise Duty 3,90,968
Finance Act, 1994
(Service Tax Provision) Service Tax 2,15,610
Finance Act, 1994
(Service Tax Provision) Service Tax 17,90,457
The Custom Act, 1962 Custom Duty 4,66,000
Central Sales Tax, 1956 Sales Tax 8,57,242
The Income Tax Act, 1962 Income Tax 1,00,03,250
Name of Statute Forum where
dispute is pending
The Central Excise Act, 1944 Gujarat High Court
The Central Excise Act, 1944 CESTAT, Mumbai
The Central Excise Act, 1944 Assistant Commissioner , Halol
The Central Excise Act, 1944 Commissioner (Appeals), Baroda
The Central Excise Act, 1944 Commissioner (Appeals), Baroda
The Central Excise Act, 1944 Commissioner (Appeals), Baroda
The Central Excise Act, 1944 CESTAT, Ahmedabad.
Finance Act, 1994
(Service Tax Provision) Commissioner (Appeals), Baroda
Finance Act, 1994
(Service Tax Provision) CESTAT, Ahmedabad.
The Custom Act, 1962 CESTAT, Mumbai
Central Sales Tax, 1956 Joint Commissioner of
Commercial Tax, Vadodara
The Income Tax Act, 1962 Commissioner of Income Tax
(Appeals), Baroda
10. The Company has no accumulated losses as at the end of the
financial year and it has not incurred cash losses in the current and
immediately preceding financial year.
11. The Company has not defaulted in repayment of dues to banks,
debenture holders and financial institutions.
12. According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted any loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
13. In our opinion, the Company is not a chit fund or a nidhi / mutual
benefit fund / society. Therefore, the provisions of Clause 4(xiii) of
the Companies (Auditor''s Report) Order, 2003 (as amended) are not
applicable to the Company.
14. In our opinion, the Company is not dealing in or trading in
shares, securities debentures and other investments. Accordingly, the
provisions of Clause 4(xiv) of the Companies (Auditor''s Report) Order,
2003 (as amended) are not applicable to the Company.
15. According to the information and explanation given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions, the requirements of Clause 4(xiv) of
the Order, to comment on whether the terms and conditions, whereof are
prejudicial to the interest of the Company, is not applicable.
16. The Company has not taken any term loans during the year.
17. On the basis of the information and explanations given to us and
on an overall examination of the Cash Flow and Balance Sheet of the
Company as at the end of the year, funds raised on short term basis
have, prime facie, not being used for long term investment.
18. According to the information and explanations given to us, 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 Companies Act, 1956.
19. According to the information and explanations given to us and the
records examined by us, the Company has created securities in respect
of debentures issued and outstanding as at the end of the year.
20. According to the information and explanations given to us, the
Company has not made any public issues during the year and therefore
the question of disclosing the end use of money does not arise.
21. During the course of our examination of the books of account
carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations
given to us, we have neither come across any instances of fraud on or
by the Company, noticed or reported during the year, nor have we been
informed of such case by the management.
For J.R.S. Patel & Co.
Chartered Accountants,
Firm Regn. No.107709W
Place : Vadodara Kalpesh Parmar
Date : 29th May, 2014 Partner
Membership No. 103887
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of PANCHMAHAL
STEEL LIMITED which comprise the Balance Sheet as at 31st March 2013,
the Statement of Profit and Loss and Cash Flow Statement for the year
then ended, and a summary of significant accounting policies and other
explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Management is responsible for the preparation of these
financial statements that gives a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards referred to in sub-section
(3C) of Section 211 of the Companies Act, 1956 ("the Act"). This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material mis-statement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material mis-statement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material mis-statement of the financial statements,
whether due to fraud or error. In making those risk assessments, the
auditor considers the internal control relevant to the Company''s
preparation and fair presentation of the financial statements in order
to design audit procedures that are appropriate in the circumstances.
