Mar 31, 2023
INDEPENDENT AUDITORSâ REPORT
To
The Members of
STEEL EXCHANGE INDIA LIMITED
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of M/s.Steel Exchange India Limited ("the Company"),
which comprise the Balance Sheet as at March 31,2023, the Statement of Profit and Loss (including Other Comprehensive
Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and a
summary of significant accounting policies and other explanatory information (hereinafter referred to as "the standalone
financial statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone
financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and
except the effect of matter referred to in Basis for qualified opinion give a true and fair view in conformity with the Indian
Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards)
Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of
the Company as at March 31,2023, the profit and total comprehensive income, changes in equity and its cash flows for the
year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our
responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone
Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics
issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our
audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled
our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
standalone financial statements of the current period. These matters were addressed in the context of our audit of the
standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters. We have determined the matters described below to be the key audit matters to be communicated in our
report.
The Company''s Board of Directors are responsible for the preparation of the other information. The other information comprises
the information included in the Management Discussion and Analysis, Board''s Report including Annexures to Board''s
Report, Business Responsibility Report, Corporate Governance and Shareholder''s Information, but does not include the
standalone financial statements and our auditor''s report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our
knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act,2013 with
respect to the preparation of these standalone financial statements that give a true and fair view of the financial position,
financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with
the Ind AS and other accounting principles generally accepted in India including The Indian Accounting Standard specified
under sec.133 of the act. This responsibility also includes maintenance of adequate accounting records in accordance with
the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable
and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating
effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation
of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to
fraud or error.
In preparing the standalone financial statements, management is responsible for assessing the Company''s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative
but to do so.
The Board of Directors are responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism
throughout the audit.
We also
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that
are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our
opinion on whether the Company has adequate internal financial controls system in place and the operating
effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to
cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the
disclosures, and whether the standalone financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate,
makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be
influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in
evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters.
We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on our audit we report that :
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief
were necessary for the purposes of our audit.
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears
from our examination of those books.
c. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of
Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the relevant
books of account.
d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section
133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e. On the basis of the written representations received from the directors as on March 31,2023 taken on record
by the Board of Directors, none of the directors is disqualified as on March 31,2023 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 A". Our report expresses an
unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls
over financial reporting.
g. With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of
section 197(16) of the Act, as amended :In our opinion and to the best of our information and according to the
explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance
with the provisions of section 197 of the Act.
h. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and
according to the explanations given to us :
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone
financial statements.(Refer Note: 3.32 b & c)
ii. There were no amounts which were required to be transferred to the Investor Education and Protection
Fund by the Company.
iii. (a) The Management has represented that, to the best of its knowledge and belief, no funds (which
are material either individually or in the aggregate) have been advanced or loaned or invested
(either from borrowed funds or share premium or any other sources or kind of funds) by the
Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether,
directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever
by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or
the like on behalf of the Ultimate Beneficiaries;
(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which
are material either individually or in the aggregate) have been received by the Company from any
person or entity, including foreign entity ("Funding Parties"), with the understanding, whether
recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or
invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf
fof the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonable and appropriate in the
circumstances, nothing has come to our notice that has caused us to believe that the
representations under sub-clause (i) and (ii) of Rule 11 (e), as provided under (a) and (b) above,
contain any material misstatement.
2. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the Central Government in
terms of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3
and 4 of the Order.
Chartered Accountants
Firm Reg. No:012139S
Date : 29-05-2023 PARTNER
M.No : 229966
UDIN: 23229966BGXVUF3376
Mar 31, 2022
STEEL EXCHANGE INDIA LIMITED
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying standalone financial statements of M/s. Steel Exchange India Limited ("the Company"), which comprise the Balance Sheet as at March 31,2022, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2022, the profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
S.No |
Key Audit matter |
|
1. 2 |
During the year, the Company has issued 12% Compulsorily Convertible Debentures ("CCDs") to M/s Vizag Profiles Private Limited and M/s Viswasamudra Holdings Private Limited for a principal amount of Rs 124.41 crores and 45.67 crores respectively. These CCDs shall be converted into 1,71,60,000 equity shares and 63,00,000 equity shares of the company respectively within 18 months from the date of issue. We identified assessing the accounting of CCDs as a key audit matter because the accounting of such financial instruments is complex and involves judgement due to contractual terms and assumptions used in determining accounting thereof. Auditor''s Response Principal Audit Procedure Our audit procedures to assess the accounting of the CCDs included the following: a) Obtained understanding of the contractual terms of the CCD agreement. b) Obtained accounting analysis of CCDs from the management and reviewed the same in light of appropriate accounting guidance. c) Performed audit procedures on valuation inputs and accounting entries of the transaction. d) Assessing the appropriateness of the disclosures in the financial statement in respect of the financial instruments. |
|
Evaluation of uncertain tax positions The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Refer note no 3.32 to the Standalone Financial Statements Auditor''s Response PRINCIPAL AUDIT PROCEDURE Obtained details of completed tax assessments and demands for the year ended March 31, 2022 from management. Discussed with the management''s underlying assumptions in estimating the tax provision and the possible outcome of the disputes. Additionally, we considered the effect of new information in respect of uncertain tax positions as at March 31,2022 to evaluate whether any change was required to management''s position on these uncertainties. |
||
3 |
Recoverability of Indirect tax receivables As at March 31, 2022, other noncurrent assets include Indirect tax balance receivable amounting to Rs 17,53,82,251 out of which amount of Rs 7,96,93,400 are pending adjudication. Refer Note 3.2 to the Standalone Financial Statements. |
|
Auditor''s Response PRINCIPAL AUDIT PROCEDURE We have verified the relevant documents and records, the sustainability and likelihood of recoverability upon final resolution. |
||
Information Other than the Standalone Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors are responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board''s Report including Annexures to Board''s Report, Business Responsibility Report, Corporate Governance and Shareholder''s Information, but does not include the standalone financial statements and our auditor''s report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act,2013 with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India including The Indian Accounting Standard specified under sec.133 of the act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
o Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
o Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
o Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
o Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
o Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures,
and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on our audit we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the relevant books of account.
d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e. On the basis of the written representations received from the directors as on March 31,2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2022 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 A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.
g. With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended: In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
h. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements.(Refer Note: 3.32 b & c)
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are material
either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
v The company has neither declared nor paid any dividend during the year.
2. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the Central Government in terms
of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the
Order.
Chartered Accountants Firm Reg. No:012139S
Place : Hyderabad (CA S KAVITHA PADMINI)
Date : 25.04.2022 PARTNER
M.No : 229966 UDIN : 21229966AAAACU2937
Mar 31, 2018
Report on the Standalone Ind AS Financial Statements:
1. We have audited the accompanying Standalone Ind AS financial statements of M/s. STEEL EXCHANGE INDIA LIMITED, which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the statement of changes in equity and the statement of Cash Flows for the year ended 31st March, 2018 and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
2. The management and Board of Directors of the company are responsible for the matters stated in section 134(5) of the Companies Act, 2013 (âthe Actâ) 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) and cash flows and changes in equity 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 provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
3. Our responsibility is to express an opinion on these Standalone Ind AS financial statements based on our audit.
4. 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 and the Order issued under section 143(11) of the Act.
5. We conducted our audit of the Standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements 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 Standalone Ind AS financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs 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 Companyâs Directors, as well as evaluating the overall presentation of the Standalone Ind AS financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on Standalone Ind AS financial statements.
Basis for Qualified Opinion
8. We draw your attention to note 4.33 to the Ind AS financial statements with regard to non-recognition of interest expenses amounting to Rs 36.82 crores on the borrowings of the company for the year ended 31st March 2018 which is not in accordance with the requirements of Ind AS 23. Borrowing Cost read with Ind AS 109 Financial Instruments.
