Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Sunflag Iron & Steel Company Limited (âthe Companyâ), which comprise the balance sheet as at 31st March 2018, the statement of profit and loss (including other comprehensive income), the cash flows statement and the statement of changes in equity for the year then ended and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âthe standalone Ind AS financial statementsâ).
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134 (5) of the CompaniesAct, 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, cash flows and changes in equity of the company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with relevant Rules issued thereunder.
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 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
Our responsibility is to express and opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone 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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone IndAS financial statements.
Opinion
In ouropinion and to the best ofour 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 give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2018, its profit including other comprehensive income, and its cash flows and the 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 (ââthe Order) issued by the Central Government of India in terms of section 143(11) of the Act, we give in the Annexure A, a statement on the matters specified in the paragraph 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best ofour knowledge and belief were necessary for the purposes of ouraudit.
b) In our opinion, proper books of account as required by law have been kept by the company so far as it appears from our examination of those books;
c) The balance sheet, the statement of profit and loss (including other comprehensive income) the statement of cash flows and the statement of changes in equity dealt with by this Report are in agreement with the books of account;
d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with relevant Rules issued thereunder;
e) On the basis of the written representations received from the directors as on 31st March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2018 from being appointed as a director in terms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the Operating effectiveness of such controls, refer to our separate Report in 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 its standalone Ind AS financial statements -Refer Note 33 to the standalone Ind AS financial statements;
ii. Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the investor Education and Protection Fund by the Company.
âANNEXURE - Aâ TO INDEPENDENT AUDITORâSREPORT
âAnnexure -Aâ to the Independent Auditorâs Report to the Members on standalone Ind As financial statements of Sunflag Iron & Steel Company Limited dated 28th May, 2018.
Report on the matters specified In paragraph 3 of the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) Issued by the Central Government of India In terms of section 143(11) of the Companies Act, 2013 (âthe Actâ) as referred to In paragraph 1 ofâ Report on
Other Legal and Regulatory Requirementsâ section.
i) 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 during the year, the frequency of which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No discrepancies were noticed on such verification.
c) According to the information and explanations given to us and on the basis of the documents verified by us, we report that the title deeds of all immovable properties are held in the name of the Company.
ii) The Management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.
iii) a) The Company has granted unsecured loans to its subsidiaries Sunflag Power Limited and Khappa Coal Company Private Ltd., covered in the register maintained under Section 189 of the Act;
b) The above loan is re-payable on demand as agreed. In respect of this loan, we are informed that the company has not demanded repayment of such loan, thus there is no default on repayment of such loan. In respect of interest on such loan from Khapa Coal Company Private Limited, the company has charged interest for the period 1st April 2017 to 31st March 2018 and waived off as approved in its Board Meeting.
c) The loan given is repayable on demand and hence there is no overdue amount as on the date and the relevant reporting is not applicable.
iv) In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Act, as applicable, in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the Company.
v) The Company has not accepted any deposits from the public with the meaning of directives issued by the Reserve Bank of India and provisions of sections 73 to 76 or any other relevant provisions of the Act, and the Rules framed thereunder.
vi) We have broadly reviewed the Cost Accounting records maintained by the Company pursuant to the rules prescribed by the Central Government for the maintenance of cost records under subsection (1) of section 148 of the Act and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We are, however, not required to make a detailed examination of such books and records.
vii. a) According to the records of the Company examined by us and the information and explanations given to us, the Company is generally regular in depositing its undisputed statutory dues including Employeesâs Provident Fund, Employees, State Insurance, Investor Education and Protection Fund, Income Tax, Wealth Tax, Service Tax, Custom Duty, Excise duty, Cess and any other material statutory dues, as applicable, with the appropriate authorities during the year and there are no such undisputed amounts payable which have remained outstanding as at March 31,2018 for a period of more than six months from the date they became payable.