An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of the accounting estimates made
by the Management, as well as evaluating the overall presentation of
the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2013;
(b) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that
date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
a. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
b. In our opinion proper books of account as required by law have been
kept by the Company so far as it appears from our examination of those
books.
c. The Balance Sheet, Statement of Profit and Loss and the Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d. In our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
referred to in sub-section (3C) of Section 211 of the Act.
e. On the basis of written representations received from the directors
as on 31st March, 2013 and taken on record by the Board of Directors,
none of the directors is disqualified as on 31st March, 2013 from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Act.
ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER "REPORT ON OTHER LEGAL AND
REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE ON THE ACCOUNTS FOR
THE YEAR ENDED ON 31st MARCH, 2013 OF PANCHMAHAL STEEL LIMITED, KALOL.
1. In respect of its Fixed Assets :
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets, on the
basis of available information.
(b) The Company carries out physical verification of fixed assets under
a phased program of verification at reasonable intervals, which in our
opinion is reasonable. According to the information and explanations
given to us, no material discrepancies were noticed on such
verification.
(c) In our opinion, the fixed assets disposed off do not constitute
substantial part of the fixed assets of the Company and such disposal
has, as such not affected the going concern status of the Company.
2. (a) As explained to us, the inventories have been physically
verified by the management during the year at reasonable intervals
other than material in transit and lying with branches and consignment
agent/stockiest, which have been substantially confirmed by them. In
our opinion, having regard to the nature and location of stocks, the
frequency of verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) On the basis of our examination of records of inventory, in our
opinion, the Company has maintained proper records of its inventories.
According to the information and explanations given to us, no material
discrepancies were noticed on physical verification of inventory as
compared to the book records.
3. Loans granted/taken by the Company:
(a) As informed, the Company has not granted any loans, secured or
unsecured to companies, firms or other parties listed in register
maintained under Section 301 of the Companies Act, 1956.
(b) Since 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, sub-clauses
(b), (c) and (d) of (iii) of the said Order are not applicable.
(c) The Company has taken an unsecured loan from a company listed in
the register maintained under Section 301 of the Companies Act, 1956.
Total numbers of parties involved are 2 (Two). Total amount outstanding
as at 31.03.2013 is Rs. Nil/- (Rupees Nil). The maximum amount involved
was Rs.3,40,50,684/- (Rupees Three Crore Forty Lacs Fifty Thousand Six
Hundred Eighty Four only). The Company has not taken any loans, secured
or unsecured from firms or other parties listed in register maintained
under Section 301 of the Companies Act, 1956.
(d) In our opinion, the rate of interest and other terms and conditions
in respect of loans taken from the Company listed in the register
maintained under Section 301 of the Companies Act, 1956, are not
prima-facie prejudicial to the interest of the Company.
(e) In respect of the loan taken by the Company from the company listed
in the register maintained under Section 301 of the Companies Act,
1956, the interest payments are regular and the principal amount is
repayable on demand.
4. In our opinion and according to explanations given to us, there are
adequate internal control systems commensurate with the size of the
Company and the nature of its business with regard to purchase of
inventory and fixed assets and with regard to sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in such internal control
systems.
5. In respect of transactions entered in the register maintained in
pursuance of Section 301 of the Companies Act, 1956 :
(a) In respect of transactions entered in the register maintained in
pursuance of Section 301 of the Companies Act 1956, to the best of our
knowledge and belief and according to the information and explanations
given to us, particulars of contracts or arrangements that needed to be
entered into the register have been so entered.
(b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of contract or
arrangements entered in to the register in pursuance of Section 301 of
the Act and exceeding the value of rupees five lacs in respect of any
party during the year, have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time,
wherever applicable.
6. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
during the year and hence the question of complying with the provisions
of Section 58A and 58AA of the Companies Act, 1956 and the rules framed
thereunder and the directives issued by the Reserve Bank of India,
wherever applicable, does not arise.
7. On the basis of the internal audit reports broadly reviewed by us,
we are of the opinion that, the Company has an adequate internal audit
system commensurate with the size and nature of its business.