Had the aforesaid interest expenses been recognized, finance costs for the year ended 31st March 2018 would have been Rs 172.34 crores instead of reported amount of Rs 135.52 crores. Total expenses for the year ended 31st March, 2018 would have been Rs 1143.44 crores instead of 1106.62 crores. Loss before exceptional items and tax for the year ended 31st March 2018 would have been Rs 203.92 crores instead of the reported amount of Rs 167.11 crores, Loss before Tax for the year ended 31st March 2018 would have been Rs 251.51 crores instead of the reported amount of Rs 214.69 crores, Net Loss after Tax for the year ended 31st March 2018 would have been Rs 206.95 crores instead of reported amount of Rs 170.13 crores. Total comprehensive loss for the year ended 31st March 2018 would have been Rs 206.94 instead of reported amount of Rs 170.12 crores and loss per share for the year ended 31st March 2018 would have been Rs 27.24 instead reported amount of Rs 22.39, other equity and other financial liabilities as at 31st March 2018 would have been Rs 15.32 crores and Rs 260.16 crores instead of reported amount of Rs 52.14 crores and Rs 223.34 crores respectively.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS Financial Statements give the information required by the Act in the manner so required and except the effect of matter referred to in paragraph 8 above give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2018, its total comprehensive income (comprising loss and other comprehensive income) , its cash flows and the statement of changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements:
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), as amended, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure Aâ 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 purposes of our audit;
b) In our opinion except matter referred to in paragraph 8 above, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books of account.
d) In our opinion, except for the matter referred in paragraph 8 above, the aforesaid Standalone Ind AS financial statements comply with the applicable accounting Standards specified under Section 133 of the Act;
e) On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of Section 164(2) of the Act;
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ and
g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us
i. The Company has disclosed the impact of pending litigations on its financial position in the Standalone Ind AS financial statements -Refer to note 4.32 to the financial statements.
ii. 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 occasions during the year under report to transfer any sums to the Investor Education and Protection Fund by the company.
âAnnexure Aâ to the Independent Auditorsâ Report
Referred to in paragraph 1 under the heading âReport on Other Legal & Regulatory Requirementâ of our report of even date to the financial statements of the Company for the year ended March 31, 2018:
1) (a) The Company has maintained proper records showing full particulars, including Quantitative details and situation of fixed assets;
(b)The Fixed Assets have been physically verified by the management in a phased manner, designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the company and nature of its business. Pursuant to the program, a portion of the fixed asset has been physically verified by the management during the year and no material discrepancies between the books records and the physical fixed assets have been noticed.
(c)The title deeds of immovable properties are held in the name of the company
2) The management has conducted the physical verification of inventory at reasonable intervals. The discrepancies noticed on physical verification of the inventory as compared to books records which has been properly dealt with in the books of account were not material.
3) The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability partnerships or other parties covered in the Register maintained under section 189 of the Act. Accordingly, paragraph 3 (iii) (a) to (C) of the Order are not applicable.
4) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and I86 of the Companies Act, 2013 In respect of loans, investments, guarantees, and security.
5) The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.
6) As informed to us, the maintenance of Cost Records has been specified by the Central Government under sub-section (1) of Section 148 of the Act, in respect of the activities carried on by the company. We have broadly reviewed the Cost Records maintained by the Company pursuant to the Companyâs (Cost Records and Audit) Rules, 2014 prescribed by the Central Government and are of the opinion that prima facie the prescribed cost records have been maintained.
7) (a) According to information and explanations given to us and on the basis of our examination of the books of account, and records, there have been delay in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at March 31, 2018 for a period of more than six months from the date on when they become payable.
(b) According to the information and explanation given to us, the following dues of the service tax, duty of customs, duty of excise, value added tax ,central sales tax, Cess and any other statutory dues which have not been deposited with appropriate authorities on account of any dispute.
Name of the Statute |
Nature of Dues |
Period to which the amount relates |
Amount (in Rs.) |
Deposits/paid in (Rs.) |
Forum where the dispute is pending with |
CST Act |
Sales Tax |
2003-04 |
22,43,895/- |
2,80,487/- |
CTO,Gajuwaka, Visakhapatnam |
Sales Tax |
2004-05 |
28,27,172/- |
3,53,397/- |
||
CST Act |
Sales Tax |
2005-06 |
47,85,829/- |
23,92,914/- |
STAT, Visakhapatnam |
AP VAT Act |
2011-12 |
11,57,334/- |
2,89,334/- |
||
AP VAT Act |
Sales Tax |
2011-12 |
13,94,858/- |
3,48,715/- |
The Honâble High Court of Telangana & AP |
AP VAT Act |
Sales Tax |
2012-13 |
4,25,30,002/- |
53,16,250/- |
Appellate Deputy Commissioner, Vijayawada |
AP VAT Act |
Sales Tax |
2013-14 |
31,41,694/- |
7,85,424/- |
Appellate Deputy Commissioner, Visakhapatnam |
AP VAT Act |
Sales Tax |
2011-12 to 201516 |
21,40,76,014 |
NIL |
Commerical Tax Officer , Visakhapatnam. |
CST Act |
Sales Tax |
2013-14 |
8,16,219 |
NIL |
Appellate Deputy Commissioner (CT), Vijayawada |
AP VAT Act |
Sales tax |
2013-14 |
11,85,189 |
5,54,294 |
Appellate Deputy Commissioner (CT), Vijayawada |
Customs Act |
Customs Duty |
2003-04 |
54,35,648/- |
NIL |
Honâble High Court of Telengana & AP |
Customs Act |
Customs Duty |
2012-13 |
67,38,452/- |
NIL |
CESTAT, Bangalore |
Customs Act |
Customs Duty |
2012-13 |
37,66,062 |
NIL |
Commissioner (Appeals), Visakhapatnam. |
Central Excise Act, |
Excise Duty |
2007-08 |
86,30,228/- |
10,00,000/- |
CESTAT, Bangalore |
2008-09 |
1,91,708/- |
NIL |
|||
Central Excise Act |
Excise Duty |
2009-10 , 201011 & 2011-12 |
61,18,776/- |
50,00,000/- |
Commissioner of Central |
2009-10 |
3,893/- |
NIL |
Excise, Visakhapatnam |
||
Central Excise Act |
Excise Duty |
2010-11 |
14,35,189/- |
NIL |
Honâble High Court of Telangana & AP |
Central Excise Act |
Excise Duty |
2014-15 |
6,32,86,487 |
NIL |
Commissioner of Central Excise, Visakhapatnam. |
Central Excise Act |
Service Tax |
2010-11, 201112, 2012-13, 2013-14 & 201415 |
26,468 |
NIL |
Asst. Commissioner of Central Excise, Visakhapatnam. |
Customs Act |
Customs duty |
2012-13 |
2,18,06,647/- |
NIL |
Honâble Customs, Central Excise & Service Tax-Appellate Tribunal, Telangana |
Excise Act |
Excise duty |
2012-13 |
7,73,767/- |
NIL |
Assistant Commissioner of Customs & Central Excise, Visakhapatnam |
Excise Act |
Customs (CVD) |
2012-13 To 2016-17 |
9,42,89,440/- |
NIL |
Commissioner of Central Tax (Audit), Guntur |
Excise Act |
Excise duty |
2014-15 to 201718 |
87,30,013/- |
NIL |
Commissioner of Central Tax & Customs, (Appeals), Guntur |
Service Tax Act |
Service Tax |
2013-14 to 2015-16 |
9,47,253/- |
NIL |
Assistant Commissioner of Central Tax, Vizianagaram |
Buildings and Other Construction Workers Welfare Cess Act, 1996 |
Cess |
2010-11 |
1,27,98,000/- |
NIL |
Honâble High Court of Telangana & AP |
AP Registration & Stamps Act |
Stamp Duty |
2008-09 |
44,99,900/- |
NIL |
The District Registrar, Vizianagaram |
AP Electricity & Regulatory Authority-EPDCL |
Electricity Duty |
2003-14 |
2,25,77,318/- |
NIL |
Honâble Supreme Court , New Delhi |
8) In our opinion and according to the information and explanations given to us, except for loans and borrowings from banks and financial institutions aggregating Rs 214.78 Crores for the period set out below the company has not defaulted in repayment of loans or borrowings to any financial institutions or banks as on at the balance sheet date.
(Rs in Crores)
Particulars |
Upto 3 months |
More than 3 months upto 12 months |
More than 12 months |
Total |
||||
Principal |
Interest |
Principal |
Interest |
Principal |
Interest |
Principal |
Interest |
|
State Bank of India |
8.38 |
19.35 |
27.84 |
49.96 |
13.34 |
2.48 |
49.56 |
71.79 |
Syndicate Bank |
-- |
2.46 |
-- |
7.44 |
-- |
-- |
-- |
9.90 |
Punjab National Bank |
1.12 |
3.43 |
4.44 |
9.24 |
-- |
-- |
5.56 |
12.67 |
Bank of India |
-- |
2.35 |
-- |
6.12 |
-- |
-- |
-- |
8.47 |
Karur Vysya Bank |
2.08 |
2.25 |
6.24 |
5.51 |
4.16 |
0.28 |
12.48 |
8.04 |
Lakshmi Vilas Bank |
-- |
0.95 |
5.00 |
1.83 |
5.00 |
-- |
10.00 |
2.78 |
IDBI Bank |
-- |
1.77 |
-- |
3.47 |
-- |
0.51 |
-- |
5.75 |
Dhanlaxmi Bank |
-- |
0.90 |
-- |
2.70 |
-- |
-- |
-- |
3.60 |
Andhra Bank |
-- |
1.38 |
-- |
4.01 |
-- |
0.19 |
-- |
5.58 |
Canara Bank |
-- |
1.97 |
-- |
6.02 |
-- |
0.61 |
-- |
8.60 |
Total |
11.58 |
36.81 |
43.52 |
96.30 |
22.50 |
4.07 |
77.60 |
137.18 |
9) According to the information and explanations given by the management, the company has not raised moneys by way of initial public offer or further public offer including debt instruments and term Loans. Accordingly, paragraph 3 (ix) of the Order are not applicable.