b) According to the records of the Company, the details of dues of Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and Value added Tax which have not been deposited on account of any dispute and the forum where the dispute is pending are as follows:
Name of Statue |
Nature of dues |
Forum where the dispute is pending |
Period to which the amount relates |
Amount (Rs. in Lakh) |
Central Excise Act,1944 |
Demand of excise duty |
CESTAT, Mumbai |
2013-2014 |
38 |
Central Excise Act,1944 |
Input tax on railway freight |
CESTAT, Mumbai |
2012 - 2013 & 2013 - 2014 |
242 |
Central Excise Act,1944 |
Demand of differential duty of Iron ore |
Commissioner, Central Excise, Nagpur |
2013-2014 |
159 |
Income Tax Act,1961 |
Income tax assessment |
Commissioner of Income Tax (Appeals) |
Assessment year2010 - 2011, 2011-2012 & 2016-2017 |
162 |
Income Tax Act, 1961 |
Income tax assessment |
High Court, Nagpur bench, Honâble Mumbai High Court |
Assessment year 2011-2012 & 2010-2011 |
4,300 |
viii) In our opinion and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institution, bank or debenture holders. The Company does not have any debentures.
ix) In our opinion, and according to the information and explanations given to us, the Company has not raised any money way of initial public offer/further public offer, further term loans taken during the year were applied for the purpose for which the loan were obtained.
x) In our opinion, and according to the information and explanations given to us, we report that no fraud by the company or on the company by the officers and employees of the Company has been noticed reported during the year.
xi) In our opinion, and according to the information and explanations given to us, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 with Schedule V to the Act.
xii) The Company is not a Nidhi Company. Therefore, the provisions of clause 3 (xii) of the Order are not applicable to the Company.
xiii) In our opinion, and according to the information and explanations given to us during the course of audit, transactions with the related parties are in compliance with section 177 and section 188 of the Act and the details have been disclosed in the notes to the standalone Ind AS financial statements, as required by the applicable Indian accounting standards.
xiv) According to the information and explanations given to us and on an overall examination of the books of account, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year and hence not commented upon.
xv) In our opinion, and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him.
xvi) According to the information and explanations given to us, the provisions of section 45-IAof the Reserve Bank of India Act, 1934 are not applicable to the Company.
âAnnexure - Bâ to the Independent Auditorâs Report to the Members on standalone Ind AS financial statements of Sunflag Iron & Steel Company Limited dated 28th May, 2018.
Report on the Internal Financial Controls under Clause (l)of Sub-section 3 of Section 143 of the CompaniesAct, 2013 (âthe Actâ) as referred to in paragraph 2(f) of âReport on Other Legal and Regulatory Requirementsâsection.
We have audited the internal financial controls over financial reporting of Sunflag Iron & Steel Company Limited (âthe Companyâ) as of 31st,March 2018 in conjunction with our audit of the standalone Ind AS 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 the âinternal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.â 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 the respective 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 Act.
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 theAct, 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 judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS 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
Acompanyâs internal financial control overfinancial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. ACompanyâs internal financial control overfinancial reporting includes those policies and procedures that:
a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and
c) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the standalone Ind AS 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 overfinancial 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 overfinancial reporting and such internal financial controls overfinancial reporting were operating effectively as at 3151 March, 2018, based on the internal control overfinancial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Overfinancial Reporting issued by the institute of Chartered Accountants of India.
For S.S. Kothari Mehta & Co.
Chartered Accountants
Firm Regn. No. 000756N
C A SunilWahal
Nagpur Partner
28 May, 2018 Membership Number-087294
Mar 31, 2017
INDEPENDENT AUDITORSâ REPORT ON FINANCIAL STATEMENTS
To
The Members
Sunflag Iron and Steel Company Limited C I N - L 27100 MH 1984 PLC 034003 33, Mount Road, Sadar, Nagpur - 440001 Report on Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Sunflag Iron and Steel Company Limited (âthe Companyâ), which comprise the balance sheet as at March 31, 2017, the statement of profit and loss, including the statement of other comprehensive income, the cash flow statement and the statement of changes in equity for the year then ended, and a summary of significant accounting policies.
Managementâs Responsibility for the Financial Statements
The Companyâs Board of Directors is 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, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the 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
Our responsibility is to express an opinion on these Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 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 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 accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the Ind AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Other Matters
The financial information of the Company for the year ended March 31, 2016 and the transition date opening balance sheet as at April 01, 2015 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements for the years ended March 31, 2016 and March 31, 2015 prepared in accordance with the Companies (Accounting Standards) Rules,2006 (as amended) which were audited by predecessor auditors whose report for the year ended March 31, 2016 & March 31, 2015 dated May 26, 2016 & May 30, 2015 respectively expressed an unmodified opinion on those standalone financial statements. The adjustments to those standalone financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us.