8. On the basis of the records produced, we are of the opinion that
prima facie, the cost records and accounts prescribed by the Central
Government of India under Section 209(1)(d) of the Companies Act, 1956,
have been made and maintained by the Company. However, we are not
required to carry out and have not carried out any detailed examination
of such records and accounts.
9. According to the information and explanations given to us in
respect of statutory and other dues :
(a) The Company is generally regular in depositing undisputed statutory
dues, including Provident Fund, Employees'' State Insurance, Income Tax,
Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other
Statutory dues with the appropriate authorities during the year.
10. The Company has no accumulated losses as at the end of the
financial year and it has not incurred cash losses in the current and
immediately preceding financial year.
11. The Company has not defaulted in repayment of dues to Banks,
Debenture holders and Financial Institutions.
12. According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted any loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
13. In our opinion, the Company is not a chit fund or a nidhi / mutual
benefit fund / society. Therefore, the provisions of Clause 4(xiii) of
the Order are not applicable to the Company.
14. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of Clause 4(xiv) of the Order are not applicable to the
Company.
15. According to the information and explanation given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions, the requirements of Clause 4(xiv) of
the Order, to comment on whether the terms and conditions, whereof are
prejudicial to the interest of the Company, is not applicable.
16. The Company has not taken any term loans during the year.
17. On the basis of the information and explanations given to us and
on an overall examination of the Cash Flow and Balance Sheet of the
Company as at the end of the year, funds raised on short term basis
have, prime facie, not being used for long term investment.
18. According to the information and explanations given to us, 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 Companies Act, 1956.
19. According to the information and explanations given to us and the
records examined by us, the Company has created securities in respect
of debentures issued and outstanding as at the end of the year.
20. According to the information and explanations given to us, the
Company has not made any public issue during the year and therefore,
the question of disclosing the end use of money does not arise.
21. During the course of our examination of the books of account
carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations
given to us, we have neither come across any instances of fraud on or
by the Company, noticed or reported during the year, nor have we been
informed of such case by the management.
For JRS Patel & Co.
Chartered Accountants,
Regn. No.107709W
Place : Vadodara Kalpesh Parmar
Date : 28th May, 2013 Partner
Membership No.103887
Mar 31, 2012
1. We have audited the attached Balance Sheet of PANCHMAHAL STEEL
LIMITED as at 31st March 2012, Statement of Profit and Loss and also
Cash Flow Statement of the Company for the year ended on that date
annexed thereto. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion
on these financial statements based on our audit.
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 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 Statement on Companies (Auditors' Report) Order,
2003 as amended by Companies (Auditors' Report) (Amendment) Order,
2004, (together the 'Order') 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. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
i) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
ii) In our opinion, proper books of accounts as required by law have
been kept by the Company so far as it appears from our examination of
those books;
iii) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report generally comply with the
applicable mandatory accounting standards referred to in sub- section
(3C) of Section 211 of the Companies Act, 1 956.
v) On the basis of written representations received from the Directors,
as on 31 st March 201 2 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;
In our opinion and to the best of our information and according to the
explanations given to us, the said accounts read together with the
Notes thereon, 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 31 st March 201 2 ;
(b) in the case of the Statement of Profit and Loss, of the Profit for
the year ended on that date ; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE ON THE
ACCOUNTS FOR THE YEAR ENDED ON 31st MARCH, 2012 OF PANCHMAHAL STEEL
LIMITED, KALOL.
1. In respect of its Fixed Assets :
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets, on the
basis of available information.
(b) The Company carries out physical verification of fixed assets under
a phased program of verification at reasonable intervals, which in our
opinion is reasonable. According to the information and explanations
given to us, no material discrepancies were noticed on such
verification.
(c) In our opinion, the fixed assets disposed off do not constitute
substantial part of the fixed assets of the Company and such disposal
has, as such not affected the going concern status of the Company.
2. (a) As explained to us, the inventories have been physically
verified by the management during the year at reasonable intervals
other than material in transit and lying with branches and consignment
agent/stockiest, which have been substantially confirmed by them. In
our opinion, having regard to the nature and location of stocks, the
frequency of verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) On the basis of our examination of records of inventory, in our
opinion, the Company has maintained proper records of its inventories.