10) According to the information and explanations given by the management to us, no material fraud by the Company or on the company by its officers or employees has been noticed or reported during the course of audit.
11) According to the information and explanations to us and based on our examination of the records of the company, the company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act;
12) In our opinion and according to information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3 (xii) of the Order is not applicable.
13) According to the information and explanations to us and based on our examination of the records of the company transactions with the related parties are in compliance with section 177 and 188 of Companies Act,2013 where applicable and the details of such transactions have been disclosed in the Financial Statements as required by the applicable accounting standards.
14) According to the information and explanations to us and based on our examination of the records of the company, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3 (xiv) of the Order are not applicable.
15) According to the information and explanations to us and based on our examination of the records of the company, the company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3 (xv) of the Order are not applicable.
16) In our opinion, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 and accordingly, paragraph 3 (xvi) of the Order are not applicable.
âAnnexure Bâ to the Independent Auditorâs Report of even date on the Standalone Ind AS Financial Statements of STEEL EXCHANGE INDIA LIMITED Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of STEEL EXCHANGE INDIA LIMITED (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on âthe 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 Indiaâ 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 companyâs 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.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs 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 âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, 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 Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companyâs 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 companyâs 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 companyâs 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 March 31, 2018, based on âthe 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 Indiaâ
For PAVULURI & Co.
Chartered Accountants
Firm Reg. No:012194S
Place :Visakhapatnam
Date : 30.05.2018 (CA PA RAMAIAH)
PARTNER
M.No :203300
Mar 31, 2016
To
The Members of
STEEL EXCHANGE INDIA LIMITED
Report on the Standalone Financial Statements:
We have audited the accompanying financial statements of M/s. STEEL EXCHANGE INDIA LIMITED, which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the period ended 31st March, 2016 and a summary of significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The management and Board of Directors of the company are responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance 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 provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 control, 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.
Auditors'' 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 financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2016;
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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure A" 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 purposes of our audit;
b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
c) The Balance Sheet ,Statement of Profit and Loss account and cash flow statement dealt with by this Report are in agreement with the books of account;
d) In our opinion, the aforesaid financial statements comply with the applicable accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
e) On the basis of written representations received from the directors as on March 31, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016, 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" and
g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us
i. The Company has disclosed the impact of pending litigations on its financial position in the financial statements -Refer to note 2.29 to the financial statements.
ii. 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 occasions during the year under report to transfer any sums to the Investor Education and Protection Fund by the company.
Referred to in paragraph 1 under the heading ''Report on Other Legal & Regulatory Requirement'' of our report of even date to the financial statements of the Company for the year ended March 31, 2016:
(1) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) The Fixed Assets have been physically verified by the management in a phased manner, designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the company and nature of its business. Pursuant to the program, a portion of the fixed asset has been physically verified by the management during the year and no material discrepancies between the books records and the physical fixed assets have been noticed.
(c) The title deeds of immovable properties are held in the name of the company.
(2) The management has conducted the physical verification of inventory at reasonable intervals. The discrepancies noticed on physical verification of the inventory as compared to books records which has been properly dealt with in the books of account were not material.
3) The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability partnerships or other parties covered in the Register maintained under section 189 of the Act. Accordingly, paragraph 3 (iii) (a) to (C) of the Order are not applicable.
4) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and I86 of the Companies Act, 2013 In respect of loans, investments, guarantees, and security.
5) The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.
6) As informed to us, the maintenance of Cost Records has been specified by the Central Government under sub-section (1) of Section 148 of the Act, in respect of the activities carried on by the company. We have broadly reviewed the Cost Records maintained by the Company pursuant to the Company''s (Cost Records and Audit) Rules, 2014 prescribed by the Central Government and are of the opinion that prima facie the prescribed cost records have been maintained.
(7) (a) According to information and explanations given to us and on the basis of our examination of the books of account, and records, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess and any other statutory dues with the appropriate authorities.
According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at March 31, 2016 for a period of more than six months from the date on when they become payable.
(b) According to the information and explanation given to us, the following dues of the service tax, duty of customs, duty of excise, value added tax ,central sales tax, Cess and any other statutory dues which have not been deposited with appropriate authorities on account of any dispute.
Name of the Statute |
Nature of Dues |
Period to which the amount relates |
Amount in Rs. |
Deposits/ Paid in (Rs..) |
Forum where the dispute is pending with |
CST Act |
Sales Tax |
2003-04 |
22,43,895/- |
2,80,487/- |
CTO,Gajuwaka, |
2004-05 |
28,27,172/- |
3,53,397/- |
Visakhapatnam |
||
CST Act |
Sales Tax |
2005-06 |
47,85,829/- |
11,96,457/- |
STAT-Visakhapatnam. |
AP VAT Act |
2011-12 |
11,57,334/- |
2,89,334/- |
||
AP VAT Act |
Sales Tax |
2011-12 |
13,94,858/- |
3,48,715/- |
The Hon''ble High Court of Telangana & Andhra Pradesh |
AP VAT Act |
Sales Tax |
2013-14 |
31,41,694/- |
7,85,424/- |
Appellate Deputy Commissioner, Visakhapatnam |
Customs Act |
Customs Duty |
2003-04 |
54,35,648/- |
NIL |
Hon''ble High Court of Telangana & Andhra Pradesh CESTAT-Bangalore |
Customs Act |
Customs Duty |
2012-13 |
67,38,452/- |
NIL |
|
Central Excise Act, |
Excise Duty |
2007-08 |
86,30,228/- |
10,00,000/- |
CESTAT-Bangalore |
2008-09 |
1,91,708/- |
NIL |
|||
2009-10 to 2011-12 |
45,89,094/- |
NIL |
|||
Central Excise Act |
Excise Duty |
2009-10 2010-11 & 2011-12 |
2,14,21,207/- |
50,00,000/- |
Commissioner of Central Excise, Visakhapatnam. |
2009-10 |
3,893/- |
NIL |
|||
Central Excise Act |
Excise Duty |
2010-11 |
14,35,189/- |
NIL |
Hon''ble High Court of Telangana & Andhra Pradesh |
Central Excise Act |
Excise Duty |
2014-15 |
6,32,86,487 |
NIL |
Commissioner of Central Excise, Visakhapatnam. |
Central Excise Act |
Excise Duty |
2011-12 & 2012-13 |
2,51,71,939 |
NIL |
Commissioner of Central Excise, Visakhapatnam. |
Central Excise Act |
Service Tax |
2010-11, 2011-12, 2012-13, 2013-14 & 2014-15 |
26,468 |
NIL |
Asst. Commissioner of Central Excise, Visakhapatnam. |
Buildings and Other Construction Workers Welfare Cess Act, 1996 |
Cess |
2010-11 |
1,27,98,000/- |
NIL |
Hon''ble High Court of Telangana & Andhra Pradesh |
AP Registration & Stamps Act |
Stamp duty |
2008-09 |
44,99,900/- |
NIL |
The District Registrar, Vizianagaram. |
AP Electricity & Regulatory Authority -EPDC L |
Cross Subsidy |
2009-10 |
97,56,021/- |
NIL |
Hon,ble High Court of Telangana & AP-Interim Relief Order |
8) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks.
9) According to the information and explanations given by the management, the company has not raised moneys by way of initial public offer or further public offer including debt instruments and term Loans. Accordingly, paragraph 3 (ix) of the Order are not applicable.
10) According to the information and explanations given by the management to us, no material fraud by the Company or on the company by its officers or employees has been noticed or reported during the course of audit.
11) According to the information and explanations to us and based on our examination of the records of the company , the company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act;
12) In our opinion and according to information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3 (xii) of the Order is not applicable.
13) According to the information and explanations to us and based on our examination of the records of the company transactions with the related parties are in compliance with section 177 and 188 of Companies Act,2013 where applicable and the details of such transactions have been disclosed in the Financial Statements as required by the applicable accounting standards.
14) According to the information and explanations to us and based on our examination of the records of the company, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3 (xiv) of the Order are not applicable.
15) According to the information and explanations to us and based on our examination of the records of the company, the company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3 (xv) of the Order are not applicable.