Report On Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure -1â 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 report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c) The balance sheet, statement of profit and loss including the statement of other comprehensive income, the cash flow statement and statement of changes in equity dealt with by this Report are in agreement with the books of account;
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and Companies (Indian Accounting Standards) Rules, 2015, as amended;
e) On the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, 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 2â to this report;
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 its standalone Ind AS financial statements - Refer Note 32 to the standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in Note 9 to these standalone Ind AS financial statements as to the holding of Specified Bank Notes on November 8, 2016 and December 30, 2016 as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Based on our audit procedures and relying on the management representation regarding the holding and nature of cash transactions, including Specified Bank Notes, we report that these disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by the Management.
âAnnexure - 1â to the Independent Auditorâs Report to the members of Sunflag Iron & Steel Company Limited dated May 26, 2017 on standalone financial statements.
On the basis of sample checks 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 assets.
b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
c) According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are held in the name of the company.
ii) The Management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification
iii) a) The Company has granted unsecured loans to its subsidiaries Sunflag Power Limited and Khappa Coal Co. Pvt. Ltd., covered in the register maintained under Section 189 of the Act;
b) The terms and conditions of the grant of such loans are not prejudicial to the Companyâs interest;
c) The loan given is repayable on demand and hence there is no overdue amount as on the date and the relevant reporting is not applicable.
iv) In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Act, as applicable, in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the Company.
v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of directives issued by the Reserve Bank of India and provisions of sections 73 to 76 or any other relevant provisions of the Act and the Rules framed there under.
vi) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 148(1) of the Act, regarding activities of the Company and are of the opinion that prima facie, the specified accounts and records have been made and maintained. However, we are not required to carry out detailed examination of the same.
vii) a) In our opinion and according to the information and explanations given to us, according to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Sales tax, Wealth-tax, Custom Duty, Excise Duty, Cess and other material statutory dues, wherever applicable, have been generally regularly deposited with the appropriate authorities during the year. However, there are no such undisputed statutory dues payable for a period of more than six months from the date they became payable as at March 31, 2017.
b) According to the information and explanations given to us and as per the books and records examined by us, details of dues of Income Tax, Excise duty and Sales tax which have not been deposited on account of any dispute and the forum where the dispute is pending is as follows:
Statement of unpaid disputed statutory dues and annexure to report as at 31st March, 2017 |
|||||
Particulars of Statutory Dues |
Amount (Rs, in Lakhs) |
Period to which the amount related |
Forum where dispute is pending |
Whether paid or unpaid |
|
Excise Duty |
|||||
Deptt.''s show cause |
27 |
2009 |
- 2010 |
Commissioner, Central Excise |
Not Deposited |
Departmental appeal (penalty) |
38 |
2013 |
- 2014 |
Tax Appellate Tribunal |
Deposited |
Total |
65 |
||||
Income Tax |
|||||
Company''s appeals |
211 |
2006 |
- 2007 |
Income Tax Appellate Tribunal |
Deposited |
103 |
2007 |
- 2008 |
Income Tax Appellate Tribunal |
Deposited |
|
240 |
2009 |
- 2010 |
Income Tax Appellate Tribunal |
Deposited |
|
12 |
2010 |
- 2011 |
Commissioner of Income Tax (Appeal) |
Deposited |
|
47 |
2015 |
- 2016 |
Commissioner of Income Tax (Appeal) |
Deposited |
|
Total |
613 |
viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.
ix) In our opinion, and according to the information and explanations given to us, the Company has not raised any money by way of initial public offer / further public offer. Further, term loans taken during the year were applied for the purpose for which the loans were obtained.
x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
xii) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of the Act, where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under audit and hence not commented upon.
xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of the Act.
xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
âAnnexure -2â to the Independent Auditorâs Report of even date on the standalone Financial Statements of Sunflag Iron & Steel Company 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 Sunflag Iron & Steel Company Limited (âthe Companyâ) as of March 31, 2017 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 the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. 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 the 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 Act.