According to the information and explanations given to us, no material
discrepancies were noticed on physical verification of inventory as
compared to the book records.
3. Loans granted/taken by the Company:
(a) As informed, the Company has not granted any loans, secured or
unsecured to companies, firms or other parties listed in register
maintained under Section 301 of the Companies Act, 1956.
(b) Since 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, sub-clauses
(b), (c) and (d) of (iii) of the said Order are not applicable.
(c) The Company has taken an unsecured loan from a company listed in
the register maintained under Section 301 of the Companies Act, 1956.
Total amount outstanding as at 31.03.2012 is Rs. Nil/- (Rupees Nil).
The maximum amount involved was Rs. 1,97,00,000/- (Rupees One Crore
Ninety Seven Lacs Only). The Company has not taken any loans, secured
or unsecured from firms or other parties listed in register maintained
under Section 301 of the Companies Act, 1956.
(d) In our opinion, the rate of interest and other terms and conditions
in respect of loans taken from the Company listed in the register
maintained under Section 301 of the Companies Act, 1956, are not
prima-facie prejudicial to the interest of the Company.
(e) In respect of the loan taken by the Company from the Company listed
in the register maintained under Section 301 of the Companies Act, 1956,
the interest payments are regular and the principal amount is repayable
on demand.
4. In our opinion and according to explanations given to us, there are
adequate internal control systems commensurate with the size of the
Company and the nature of its business with regard to purchase of
inventory and fixed assets and with regard to sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in such internal control
systems.
5. In respect of transactions entered in the register maintained in
pursuance of Section 301 of the Companies Act, 1956 :
(a) In respect of transactions entered in the register maintained in
pursuance of Section 301 of the Companies Act 1956, to the best of our
knowledge and belief and according to the information and explanations
given to us, particulars of contracts or arrangements that needed to be
entered into the register have been so entered.
(b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of contract or
arrangements entered in to the register in pursuance of Section 301 of
the Act and exceeding the value of rupees five lacs in respect of any
party during the year, have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time,
wherever applicable.
6. In our opinion and according to the information and explanations
given to us the Company has not accepted any deposits from the public
during the year and hence the question of complying with the provisions
of Section 58A and 58AA of the Companies Act, 1956 and the rules framed
there under and the directives issued by the Reserve Bank of India,
wherever applicable, does not arise.
7. On the basis of the internal audit reports broadly reviewed by us,
we are of the opinion that, the Company has an adequate internal audit
system commensurate with the size and nature of its business.
8. On the basis of the records produced, we are of the opinion that
prima facie, the cost records and accounts prescribed by the Central
Government of India under Section 209(1 )(d) of the Companies Act,
1956, have been made and maintained by the Company. However, we are not
required to carry out and have not carried out any detailed examination
of such records and accounts.
9. According to the information and explanations given to us in
respect of statutory and other dues :
(a) The Company is generally regular in depositing undisputed statutory
dues, including Provident Fund, Employees' State Insurance, Income Tax,
Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other
Statutory dues with the appropriate authorities during the year.
(b) According to the information and explanations given to us and on
the basis of records produced before us by the Company, the details of
disputed Income Tax/Custom Duty/Excise Duty/Service Tax which have not
been deposited as on 31 st March, 2012 are given below:
Amount Forum where
Name of Statute Nature of Dues (Rs. in Lacs) dispute is
pending
The Central Excise
Act, 1944 Excise Duty 57,41,982 Gujarat High Court
The Central Excise
Act, 1944 Excise Duty 5,05,018 CESTAT, Mumbai
The Central Excise
Act, 1944 Excise Duty 21,00,056 CEGAT, Mumbai
The Central Excise
Act, 1944 Excise Duty 2,19,069 Commissioner
(Appeals), Baroda
The Central Excise
Act, 1944 Excise Duty 1,95,484 Commissioner
(Appeals), Baroda
The Central Excise
Act, 1944 Excise Duty 1,70,980 CESTAT, Ahmedabad
The Central Excise
Act, 1944 Excise Duty 3,35,090 Commissioner
(Appeals), Baroda
Finance Act, 1994
(Service Tax
Provision) Service Tax 2,15,606 Commissioner
(Appeals), Baroda
Finance Act, 1994
(Service Tax
Provision) Service Tax 26,84,743 CESTAT, Ahmedabad
The Custom
Act, 1962 Custom Duty 4,66,000 CESTAT, Mumbai
10. The Company has no accumulated losses as at the end of the
financial year and it has not incurred cash losses in the current and
immediately preceding financial year.