16) In our opinion, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 and accordingly, paragraph 3 (xvi) of the Order are not applicable.
For Pavuluri & Co
Chartered Accountants
Firm Registration No: 012194S
CA. P.A.RAMAIAH
Place :Visakhapatnam Partner
Date : 28.05.2016 M.No.: F-203300
Mar 31, 2015
We have audited the accompanying financial statements of STEEL EXCHANGE
INDIA LIMITED ("the company"), which comprise the Balance Sheet as at
March 31,2015, 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 management and Board of Directors of the company are responsible
for the matters stated in section 134(5) of the Companies Act, 2013
("the Act") with respect to the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance 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
includes maintenance of adequate accounting records in accordance with
the provision of the Act for safeguarding of the assets of the Company
and for preventing and detecting the 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 control,
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.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder. We conducted our
audit in accordance with the Standards on Auditing specified under
section 143(10) of the Act. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the 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 true and fair view
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on
whether the company has in place an adequate internal financial
controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by Company's management and Board of
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.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements, give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India;
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2015;
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.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the act, we give in the Annexure a
statement on the matters specified in paragraphs 3 and 4 of the Order
to the extent applicable.
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
purposes of our audit;
b) In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c) The Balance Sheet, 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 aforesaid financial statements comply with the
applicable Accounting Standards specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014;
e) On the basis of written representations received from the directors
as on March 31,2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31,2015, 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 does not have any pending litigations which would
impact its financial position.
(ii) 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 an occasion in case of the company during the year
under report to transfer any sums to the Investor Education and
Protection Fund.
Annexure referred to in paragraph 7 Our Report of even date to the
members of STEEL EXCHANGE INDIA LIMITED on the accounts of the company
for the year ended 31st March'2015
On the basis of such checks as we considered appropriate and according
to the information and explanations given to us
during the course of our audit, we report that:
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
asset;
(b) The company has a regular programme of physical verification of its
fixed assets by which fixed assets are verified in a phased manner over
a period of three years. In accordance with this programme, certain
fixed assets were verified during the year and no material
discrepancies were noticed on such verification. In our opinion, this
periodicity of physical verification is reasonable having regards to
the size of the company and the nature of its assets;
(ii) (a) The inventories have been physically verified by the
management during the year at reasonable intervals.
(b) The procedures of physical verification of the inventories followed
by the management are reasonable and adequate in relation to the size
of the Company and the nature of its business.
(c) The company has maintained proper records of inventories and the
discrepancies noticed on physical verification of inventories as
compared to book records were not material.
(iii) In our opinion, the Company has not granted any loans but taken
loans from companies, firms or other parties covered in the Register,
maintained under Section 189 of the Companies Act, 2013; The maximum
amount involved during the year Rs.20,00,00,000/- and the year-end
balance of loans taken for such parties were Rs.20,00,00,000/-
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the company and the nature of its business, for the
purchase of fixed assets and for the sale of services. Further, on the
basis of our examination of the books and records of the company and
according to the information and explanations given to us, no major
weakness has been noticed or reported.
(v) In our opinion and according to the information and explanation
given to us, the company has not accepted any deposits from the public
covered under section 73 to 76 of the Companies Act, 2013.
(vi) In our opinion and according to the information and explanation
given to us, the Central Government has not prescribed the maintenance
of cost records under sub-section (1) of Section 148 of the Companies
Act, 2013. We have broadly reviewed the Cost Records maintained by the
Company pursuant to the Company's (Cost Records and Audit) Rules, 2014
prescribed by the Central Government and are of the opinion that prima
facie the prescribed cost records have been maintained. However, we
have not carried out a detailed examination of the cost records with a
view to determine whether they are accurate or complete.
(vii) (a) According to the information and explanations given to us and
on the basis of our examination of the records of the company, amounts
deducted/accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Income Tax, Sales Tax, Wealth
Tax, Service Tax, Duty of Customs, Value added tax, cess and other
material statutory dues have been regularly deposited during the year by
the company with the appropriate authorities. As explained to us, the
company did not have any dues on account of employees' state insurance
and duty of excise.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Income Tax,
Wealth Tax, Service Tax, Sales Tax, Duty of Customs, Excise Duty, Value
added tax and Other material statutory dues were in arrears as at March
31,2015 for a period of more than six months from the date they became
payable.
(c) According to the information and explanations given to us, there
are no material dues of Wealth tax, Duty of Customs and Cess which have
not been deposited with the appropriate authorities on account of any
dispute. However, according to information and explanations given to
us, the following dues of income tax, sales tax, service tax and Value
added tax have not been deposited by the company on account of
disputes;
Nature Period Amount in
Name of the Statute of Dues which the (Rs.)
amount relates
CST Act Sales Tax 2003-04 22,43,895/-
2004-05 28,27,172/-
CST Act Sales Tax 2005-06 47,85,829/-
AP VAT Act 2011-12 11,57,334/-
AP VAT Act Sales Tax 2011-12 13,94,858/-
AP VAT Act Sales Tax 2013-14 31,41,694/-
Customs Act Customs Duty 2003-04 54,35,648/-
Customs Act Customs Duty 2012-13 67,38,452/-
Central Excise Act, Excise Duty 2007-08 86,30,228/-
2008-09 1,91,708/-
2009- 10 to
2011-12 45,89,094/-
Central Excise Act Excise Duty 2009-10 2,14,21,207/-
2010- 11 &
2011-12
2009- 10 3,893/-
Central Excise Act Excise Duty 2010-11 14,35,189/-
Buildings and Other Cess 2010-11 1,27,98,000/-
Construction
Workers Welfare
Cess Act, 1996
AP Registration & Stamp duty 2008-09 44,99,900/-
Stamps Act
AP Electricity & Cross Subsidy 2009-10 97,56,021/-
Regulatory Authority
-EPDC L
Name of the Statute Deposits/ Forum where the dispute is
Paid in pending with
(Rs.)
CST Act 2,80,487/- CTO,Gajuwaka,
3,53,397/- Visakhapatnam
CST Act 11,96,457/- STAT-Visakhapatnam.
AP VAT Act 2,89,334/-
AP VAT Act 3,48,715/- The Hon'ble High Court of
Telangana & Andhra Pradesh
AP VAT Act 7,85,424/- Appellate Deputy Commissioner,
Visakhapatnam
Customs Act NIL Hon'ble High Court of Telangana
& Andhra Pradesh
Customs Act NIL CESTAT-Bangalore
Central Excise Act, 10,00,000/- CESTAT-Bangalore
NIL
NIL
Central Excise Act 50,00,000/- Commissioner of Central Excise,
Visakhapatnam.
NIL
Central Excise Act NIL Hon'ble High Court of
Telangana & Andhra Pradesh
Buildings and Other NIL Hon'ble High Court of
Construction Telangana & Andhra Pradesh
Workers Welfare
Cess Act, 1996
AP Registration & NIL The District Registrar,
Stamps Act Vizianagaram.
AP Electricity & NIL Hon,ble High Court of Telangana
Regulatory Authority & AP- Interim Relief Order
-EPDC L
(d) According to the information and explanations given to us the
amounts which were required to be transferred to the Investor Education
and Protection Fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules there under has not been
transferred to such fund within time.
(viii) The Company has accumulated losses at the end of the financial
year and has not incurred cash losses in the financial year and in the
immediately preceding financial year.
(ix) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of its dues to
banks or financial institution or debenture holders.
(x) According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks, and financial institutions
(xi) In our opinion, the term loans have been applied for the purpose
for which they were raised.
(xii) According to the information and explanations given to us, no
material fraud on or by the company has been noticed or reported during
the course of our audit.
For Pavuluri & Co
Chartered Accountants
Firm Registration No: 012194S
CA. P.A.RAMAIAH
Camp: Visakhapatnam Partner
Date: 09.05.2015 M.No.: F-203300
Mar 31, 2014
We have audited the accompanying financial statements of Steel Exchange
India Limited ("the Company"), which comprise the Balance Sheet as at
March 31,2014, 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, which we have signed under
reference to this report.
Management''s Responsibility for the Financial Statements
The company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the accounting Standards notified under 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
Sec 133 of the Companies Act 2013 and in accordance with the accounting
principles generally accepted in India. This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing and other applicable authoritative
pronouncements 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 misstatements.
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 internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
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 aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2014;
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 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 Section
227(4A) 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 appears from our examination of those
books.
c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
d) In our opinion, the Balance Sheet, the 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
Sec 133 of Companies Act 2013.
e) On the basis of the written representations received from the
directors as on March 31,2014, taken on record by the Board of
Directors, none of the directors is disqualified as on March 31,2014,
from being appointed as a director in terms of Section 274(1)(g) of the
Act.