Auditorâs 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 as specified under section 143(10) of the Act to the extent 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 judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the 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, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India
For S.S. Kothari Mehta & Co. For Patel, Shah & Joshi
Chartered Accountants Chartered Accountants
Firm Regn. No. 000756N Firm Regn. No. 107768W
CA Sunil Wahal CA Jayant I. Mehta
Nagpur Partner Partner
26th May, 2017
Membership Number - 087294 Membership Number - 042630
Mar 31, 2016
To
The Members
Sunflag Iron and Steel Company Limited C I N - L 27100 MH 1984 PLC 034003
33, Mount Road, Sadar, Nagpur - 440001
Report on Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements of SUNFLAG IRON AND STEEL COMPANY LIMITED (âthe Companyâ) which comprise of Balance Sheet as at 31st March 2016, Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgmentsâ and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs 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 auditorâs 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 controls relevant to the Companyâs 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 Companyâs Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the State of affairs of the Company as at 31st March, 2016 and its profit and its cash-flows for the year ended on that date.
Report On Other Legal and Regulatory Requirements
As required by the Companies (Auditorâs Report) Order, 2016 (âthe orderâ) issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Companies Act, 2013, we give in the Annexure-A, 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 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, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;
d) in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
e) on the basis of the written representations received from the directors as on 31st March, 2016, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 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 the 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 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 its financial statements - Refer Annexure - C of our Report and note 27.3(i) to the financial statements.
ii) The Company does not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii) The Company does not have any pending amount, required to be transferred, to the Investor Education and Protection Fund.
Referred to in paragraph under "Report on the other legal and regulatory requirements" section of our report of even date on the accounts of the Company for the year ended 31st March 2016 :
On the basis of sample checks 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 assets.
b) The fixed assets have been physically verified by the management at reasonable intervals, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such verification.
c) i) According to the information and explanations given to us and the records examined by us and based on the
examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising the immovable properties of land acquired and buildings which are freehold, are held in the name of the Company as at the balance sheet date.
ii) In respect of immovable properties of land that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement.
ii) We are informed that the physical verification of inventory has been conducted during the year by the management at reasonable intervals. As explained to us, no material discrepancies were noticed on such verification.
iii) a) According to the information and explanations given to us, the Company has, during the year, granted loan and advance to a Body Corporate covered in the register maintained under Section 189 of the Companies Act, 2013.
b) In the case of loan and advance granted to the Body Corporate listed in the register maintained under Section 189 of the Act. the terms of arrangements do not stipulate any repayment schedule and the loans are repayable on demand. Accordingly, the paragraph 3(iii)(b) of the Order is not applicable to the Company in respect of repayment of the principal amount.
c) There are no overdue amounts of more than rupees one lakh in respect of the loan and advance granted to the body corporate listed in the register maintained under Section 189 of the Act.
iv) According to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 in respect of loans, investment, guarantees and security.
v) We are informed that the Company has not accepted any deposit during the year under Section 73 to 76 of the Companies Act, 2013 and rules made there under.
vi) According to the information and explanations given to us, Central Government has prescribed the maintenance of cost records under section (1) of the Section 148 of the Companies Act, 2013. We have broadly reviewed the cost records maintained by the Company and are of the opinion that prima facie the Company has maintained the prescribed cost records pursuant to the Companies (Cost Records and Audit) Rules 2014.
vii) a) The Company is regular in depositing undisputed statutory dues including Provident Fund, Employeesâ State Insurance,
Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other statutory dues to the appropriate authorities.
b) No disputed amounts payable, other than those mentioned in the attached Annexure - C, in respect of Income Tax, Service Tax, Sales Tax or Duty of Customs or Duty of Excise or Value Added Tax were outstanding as at 31st March, 2016.
viii) The Company has not defaulted in repayment of any loans or borrowings from financial institutions, banks, Government or dues to debenture holders during the year. Accordingly, clause (viii) of the Order is not applicable and hence not commented upon.
ix) The Company has not raised money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, clause (ix) of the Order is not applicable and hence not commented upon.
x) According to the information and explanations given to us, no material fraud by the Company or any fraud on the Company by its officers or employees has been noticed or reported during the year.
xi) According to the information and explanations given to us, the managerial remuneration has been paid or provided for, in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act 2013.
xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, clause (xii) of the order is not applicable and hence not commented upon.
xiii) According to the information and explanations given to us, all transactions with related parties are in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.
xiv) The Company has not made any preferential allotment or private placement of shares or full or partly convertible debentures during the year under review.
xv) According to the information and explanations given to us and based on our examination of the record of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly, clause
(xv) of the Order is not applicable and hence not commented upon.
xvi) The Company is not required to be registered under Section 45-1A of the Reserve Bank of India Act, 1934. Accordingly, the clause
(xvi) of the Order is not applicable to the Company and hence not commented upon.
"Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Sunflag Iron and Steel Company Limited ("the Company) as of 31st March, 2016 in conjunction with our audit of the financial statements of the Company for the period ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining Internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(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 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 on internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial control over financial reporting includes those policies and procedures that;
1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2016 based on, the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Statement of unpaid disputed statutory dues and annexure to report as at 31st March, 2016 |
||||
Particulars of Statutory Dues |
Amount (Rs, in Lacs) |
Period to which the amount related |
Forum where dispute is pending |
Whether paid or unpaid |
Excise Duty Deptt.''s show cause Departmental appeal (penalty) Total |
27 38 65 |
2009 - 2010 2013 - 2014 |
Commissioner, Central Excise Tax Appellate Tribunal |
Not Deposited |
Sales Tax Company''s appeal Total |
2.659 2.659 |
2005 - 2006 to 2009 - 2010 |
High Court / Supreme Court (Although the Company has filed Writ Petition but has paid this amount under protest) |
Deposited under protest |
Income Tax Company''s appeals Total |
353 100 235 214 581 54 14 160 1 2 1,723 |
2005 - 2006 2007 - 2008 2008 - 2009 2009 - 2010 2005 - 2006 2006 - 2007 2008 - 2009 2009 - 2010 2010 - 2011 |
Income Tax Appellate Tribunal Income Tax Appellate Tribunal Income Tax Appellate Tribunal Commissioner of Income Tax (Appeal) Commissioner of Income Tax (Appeal) Commissioner of Income Tax (Appeal) Commissioner of Income Tax (Appeal) Commissioner of Income Tax (Appeal) Commissioner of Income Tax (Appeal) |
Deposited Deposited Deposited Deposited Not Deposited Not Deposited Not Deposited Not Deposited Not Deposited |
For Patel, Shah & Joshi
Chartered Accountants
Firm Regn. No. 107768W
CA Jayant I. Mehta
Nagpur partner
28th May 2016 Membership Number - 42630
Mar 31, 2015
We have audited the accompanying Standalone Financial Statements of
SUNFLAG IRON AND STEEL COMPANY LIMITED ("the Company") which
comprises Balance Sheet as at 31st March 2015, Statement of Profit and
Loss and the Cash Flow Statement for the year then ended, and a summary
of significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 ("the Act")
with respect to the preparation of these standalone financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgements and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgement, 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 controls relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well
as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
gives the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India of the State of affairs of the Company as
at 31st March, 2015 and its profit and its cash flows for the year
ended on that date.
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 Companies Act, 2013, we give in
an Annexure a statement on the matters specified in para 3 and 4 of the
order, to the extent applicable.
As required by Section 143 (3) of the Act, we report that ;
a) we have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
b) in our opinion, proper books of account as required by law have been
kept by the Company so far as it appears from our examination of those
books.
c) the Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
d) in our opinion, the aforesaid standalone financial statements comply
with the Accounting Standards specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) on the basis of the written representations received from the
directors as on 31st March, 2015, taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act; and
f ) with respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i) The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Annexure-A of
our Report and note 27.3 to the financial statements.
ii) The Company has made necessary provision, as required under the
applicable law or accounting standards, for material foreseeable
losses, if any, on long term contracts including derivatives contracts.
iii) There has been no delay in transferring amounts, required to be
transferred to the Investor Education and Protection Fund by the
Company.
ANNEXURE TO INDEPENDENT AUDITOR'S REPORT
The Annexure referred to in our Independent Auditors' Report to the
members of the Company on the Standalone financial statements for the
year ended 31st March 2015, we report that
i) In respect of Fixed assets;
a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b) The fixed assets are physically verified by the management at
reasonable intervals, which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets. No
material discrepancies were noticed on such verification.
ii) In respect of Inventories;
a) We are informed that during the year, the management has physically
verified the inventories. In case of material lying with third parties,
certificates confirming stock have been received in respect of a
substantial portion of stock held. In our opinion, the frequency of
verification is reasonable.
b) According to the information and explanations given to us, the
procedure of physical verification of inventories followed by the
management is reasonable and adequate in relation to the size of the
Company and the nature of its business.