11. The Company has not defaulted in repayment of dues to Banks,
Debenture holders and Financial Institutions. .
12. According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted any loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
13. In our opinion, the Company is not a chit fund or a nidhi / mutual
benefit fund / society. Therefore, the provisions of Clause 4(xiii) of
the Companies (Auditor's Report) Order, 2003 (as amended) are not
applicable to the Company.
14. In our opinion, the Company is not dealing in or trading in shares,
securities debentures and other investments. Accordingly, the
provisions of Clause 4(xiv) of the Companies (Auditor's Report) Order,
2003 (as amended) are not applicable to the Company.
15. According to the information and explanation given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions, the requirements of Clause 4(xiv) of
the Order, to comment on whether the terms and conditions, whereof are
prejudicial to the interest of the Company, is not applicable.
16. The Company has not taken any term loans during the year.
17. On the basis of the information and explanations given to us and
on an overall examination of the Cash Flow and Balance Sheet of the
Company as at the end of the year, funds raised on short term basis
have, prime facie, not being used for long term investment.
18. According to the information and explanations given to us, 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 Companies Act, 1956.
19. According to the information and explanations given to us and the
records examined by us, the Company has created securities in respect
of debentures issued and outstanding as at the end of the year.
20. According to the information and explanations given to us, the
Company has not made any public issues during the year and therefore
the question of disclosing the end use of money does not arise.
21. During the course of our examination of the books of account
carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations
given to us, we have neither come across any instances of fraud on or
by the Company, noticed or reported during the year, nor have we been
informed of such case by the management.
For JRS Patel & Co.
Chartered Accountants,
Firm Regn. No.107709W
Place : Vadodara Kalpesh Parmar
Date : 22nd May, 2012 Partner
Membership No.103887
Mar 31, 2011
1. We have audited the attached Balance Sheet of PANCHMAHAL STEEL
LIMITED as at 31 st March 2011, Profit and Loss Account and also Cash
Flow Statement of the Company for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
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 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 Statement on Companies (Auditors' Report) Order,
2003 as amended by Companies (Auditors' Report) (Amendment) Order,
2004, (together the 'Order') 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. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
i) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
ii) In our opinion, proper books of accounts as required by law have
been kept by the Company so far as it 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 generally comply with the
applicable mandatory accounting standards referred to in sub-section
(3C) of Section 211 of the Companies Act, 1956.
v) On the basis of written representations received from the Directors,
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;
In our opinion and to the best of our information and according to the
explanations given to us, the said accounts read together with the
Notes thereon, 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 31 st March 2011 ;
(b) in the case of the Profit and Loss Account, of the Profit for the
year ended on that date ; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE ON THE
ACCOUNTS FOR THE YEAR ENDED ON 31 st MARCH, 2011 OF PANCHMAHAL STEEL
LIMITED, KALOL.
1. In respect of its Fixed Assets :
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets, on the
basis of available information.
(b) The Company carries out physical verification of fixed assets under
a phased programme of verification at reasonable intervals, which in
our opinion is reasonable. According to the information and
explanations given to us, no material discrepancies were noticed on
such verification.
(c) In our opinion, the fixed assets disposed off do not constitute
substantial part of the fixed assets of the Company and such disposal
has, as such not affected the going concern status of the Company.