ANNEXURE TO INDEPENDENT AUDITORS1 REPORT
Referred to in Paragraph 1 under the heading of "report on other legal
and regulatory requirements" of our report of even date
1. In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) As explained to us, all the assets have not been physically
verified by the management during the year but there is a regular
programme of verification which, in our opinion, is reasonable having
regard to the size of the company and the nature of its business. No
material discrepancies were noticed on such physical verification.
(c) According to the information and explanations furnished to us, the
Company has not disposed of a substantial part of its fixed assets
during the year and the going concern status of the company is not
affected.
2. In respect of its inventories:
(a) The inventories have been physically verified by the management
during the year at reasonable intervals.
(b) The procedures of physical verification of the inventories followed
by the management are reasonable and adequate in relation to the size
of the Company and the nature of its business.
(c) The company has maintained proper records of inventories and
discrepancies noticed on physical verification of inventories as
compared to book records were not material.
3. In respect of the loans, secured or unsecured, granted or taken by
the Company to/from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956:
(a) The Company has granted loans to two parties covered in the
Register maintained under Section 301 of the Companies Act, 1956. The
maximum amount outstanding at any time during the year was Rs. 10.22
Crores and year end balance is Nil.
(b) In our opinion and according to the information and explanation
given to us, the rate of interest and other terms and conditions of the
loans given by the company, are not prima facie not prejudicial to the
interest of the company.
(c) The parties have been regular in payment of interest and there is
no stipulation for the repayment of principal and interest.
(d) There is no overdue amount of loans granted to companies, firms or
other parties listed in the register maintained under section 301 of
the Companies Act, 1956.
(e) According to the information and explanation given to us, the
company has not taken any loans during the 9 months period from
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. Accordingly, Paragraph 4
(iii)(e)(f)(g) of the Order is not applicable.
4. In our opinion, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventories, fixed assets and for
the sale of goods. During the course of our audit, we have not observed
any continuing failure to correct the weaknesses in internal control
system.
5. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
(a) According to the information and explanation given to us we are of
the opinion, that the transactions that need to be entered into the
register maintained under section 301 of the Companies Act, 1956 have
been so entered.
(b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 aggregating during the year to Rs. 5,00,000/-
or more in respect of any party have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
time.
6. In our opinion and according to the information and explanation
given to us, the Company has not accepted any deposits as defined under
section 58A of the Companies Act'' 1956. Therefore, the provisions of
Clause (vi) of paragraph 4 of the Order are not applicable to the
Company.
7. In our opinion, the Company has an adequate internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the Cost Records maintained by the Company
pursuant to the Company''s (Cost Accounting Records) Rules 2011
prescribed by the Central Government for maintenance of cost records
under section 209 (1) (d) of the Companies Act, 1956 and are of the
opinion that prima facie the prescribed cost records have been
maintained. However, we have not carried out a detailed examination of
the cost records with a view to determine whether they are accurate or
complete.
9. In respect of Statutory Dues:
(a) According to the books and records of the company, the company is
regular in depositing undisputed statutory dues including Provident
Fund, Investor Education and Protection Fund, Employees'' State
Insurance, Income Tax, Sales Tax, Customs Duty, Excise Duty, Cess and
other statutory dues with appropriate authorities. According to the
information and explanations given to us, there are no undisputed
amounts payable in respect of such statutory dues which have remained
outstanding as at 31st March, 2014 for a period exceeding six months
from the date they became payable.
(b) The disputed statutory dues that have not been deposited on account
of disputed matters pending before appropriate authorities are as
under:
Name of the Statute Nature Period Amount in
of Dues which the Rs.
amount relates
CST Act Sales Tax 2002-03 50,71,067/-
2004-05
CST Act Sales Tax 2005-06 52,20,506/-
2006-07
AP VAT Act Sales Tax 2011-12 13,94,858/-
AP VAT Act Sales Tax 2013-14 31,41,694/-
Customs Act Customs duty 2003-04 54,35,648/-
Customs Act Customs duty 2012-13 67,38,452/-
Central Excise Act Excise Duty 2007-08 88,21,936/-
2008-09
Central Excise Act Excise Duty 2009-10 2,75,43,892/-
2010-11
2011-12
Central Excise Act Excise Duty 2010-11 14,35,189/-
Buildings and Other Cess 2010-11 1,27,98,000/-
Construction
Workers Welfare
Cess Act, 1996
AP Registration & Stamp duty 2008-09 44,99,900/-
Stamps Act
Name of the Statute Deposits/ Forum where the dispute is
Paid in pending with
(Rs.)
CST Act 6,33,884/- Appellate Deputy Commissioner,
Visakhapatnam
CST Act 13,05,126/- STAT-Visakhapatnam.
AP VAT Act 3,48,715/- The Hon''ble High Court of
Andhra Pradesh
AP VAT Act 7,85,424/- Appellate Deputy Commissioner,
Visakhapatnam
Customs Act NIL Hon''ble High Court of
Andhra Pradesh
Customs Act NIL CESTAT-Bangalore
Central Excise Act NIL CESTAT-Bangalore
Central Excise Act 50,00,000/- Commissioner of Central Excise,
Visakhapatnam.
Central Excise Act NIL Hon''ble High Court of
Andhra Pradesh
Buildings and Other NIL Hon''ble High Court of
Construction Andhra Pradesh
Workers Welfare
Cess Act, 1996
AP Registration & NIL The District Registrar,
Stamps Act Vizianagaram.
10. The Company has accumulated losses and has not incurred cash
losses in the current financial year and immediately preceding 9 months
financial period.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of its dues to
banks and financial institutions.
12. Based on audit procedures and according to the information and
explanations given to us, the Company has not granted any loans or
advances on the basis of security by way of pledge of shares,
debentures or 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 are not applicable to the
company.
14. In our opinion, the Company is not dealing or trading in shares,
securities, debentures or other investments and hence, the requirements
of clause 4(xiv) of the Companies (Auditor''s Report) order, 2003 are
not applicable to the Company.
15. According to the information and explanations given to us, the
company has given guarantee to Rs. 288 Crores to the associate company
for loans taken from banks, and financial institutions. The terms and
other conditions, in our opinion are not prima facie prejudicial to the
interest of the company.
16. In our opinion, the term loans raised during the year have been
applied for the purpose for which they were raised.
17. In our opinion and according to the information and explanations
given to us and on an overall examination of the balance sheet of the
company, we report that, the funds raised on short-term basis have not
been used for long-term investments.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Companies Act, 1956.
19. No debentures have been issued by the company and hence, the
question of creating securities in respect thereof does not arise.
20. The company has not raised any monies by way of public issues
during the year.
21. On the basis of our examination and according to the information
and explanations given to us, no material fraud, on or by the Company,
has been noticed or reported during the year.
For Pavuluri & Co
Chartered Accountants
Firm Registration No: 012194S
CA. P.A.RAMAIAH
Camp: Visakhapatnam Partner
Date: 29.05.2014 M.No.: F-203300
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Steel Exchange
India Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2013, the Statement of Profit and Loss and Cash Flow
Statement for the 9 months period ended and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India including
Accounting Standards referred to in Section 211(3C) of the Companies
Act, 1956 ("the Act"). This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatements.
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 internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
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 aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
b) In the case of the Statement of Profit and Loss, of the profit for
the 9 months period ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows for the 9
months period 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 Section
227(4A) 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 appears from our examination of those
books.
c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
d) in our opinion, the Balance Sheet, the Statement of Profit and Loss,
and the Cash Flow Statement comply with the Accounting Standards
referred to in section 211(3C) of the Act;
e) On the basis of the written representations received from the
directors as on March 31, 2013, taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2013,
from being appointed as a director in terms of Section 274(1)(g) of the
Act.
f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
ANNEXURE TO INDEPENDENT AUDITORS'' REPORT
Referred to in Paragraph 1 under the heading of "report on other legal
and regulatory requirements" of our report of even date
1. In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) As explained to us, all the assets have not been physically
verified by the management during the 9 months period but there is a
regular programme of verification which, in our opinion, is reasonable
having regard to the size of the company and the nature of its
business. No material discrepancies were noticed on such physical
verification.
(c) According to the information and explanations furnished to us, the
Company has not disposed of a substantial part of its fixed assets
during the 9 months period and the going concern status of the company
is not affected.
2. In respect of its inventories:
(a) The inventories have been physically verified by the management
during the 9 months period at reasonable intervals.
(b) The procedures of physical verification of the inventories followed
by the management are reasonable and adequate in relation to the size
of the Company and the nature of its business.
(c) The company has maintained proper records of inventories and
discrepancies noticed on physical verification of inventories as
compared to book records were not material.
3. In respect of the loans, secured or unsecured, granted or taken by
the Company to/from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956:
(a) The Company has granted loans to two parties covered in the
Register maintained under Section 301 of the Companies Act, 1956. The
maximum amount outstanding at any time during the 9 months period was
?.10.22 Crores and the 9 months period end balance is ?.10.22 Crores.
(b) In our opinion and according to the information and explanation
given to us, the rate of interest and other terms and conditions of the
loans given by the company, are not prima facie not prejudicial to the
interest of the company.
(c) The parties have been regular in payment of interest and there is
no stipulation for the repayment of principal and interest.
(d) There is no overdue amount of loans granted to companies, firms or
other parties listed in the register maintained under section 301 of
the Companies Act, 1956.
(e) According to the information and explanation given to us, the
company has not taken any loans during the 9 months period from
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. Accordingly, Paragraph 4
(iii)(e)(f)(g) of the Order is not applicable.
4. In our opinion, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventories, fixed assets and for
the sale of goods. During the course of our audit, we have not observed
any continuing failure to correct the weaknesses in internal control
system.
5. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
(a) According to the information and explanation given to us we are of
the opinion, that the transactions that need to be entered into the
register maintained under section 301 of the Companies Act, 1956 have
been so entered.
(b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 aggregating during the 9 months period to
?.5,00,000/- or more in respect of any party have been made at prices
which are reasonable having regard to prevailing market prices at the
relevant time.
6. In our opinion and according to the information and explanation
given to us, the Company has not accepted any deposits as defined under
section 58A of the Companies Act''1956. Therefore, the provisions of
Clause (vi) of paragraph 4 of the Order are not applicable to the
Company.
7. In our opinion, the Company has an adequate internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the Books of Account maintained by the
Company as prescribed by the Central Government for maintenance of cost
records under section 209 (1) (d) of the Companies Act, 1956 and are of
the opinion that prima facie the prescribed accounts and records have
been made and maintained. However, we have not carried out a detailed
examination of the accounts and records with a view to determine
whether they are accurate or complete.
9. In respect of Statutory Dues:
(a) According to the books and records of the company, the company is
regular in depositing undisputed statutory dues including Provident
Fund, Investor Education and Protection Fund, Employees'' State
Insurance, Income Tax, Sales Tax, Customs Duty, Excise Duty, Cess and
other statutory dues with appropriate authorities. According to the
information and explanations given to us, there are no undisputed
amounts payable in respect of such statutory dues which have remained
outstanding as at 31st March, 2013 for a period exceeding six months
from the date they became payable.
(b) The disputed statutory dues that have not been deposited on account
of disputed matters pending before appropriate authorities are as
under:
Name of the Period to Amount in
Nature
Statute which the
of Dues amount
relates
CST Act Sales Tax 2002-03 22,43,895/-
CST Act Sales Tax 2004-05 28,27,172/-
CST Act Sales Tax 2005-06 47,85,829/-
CST Act Sales Tax 2006-07 4,34,677/-
AP VAT Act Sales Tax 2011-12 13,94,858/-
AP VAT Act Sales Tax 2011-12 3,66,07,561/-
Customs Act Customs duty 2003-04 54,35,648/-
Central
Excise Act Excise Duty 2007-08 86,30,228/-
Central
Excise Act Excise Duty 2008-09 1,91,708/-
Central
Excise Act Excise Duty 2009-10 3,893/-
Central
Excise Act Excise Duty 2010-11 14,35,189/-
Central
Excise Act Excise Duty 2011-12 31,78,578/-
Buildings
and Other
Construction
Workers
Welfare
Cess Act,
1996 Cess 2010-11 1,27,98,000/-
AP
Registration &
Stamps Act Stamp duty 2008-09 44,99,900/-
Deposits/ Forum where the dispute is
Paid in pending
(Rs.)
CST Act 2,80,487/- Appellate Deputy Commis
sioner, Visakhapatnam
CST Act 3,53,397/- Appellate Deputy
Commissioner, Visakhapatnam
CST Act 11,96,457/- STAT-Visakhapatnam.
CST Act 1,08,669/- STAT-Visakhapatnam
CST Act 3,48,715/- The Hon''ble High Court of Andhra Pradesh
AP VAT Act 45,75,945/- Appellate Deputy Commissioner,
Visakhapatnam
AP VAT Act NIL Hon''ble High Court of Andhra Pradesh
Central
Excise Act NIL CESTAT-Bangalore
Central
Excise Act NIL CESTAT-Bangalore
Central
Excise Act NIL Commissioner of Central
Excise, Visakhapatnam.
Central
Excise Act NIL Hon''ble High Court of Andhra Pradesh
Central
Excise Act NIL Hon''ble High Court of Andhra Pradesh
Central
Excise Act NIL Hon''ble High Court of Andhra Pradesh
Central
Excise Act NIL The District Registrar, Vizianagaram.
10. The Company has accumulated losses and has not incurred cash
losses in the current 9 months financial period and immediately
preceding 15 months financial period.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of its dues to
banks and financial institutions.
12. Based on audit procedures and according to the information and
explanations given to us, the Company has not granted any loans or
advances on the basis of security by way of pledge of shares,
debentures or 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 are not applicable to the
company.
14. In our opinion, the Company is not dealing or trading in shares,
securities, debentures or other investments and hence, the requirements
of clause 4(xiv) of the Companies (Auditor''s Report) order, 2003 are
not applicable to the Company.
15. According to the information and explanations given to us, the
company has given guarantee to Rs.. 288 Crores to the associate company
for loans taken from banks, and financial institutions. The terms and
other conditions, in our opinion are not prima facie prejudicial to the
interest of the company.
16. In our opinion, the term loans raised during the 9 months period
have been applied for the purpose for which they were raised.
17. In our opinion and according to the information and explanations
given to us and on an overall examination of the balance sheet of the
company, we report that, the funds raised on short-term basis have not
been used for long-term investments.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Companies Act, 1956.
19. No debentures have been issued by the company and hence, the
question of creating securities in respect thereof does not arise.
20. The company has not raised any monies by way of public issues
during the 9 months period.
21. On the basis of our examination and according to the information
and explanations given to us, no material fraud, on or by the Company,
has been noticed or reported during the 9 months period.
For Pavuluri & Co
Chartered Accountants
Firm Registration No: 012194S
CA. P.A.RAMAIAH
Camp: Visakhapatnam Partner
Date: May 27, 2013 M.No.: F-203300
Jun 30, 2012
1. We have audited the attached Balance Sheet of STEEL EXCHANGE INDIA
LIMITED as at 30.06.2012 and also the Statement of Profit and Loss for
the 15 months period 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 Companies' (Auditor's Report) Order, 2003,
issued by the Central Government of India, in terms of Section 227(4A)
of the Companies Act'1956, we enclose in the Annexure a statement on
the matters specified in paragraph 4 and 5 of the said order.
4. Further to our comments in the annexure referred to above, 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 accounts as required by law have
been kept by the company so for as it 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 Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the mandatory
Accounting Standards referred to in Sub-Section 3(C) of Section 211 of
the Companies Act' 1956.
e) On the basis of the written representations received from the
directors, as on 30th June' 2012 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
30th June 2012 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act'1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read in conjunction
with the schedule annexed therewith 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.
i) In the case of the Balance Sheet, of the state of affairs of the
Company as at 30th June 2012;
ii) In the case of the Statement of Profit and Loss, of the Profit of
the Company for the 15 months period ended on that date; and
iii) In the case of the cash flow statement, of the cash flows for the
15 months period ended on that date.
ANNEXURE TO AUDITORS' REPORT STEEL EXCHANGE INDIA LIMITED Referred to
in paragraph 3 of our report of even date,
1. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All the assets have not been physically verified by the management
during the year but there is a regular programme of verification which,
in our opinion, is reasonable having regard to the size of the company
and the nature of its business. No material discrepancies were noticed
on such physical verification.
(c) According to the information and explanations furnished to us, the
Company has not disposed of a substantial part of its fixed assets
during the financial period except for the disposal of Wire drawing
unit 1 located at Auto Nagar, Visakhapatnam as per the note refer to at
2.10 of the Notes to Financial Statements.
2. (a) The inventories have been physically verified by the management
during the year at reasonable intervals.
(b) The procedures of physical verification of the inventories followed
by the management are reasonable and adequate in relation to the size
of the Company and the nature of its business.
(c) The company has maintained proper records of inventories and
discrepancies noticed on physical verification of inventories as
compared to book records were not material.
3. (a) The Company has granted loans to one party covered in the
Register maintained under Section 301 of the Companies Act, 1956. The
maximum amount involved during the period is Rs. 9.09 Crores and the
balance of loan granted to such parties as at 30.06.2012 was Rs. 5.21
Crores.