2. (a) As explained to us, the inventories have been physically
verified by the management during the year at reasonable intervals
other than material in transit and lying with branches and consignment
agent/stockist, which have been substantially confirmed by them. In our
opinion, having regard to the nature and location of stocks, the
frequency of verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) On the basis of our examination of records of inventory, in our
opinion, the Company has maintained proper records of its inventories.
According to the information and explanations given to us, no material
discrepancies were noticed on physical verification of inventory as
compared to the book records.
3. Loans granted/taken by the Company:
(a) As informed, the Company has not granted any loans, secured or
unsecured to companies, firms or other parties listed in register
maintained under Section 301 of the Companies Act, 1956.
(b) Since 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, sub-clauses
(b), (c) and (d) of (iii) of the said Order are not applicable.
(c) The Company has taken an unsecured loan from a company listed in
the register maintained under section 301 of the Companies Act, 1956.
Total amount outstanding as at 31.03.2011 is Rs. Nil/- (Rupees ZERO).
The maximum amount involved was Rs. 1,04,47,945/- (Rupees One Crores
Four Lacs Forty Seven Thousand Nine Hundred Forty Five Only). The
Company has not taken any loans, secured or unsecured from firms or
other parties listed in register maintained under Section 301 of the
Companies Act, 1956.
(d) In our opinion, the rate of interest and other terms and conditions
in respect of loans taken from the Company listed in the register
maintained under Section 301 of the Companies Act, 1956, are not
prima-facie prejudicial to the interest of the Company.
(e) In respect of the loan taken by the Company from the Company listed
in the register maintained under Section 301 of the Companies Act,
1956, the interest payments are regular and the principal amount is
repayable on demand.
4. In our opinion and according to explanations given to us, there are
adequate internal control systems commensurate with the size of the
Company and the nature of its business with regard to purchase of
inventory and fixed assets and with regard to sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in such internal control
systems.
5. In respect of transactions entered in the register maintained in
pursuance of Section 301 of the Companies Act, 1956:
(a) In respect of transactions entered in the register maintained in
pursuance of Section 301 of the Companies Act 1956, to the best of our
knowledge and belief and according to the information and explanations
given to us, particulars of contracts or arrangements that needed to be
entered into the register have been so entered.
(b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of contract or
arrangements entered in to the register in pursuance of Section 301 of
the Act and exceeding the value of rupees five lacks in respect of any
party during the year, have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time,
wherever applicable.
6. In our opinion and according to the information and explanations
given to us the Company has not accepted any deposits from the public
during the year and hence the question of complying with the provisions
of Section 58A and 58AA of the Companies Act, 1956 and the rules framed
there under and the directives issued by the Reserve Bank of India,
wherever applicable, does not arise.
7. On the basis of the internal audit reports broadly reviewed by us,
we are of the opinion that, the Company has an adequate internal audit
system commensurate with the size and nature of its business.
8. On the basis of the records produced, we are of the opinion that
prima facie, the cost records and accounts prescribed by the Central
Government of India under Section 209(1 )(d) of the Companies Act,
1956, have been made and maintained by the Company. However, we are not
required to carry out and have not carried out any detailed examination
of such records and accounts.
9. According to the information and explanations given to us in
respect of statutory and other dues :
a) The Company is generally regular in depositing undisputed statutory
dues, including Provident Fund, Employees' State Insurance, Income Tax,
Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other
Statutory dues with the appropriate authorities during the year.
10. The Company has no accumulated losses as at the end of the
financial year and it has not incurred cash losses in the current and
immediately preceding financial year.
11. The Company has not defaulted in repayment of dues to banks,
debenture holders and Financial Institutions.
12. According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted any loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
13. In our opinion, the Company is not a chit fund or a nidhi / mutual
benefit fund / society. Therefore, the provisions of Clause 4(xiii) of
the Companies (Auditor's Report) Order, 2003 (as amended) are not
applicable to the Company.
14. In our opinion, the Company is not dealing in or trading in
shares, securities debentures and other investments. Accordingly, the
provisions of clauses 4(xiv) of the Companies (Auditor's Report) Order,
2003 (as amended) are not applicable to the Company.