(b) In our opinion the rate of interest and other terms and conditions
on which loans have been granted to companies, firms or other parties
listed in the registers maintained under Section 301 are not, prima
facie, prejudicial to the interest of the company.
(c) The parties have been regular in the payment of interest and there
is no stipulation for the repayment of Principal and Interest.
(d) There is no overdue amount of loans granted to companies, firms or
other parties listed in the registers maintained under section 301 of
the Companies Act, 1956.
(e) According to the information and explanation given to us, the
Company has, during the financial period, not taken any loans, secured
or unsecured from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
Accordingly, paragraph 4 (iii) (e)(f)(g) of the Order is not
applicable.
4. In our opinion, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventories, fixed assets and for
the sale of goods. During the course of our audit, we have not observed
any continuing failure to correct major weakness in internal control.
5. (a) According to the information and explanation given to us we are
of the opinion, that the transactions that need to be entered into the
register maintained under section 301 of the Companies Act, 1956 have
been so entered. (b) In our opinion and according to the information
and explanation given to us, the transactions made in pursuance of
contracts or arrangements entered in the register maintained under
Section 301 of the Companies Act, 1956 aggregating during the year to
Rs.5,00,000/- or more in respect of any party have been made at prices
which are reasonable having regard to prevailing market prices at the
relevant time.
6. In our opinion and according to the information and explanation
given to us, the Company has not accepted any deposits as defined under
section 58A of the Companies Act'1956.
7. In our opinion, the Company has an adequate internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the Books of Account maintained by the
Company as prescribed by the Central Government for maintenance of cost
records under section 209 (1) (d) of the Companies Act, 1956 and are of
the opinion that prima facie the prescribed accounts and records have
been made and maintained. However, we have not carried out a detailed
examination of the accounts and records.
9. (a) According to the books and records of the company, the company
is regular in depositing undisputed statutory dues including Provident
Fund, Investor Education and Protection Fund, Employees' State
Insurance, Income Tax, Sales Tax, Customs Duty, Excise Duty, Cess and
other statutory dues with appropriate authorities. According to the
information and explanations given to us, there are no undisputed
amounts payable in respect of such statutory dues which have remained
outstanding as at 30th June, 2012 for a period exceeding six months
from the date they became payable.
(b) Disputed Statutory dues such as sales Tax income tax has been
disclosed in Note no:2.28 of notes to accounts
Name of the Nature of Dues Period to which
Statute the amount relates
CST Act Sales Tax 2002-03, 2004-05
APVAT Act Sales tax 2011-12
Customs Act Customs duty 2003-04
Central Excise Act Excise duty 2008-09
Central Excise Act Excise duty 2009-10, 2011-12
Central Excise Act Excise duty 2010-11
Central Excise Act Excise duty 2007-08
Building and Other Cess 2010-11
Construction Workers'
Welfare Cess Act,1996
Name of the Amount in Deposits/ Forum where the
dispute is
Rs. Paid pending
CST Act 50,71,067 633,884 Appl. Dy.
Commissioner
Visakhapatnam
APVAT Act 13,94,858 NIL Appl. Dy.
Commissioner
Visakhapatnam
Customs Act 54,35,648 NIL Hon'ble High Court
of Andhra Pradesh
Central Excise Act 1,91,708 NIL Appeal to CESTAT,
Bangalore
Central Excise Act 123,075 NIL Commissioner of
Central Excise
Visakhapatnam
Central Excise Act 14,35,189 NIL Hon'ble High Court
of Andhra Pradesh
Central Excise Act 86,30,228 NIL Appeal to CESTAT,
Bangalore
Building and other 1,27,98,000 NIL Hon'ble High Court
Constrcution Workers' of Andhra Pradesh
welfare Cess Act,1996
10. The Company has accumulated losses at the end of the financial
period consequent to the absorption of accumulatec losses of GSAL
(India) Limited upon its amalgamation with the Company and has not
incurred cash losses in the current financial period and immediately
preceding financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of its dues to
banks and financial institutions.
12. The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures or 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 are not applicable to the
company.
14. In our opinion, the Company is not dealing or trading in shares,
securities, debentures or other investments and hence, the requirements
of clause 4(xiv) of the Companies (Auditor's Report) order, 2003 are
not applicable to the Company.
15. In our opinion and according to the information and explanations
given to us, the terms and conditions which the Company has given a
Guarantee for loan taken others from banks, and financial institutions
are not, prima facie, prejudicial to the interest of the company.
16. In our opinion, the term loans have been applied for the purpose
for which they were raised.
17. In our opinion and according to the information and explanations
given to us and on an overall examination of the balance sheet of the
company, we report that funds raised on short-term basis have not been
used for long-term investments. No long-term funds have been used to
finance short-term assets.
18. The company has made a preferential allotment of shares to a
company covered in the register maintained under Section 301 of the
Companies Act, 1956 during the 15 months period and the price at which
the shares are allotted is not, prima facie, prejudicial to the
interest of the company.
19. No debentures have been issued by the company and hence, the
question of creating securities in respect there of does not arise.
20. The company has not raised any money by way of public issues
during the 15 months period.
21. On the basis of our examination and according to the information
and explanations given to us, no fraud, on or by the Company, has been
noticed or reported during the 15 months period.
For Pavuluri & Co
Chartered Accountants
Firm Registration No: 012194S
CA. P.A.RAMAIAH
Camp: Visakhapatnam Partner
Date: August 27, 2012 M.No.: F-203300
Mar 31, 2011
We have audited the attached Balance Sheet of STEEL EXCHANGE INDIA
LIMITED as at 31.03.2011 and also the Profit and Loss Account for the
year ended on that date annexed thereto. These financial statements are
the responsibility of the Company's Management. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Companies' (Auditor's Report) Order, 2003, issued by
the Central Government of India, in terms of Section 227(4A) of the
Companies Act'1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said order.
Further to our comments in the annexure referred to above, 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 accounts as required by law have
been kept by the company so for as it appears from our examination of
those books.
c) The Balance Sheet and Profit & Loss account dealt with by this
report are in agreement with the books of account.
d) In our opinion, the Balance Sheet and Profit and Loss account dealt
with by this report comply with the mandatory Accounting Standards
referred to in sub-section (3C) of Section 211 of the Companies
Act'1956.
e) On the basis of the written representations received from the
directors, as on 31 st 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.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read jn conjunction
with the schedule 20 - statement on significant account policies and
notes to accounts annexed therewith and 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.
i) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31 st March' 2011;
ii) In the case of the Profit and Loss Account, of the Profit of the
Company for the year ended on that date; and
iii) In the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
ANNEXURE TO AUDITORS' REPORT STEEL EXCHANGE INDIA LIMITED Referred to
in paragraph 3 of our report of even date,
1. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All the assets have not been physically verified by the management
during the year but there is a regular programme of verification which,
in our opinion, is reasonable having regard to the size of the company
and the nature of its business. No material discrepancies were noticed
on such physical verification.
2. (a) The inventories have been physically verified by the management
during the year at reasonable intervals.
(b) The procedures of physical verification of the inventories followed
by the management are reasonable and adequate in relation to the size
of the Company and the nature of its business.
(c) The company has maintained proper records of inventories and
discrepancies noticed on physical verification of inventories as
compared to book records were not material.
3. (a) The Company has granted loans to two parties covered in the
Register maintained under Section 301 of the Companies Act, 1956. The
balance outstanding as on 01.04.2010 is Rs. 15.91 Crores and the
yearend balance of loan granted to such parties was Rs.12.21 Crores.
(b) According to the information and explanation given to us, the
company has charged interst at the rate of 12% p.a on the above loans.
4. In our opinion, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventories, fixed assets and for
the sale of goods.
5. (a) According to the information and explanation given to us we are
of the opinion, that the transactions that need to be entered into the
register maintained under section 301 of the Companies Act, 1956 have
been so entered.
(b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 aggregating during the year to Rs.5,00,000/- or
more in respect of any party have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
time.
6. In our opinion and according to the information and explanation
given to us, the Company has not accepted any deposits as defined under
section 58A of the Companies Act'1956.
7. In our opinion, the Company has an adequate internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the Books of Account maintained by the
Company as prescribed by the Central Government for maintenance of cost
records under section 209 (1) (d) of the Companies Act, 1956 and are of
the opinion that prima facie the prescribed accounts and records have
been made and maintained. However, we have not carried out a detailed
examination of the accounts and records.
9. (a) According to the books and records of the company, the company
is regular in depositing undisputed statutory dues including Provident
Fund, Investor Education and Protection Fund, Employees' State
Insurance, Income Tax, Sales Tax, Customs Duty, Excise Duty, Cess and
other statutory dues with appropriate authorities. According to the
information and explanations given to us, there are no undisputed
amounts payable in respect of such statutory dues which have remained
outstanding as at 31st March, 2011 for a period exceeding six months
from the date they became payable.
(b) Disputed Statutory dues such as sales Tax income tax has been
disclosed in Point no 14 of Schedule 20.
Name of the Nature of Dues Amount in Rs. Deposits/ Pending with
Statute Paid
CST Act Sales Tax of
2002-2003 22,43,895 2,80,487 Appl. Dy.
Commissioner
Visakhapatnam
Customs Act Customs duty
pertaining Hon'ble High
Court of Andhra
to 2003-04 54,35,648 NIL Pradesh
CST Act Sales Tax of
2004-05 28,27,172 3,53,397 Appl. Dy.
Commissioner
Visakhapatnam
10. The Company has no accumulated losses and has not incurred cash
losses in the current financial year and immediately preceding
financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of its dues to
banks and financial institutions.
12. The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures or 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 are not applicable to the
company.
14. In our opinion, the Company is not dealing or trading in shares,
securities, debentures or other investments and hence, the requirements
of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are
not applicable to the Company.
15. According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks, and financial institutions.
16. In our opinion, the term loans have been applied for the purpose
for which they were raised.
17. In our opinion and according to the information and explanations
given to us and on an overall examination of the balance sheet of the
company, we report that funds raised on short-term basis have not been
used for long-term investments. No long-term funds have been used to
finance short-term assets.
18. The company has made a preferential allotment of share to parties
and companies covered in the register maintained under Section 301 of
the Companies Act, 1956 during the year.
19. No debentures have been issued by the company and hence, the
question of creating securities in respect there of does not arise.
20. The company has not raised any money by way of public issues
during the year.
21. On the basis of our examination and according to the information
and explanations given to us, no fraud, on or by the Company, has been
noticed or reported during the year.
For Pavuluri & Co
Chartered Accountants
Firm Registration No: 012194S
CA. P.A.RAMAIAH
Camp: Malliveedu, L.Kota (M), Vizianagaram (Dt) Partner
Date: 27.08.2011 M.No.:203300
Mar 31, 2010
We have audited the attached Balance Sheet of STEEL EXCHANGE INDIA
LIMITED as at 31.03.2010 and also the Profit and Loss Account for the
year ended on that date annexed thereto. These financial statements are
the responsibility of the Companys management. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Companies (Auditors Report) Order, 2003, issued by
the Central Government of India, in terms of Section 227(4A) of the
Companies Act1956, we enclose in the Annexure a statement on the
matters specified in paragraph 4 and 5 of the said order.
Further to our comments in the annexure referred to above, 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 accounts as required by law have
been kept by the company so for as it appears from our examination of
those books.
c) The Balance Sheet and Profit & Loss account dealt with by this
report are in agreement with the books of account.
d) In our opinion, the Balance Sheet and Profit and Loss account dealt
with by this report comply with the mandatory Accounting Standards
referred to in Sub-Section 3(C) of Section 211 of the Companies
Act1956.
e) On the basis of the written representations received from the
directors, as on 31 st 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 Act1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read in conjunction
with the schedule annexed therewith and subject to Note No.9 of
Schedule -19 regarding non provision of doubtful debts, 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.
i) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31 st March2010;
ii) In the case of the Profit and Loss Account, of the Profit of the
Company for the year ended on that date; and
iii) In the case of the cash flow statement, of the cash flows for the
year ended on that date.
ANNEXURE TO AUDITORS REPORT STEEL EXCHANGE INDIA LIMITED
Referred to in paragraph 3 of our report of even date,
1. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed assets.
(b) All the assets have not been physically verified by the management
during the year but there is a regular programme of verification which,
in our opinion, is reasonable having regard to the size of the company
and the nature of its business. No material discrepancies were noticed
on such physical verification.
(c) According to information and explanations furnished to us the
company has disposed off the fixed assets of the Re-Rolling Mill at
Ongole during the year.
2. (a) The inventories have been physically verified by the management
during the year at reasonable intervals.
(b) The procedures of physical verification of the inventories followed
by the management are reasonable and adequate in relation to the size
of the Company and the nature of its business.
(c) The company has maintained proper records of inventories and
discrepancies noticed on physical verification of inventories as
compared to book records were not material.
3. (a) The Company has granted loans to two parties covered in the
Register maintained under Section 301 of the Companies Act, 1956. The
balance outstanding as on 01.04.2009 is Rs. 13.51 Crores and the yearend
balance of loan granted to such parties was Rs.15.91 Crores.
(b) According to the information and explanation given to us, the
company has charged interest on the above loans.
(c) The Company has taken loan from two parties covered in the Register
maintained under Section 301 of the Companies Act, 1956. The yearend
balance of loan taken from such parties was Rs. 14.44 Crores.
4. In our opinion, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventories, fixed assets and for
the sale of goods.
5. (a) According to the information and explanation given to us we are
of the opinion, that the transactions that need to be entered into the
register maintained under section 301 of the Companies Act, 1956 have
been so entered.
(b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 aggregating during the year to Rs.5,00,000/- or
more in respect of any party have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
time.
6. In our opinion and according to the information and explanation
given to us, the Company has not accepted any deposits as defined under
section 58A of the Companies Act1956.
7. In our opinion, the Company has an adequate internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the Books of Account maintained by the
Company as prescribed by the Central Government for maintenance of cost
records under section 209 (1) (d) of the Companies Act, 1956 and are of
the opinion that prima facie the prescribed accounts and records have
been made and maintained. However, we have not carried out a detailed
examination of the accounts and records.
9. (a) According to the books and records of the company, the company
is regular in depositing undisputed statutory dues including Provident
Fund, Investor Education and Protection Fund, Employees State Insurance,
Income Tax, Sales Tax, Customs Duty, Excise Duty, Cess and other
statutory dues with appropriate authorities. According to the information
and explanations given to us, there are no undisputed amounts payable in
respect of such statutory dues which haveremained outstanding as at 31st
March, 2010 for a period exceeding six months from the date they became
payable.
(b) Disputed Statutory dues such as sales Tax income tax has been
disclosed in Point no 13 of Schedule 19.
Name of the Nature of Dues Amount in Rs. Deposits/
Statute Paid
CST Act Sales Tax of 1999-2000 16,61,238 NIL
APGST Act Sales Tax of 1999-2000 22,81,823 NIL
APGSTAct Sales Tax of 2000-2001 75,89,631 NIL
APGST Act Sales Tax of 2001-2002 28,48,015 14,24,007
CSTAct Sales Tax of 2002-2003 22,43,895 2,80,487
Customs Act Customs duty pertaining
to 2003-04 54,35,648 NIL
CSTAct Sales Tax of 2004-05 28,27,172 3,53,397
Name of the Pending with
Statute
CST Act Sales Tax appellate Tribunal, Hyderabad
APGST Act Sales Tax appellate Tribunal, Hyderabad
APGST Act Sales Tax appellate Tribunal, Hyderabad
APGST Act Sales Tax appellate Tribunal, Hyderabad
CST Act Appl. Dy. Commissioner Visakhapatnam
Customs Actb Honble High Court of Andhra Pradesh
CST Act Appl. Dy. Commissioner Visakhapatnam
10. The Company has no accumulated losses and has not incurred cash
losses in the current financial year and immediately preceding
financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of its dues to
banks and financial institutions.
12. The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures or 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 are not applicable to the
company.
14. In our opinion, the Company is not dealing or trading in shares,
securities, debentures or other investments and hence, the requirements
of clause 4(xiv) of the Companies (Auditors Report) order, 2003 are
not applicable to the Company.
15. According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks, and financial institutions.
16. In our opinion, the term loans have been applied for the purpose
for which they were raised.
17. In our opinion and according to the information and explanations
given to us and on an overall examination of the balance sheet of the
company, we report that funds raised on short-term basis have been used
for long-term investments. No long-term funds have been used to
finance short-term assets.
18. The company has made a preferential allotment of share to parties
and companies covered in the register maintained under Section 301 of
the Companies Act, 1956 during the year.
19. No debentures have been issued by the company and hence, the
question of creating securities in respect there of does not arise.
20. The company has not raised any money by way of public issues
during the year.
21. On the basis of our examination and according to the information
and explanations given to us, no fraud, on or by the Company, has been
noticed or reported during the year.
For Pavuluri & Co
Chartered Accountants
Firm Registration No: 012194S
CA. P.A.RAMAIAH
Place: Hyderabad Partner
Date: 29.05.2010 M.No.:203300
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