15. According to the information and explanation given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions, the requirements of Clause 4(xiv) of
the Order, to comment on whether the terms and conditions, whereof are
prejudicial to the interest of the Company, is not applicable.
16. The Company has not taken any term loans during the year.
17. On the basis of the information and explanations given to us and
on an overall examination of the Cash Flow and Balance Sheet of the
Company as at the end of the year, funds raised on short term basis
have, prime facie, not being used for long term investment.
18. According to the information and explanations given to us, 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 Companies Act, 1956.
19. According to the information and explanations given to us and the
records examined by us, the Company has created securities in respect
of debentures issued and outstanding as at the end of the year.
20. According to the information and explanations given to us, the
Company has not made any public issues during the year and therefore
the question of disclosing the end use of money does not arise.
21. During the course of our examination of the books of account
carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations
given to us, we have neither come across any instances of fraud on or
by the Company, noticed or reported during the year, nor have we been
informed of such case by the management.
For J.R.S. Patel & Co.
Chartered Accountants,
FirmRegn.No.107709W
Kalpesh Parmar
Partner
Membership No. 103887
Place : Vadodara
Date :30th May, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of PANCHMAHAL STEEL
LIMITED as at 31st March, 2010, Profit and Loss Account and also Cash
Flow Statement of the Company for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Companys management. Our responsibility is to express an opinion on
these financial statements based on our audit.
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 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 Statement on Companies (Auditors Report) Order,
2003 as amended by Companies (Auditors Report) (Amendment) Order,
2004, (together the Order) 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. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
i) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
ii) In our opinion, proper books of accounts 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 generally comply with the
applicable mandatory accounting standards referred to in sub-section
(3C) of Section 211 of the Companies Act, 1956.
v) On the basis of written representations received from the Directors,
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;
In our opinion and to the best of our information and according to the
explanations given to us, the said accounts read together with the
Notes thereon, 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, 2010 ;
(b) in the case of the Profit and Loss Account, of the Profit for the
year ended on that date ; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE ON THE
ACCOUNTS FOR THE YEAR ENDED ON 31st MARCH, 2010 OF PANCHMAHAL STEEL
LIMITED, KALOL.
1. In respect of its Fixed Assets :
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets, on the
basis of available information.
(b) The Company carries out physical verification of fixed assets under
a phased programme of verification at reasonable intervals, which in
our opinion is reasonable. According to the information and
explanations given to us, no material discrepancies were noticed on
such verification.
(c) In our opinion, the fixed assets disposed off do not constitute
substantial part of the fixed assets of the Company and such disposal
has, as such not affected the going concern status of the Company.
2. (a) As explained to us, the inventories have been physically
verified by the management during the year at reasonable intervals
other than material in transit and lying with branches and consignment
agent/stockist, which have been substantially confirmed by them. In our
opinion, having regard to the nature and location of stocks, the
frequency of verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) On the basis of our examination of records of inventory, in our
opinion, the Company has maintained proper records of its inventories.
According to the information and explanations given to us, no material
discrepancies were noticed on physical verification of inventory as
compared to the book records.
3. Loans granted/taken by the Company:
(a) As informed, the Company has not granted any loans, secured or
unsecured to companies, firms or other parties listed in register
maintained under Section 301 of the Companies Act, 1956.
(b) Since 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, sub-clauses
(b), (c) and (d) of (iii) of the said Order are not applicable.
(c) The Company has not taken any unsecured loans from companies, firms
or other parties listed in register maintained under Section 301 of the
Companies Act, 1956.
(d) Since 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,
sub-clauses (e), (f) and (g) of (iii) of the said Order are not
applicable.
4. In our opinion and according to explanations given to us, there are
adequate internal control systems commensurate with the size of the
Company and the nature of its business with regard to purchase of
inventory and fixed assets and with regard to sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in such internal control
systems.
5. In our opinion and according to the information and explanations
given to us, there are no contracts or arrangements referred to in
Section 301 of the Act during the year that need to be entered in the
register maintained under that Section. Accordingly clause (v) (b) of
paragraph 4 of the Order is not applicable to the company for the
current year.
6. In our opinion and according to the information and explanations
given to us the Company has not accepted any deposits from the public
during the year and hence the question of complying with the provisions
of Section 58A and 58AA of the Companies Act, 1956 and the rules framed
there under and the directives issued by the Reserve Bank of India,
wherever applicable, does not arise.
7. On the basis of the internal audit reports broadly reviewed by us,
we are of the opinion that, the Company has an adequate internal audit
system commensurate with the size and nature of its business.
8. On the basis of the records produced, we are of the opinion that
prima facie, the cost records and accounts prescribed by the Central
Government of India under Section 209(1)(d) of the Companies Act, 1956,
have been made and maintained by the Company. However, we are not
required to carry out and have not carried out any detailed examination
of such records and accounts.
9. According to the information and explanations given to us in
respect of statutory and other dues :
(a) The Company is generally regular in depositing undisputed statutory
dues, including Provident Fund, Employees State Insurance, Income Tax,
Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other
Statutory dues with the appropriate authorities during the year.
(b) According to the information and explanations given to us and on
the basis of records produced before us by the Company, the details of
disputed Income Tax/Custom Duty/Excise Duty/Service Tax which have not
been deposited as on 31st March, 2010 are given below:
Amount Forum where
Name of Statute Nature of Dues (Rs. in Lacs) dispute is pending
The Central Excise
Act, 1944 Excise Duty 57.42 Gujarat High Court
The Central Excise
Act, 1944 Excise Duty 5.05 CESTAT, Mumbai
The Central Excise
Act, 1944 Excise Duty 21.00 CEGAT, Mumbai
The Central Excise
Act, 1944 Excise Duty 4.20 Commissioner (Appeals)
Finance Act, 1994 Service Tax 1.95 Commissioner (Appeals)
(Service Tax
Provision)
Finance Act, 1994 Service Tax 26.85 CESTAT, Ahmedabad.
(Service Tax
Provision)
The Custom Act,
1962 Custom Duty 70.54 CESTAT, Mumbai.
Income Tax Act,
1961 Interest on Income Tax 73.74 TheChief Commissioner of
Income Tax, Baroda
10. The Company has no accumulated losses as at the end of the
financial year and it has not incurred cash losses in the current and
immediately preceding financial year.
11. The Company has not defaulted in repayment of dues to banks,
debenture holders and Financial Institutions.
12. According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted any loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
13. In our opinion, the Company is not a chit fund or a nidhi / mutual
benefit fund / society. Therefore, the provisions of Clause 4(xiii) of
the Companies (Auditors Report) Order, 2003 (as amended) are not
applicable to the Company.
14. In our opinion, the Company is not dealing in or trading in
shares, securities debentures and other investments. Accordingly, the
provisions of clauses 4(xiv) of the Companies (Auditors Report) Order,
2003 (as amended) are not applicable to the Company.
15. According to the information and explanation given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions, the requirements of Clause 4(xiv) of
the Order, to comment on whether the terms and conditions, whereof are
prejudicial to the interest of the Company, is not applicable.
16. The Company has not taken any term loans during the year.
17. On the basis of the information and explanations given to us and
on an overall examination of the Cash Flow and Balance Sheet of the
Company as at the end of the year, funds raised on short term basis
have, prime facie, not being used for long term investment.
18. According to the information and explanations given to us, 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 Companies Act, 1956.
19. According to the information and explanations given to us and the
records examined by us, the Company has created securities in respect
of debentures issued and outstanding as at the end of the year.
20. According to the information and explanations given to us, the
Company has not made any public issues during the year and therefore
the question of disclosing the end use of money does not arise.
21. During the course of our examination of the books of account
carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations
given to us, we have neither come across any instances of fraud on or
by the Company, noticed or reported during the year, nor have we been
informed of such case by the management.
For JRS Patel & Co.
Chartered Accountants,
Firm Regn. No.107709W
Place : Vadodara Kalpesh Parmar
Date : 31st May, 2010 Partner
Membership No. 103887