c) The Company has maintained proper records of inventories. As
explained to us, there were no material discrepancies noticed on
physical verification of inventories as compared to the book records.
iii) a) According to the information and explanations given to us, the
Company has, during the year, granted loan and advance to a body
corporate covered in the register maintained under Section 189 of the
Companies Act, 2013.
b) In the case of loan and advance granted to the body corporate listed
in the register maintained under section 189 of the Act. The terms of
arrangements do not stipulate any repayment schedule and the loans are
repayable on demand. Accordingly, the paragraph 3(iii)(b) of the Order
is not applicable to the Company in respect of repayment of the
principal amount.
c) There are no overdue amounts of more than rupees one lakh in respect
of the loan and advance granted to the body corporate listed in the
register maintained under section 189 of the Act.
iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchases of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major weaknesses in internal control system.
v) According to the information and explanations given to us, the
Company has not accepted any deposit from the public.
vi) We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies (Cost Accounting Records) Rules, 2014
prescribed by the Central Government under Sub Section 1 of Section 148
of the Companies Act, 2013 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made 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
the records of the Company examined by us, the Company has been
generally depositing undisputed statutory dues including Provident
Fund, Employees' State Insurance dues, Income Tax, Investor Education
and Protection Fund, Sales Tax, Wealth Tax, Customs Duty, Service Tax,
Excise Duty, Cess and other material statutory dues applicable to it
with the appropriate authorities and no undisputed amount payable in
respect of the above mentioned statutory dues are in arrears for a
period exceeding six months from the date of their becoming payable.
b) According to the records of the Company, the details of disputed
dues of Income Tax, Wealth Tax, Duty of Custom, Sales Tax and Excise
Duty & Cess are enclosed in Annexure A.
c) There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
viii) The Company does not have any accumulated losses at the end of
the financial year 31st March, 2015. Further, the Company has not
incurred cash losses during the financial year ended 31st March, 2015
and in the immediately preceding financial year ended 31st March, 2014.
ix) Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the Company has
not defaulted in repayment of dues to financial institutions, banks and
debenture holders.
x) According to the information and explanations given to us, the
Company has not given any guarantee during the year for loans taken by
others from banks or financial institutions.
xi) In our opinion, the term loans have been applied for the purpose
for which they were raised.
xii) On the basis of our examination and according to the information
and explanation given to us, no material fraud on or by the Company has
been noticed or reported during the course of our audit.
Annexure - A
Statement of disputed statutory dues and annexure to report as at 31st
March 2015
Particulars of Amount Period to which Forum where dispute
Statutory Dues (Rs. in Lacs) amount related is pending
Excise Duty
Deptt.'s show cause 27 2009 - 2010 Commissioner,
Central Excise
Departmental appeal 38 2013 - 2014 Tax Appellate Tribunal
(penalty)
Total 65
Sales Tax
2005 - 2006 High Court / Supreme
Company's appeal 2,659 to Court (Although the
Company has filed
Writ Petition but has
Total 2 659 2009 - 2010 paid this amount
under protest)
Income Tax
Company's appeals 379 2005 - 2006 Income Tax Appellate
Tribunal
188 2006 - 2007 Income Tax Appellate
Tribunal
309 2007 - 2008 Income Tax Appellate
Tribunal
235 2008 - 2009 Income Tax Appellate
Tribunal
214 2009 - 2010 Commissioner of Income
Tax (Appeal)
Total 1,325
Particulars of Statutory Dues Whether paid or unpaid
Excise Duty
Deptt.'s show cause Not Deposited
Departmental appeal (penalty) Deposited
Total
Sales Tax
Company's appeal Deposited under protest
Total
Company's appeals Deposited
Deposited
Deposited
Deposited
Deposited
For PATEL, SHAH & JOSHI
CHARTERED ACCOUNTANTS
Firm Regn. No. 107768W
CA JAYANT I. MEHTA
Nagpur PARTNER
30th May 2015 Membership Number - 42630
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of SUNFLAG IRON
AND STEEL COMPANY LIMITED (the "Company"), which comprise the Balance
Sheet as at 31st March 2013, the Statement of Profit and Loss and the
Cash Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards referred to in Section 211(3C)
of the Companies Act, 1956 (the "Act") and in accordance with the
accounting principles generally accepted in India. This responsibility
includes the design, implementation and maintenance of internal
controls relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatements, 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 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 control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company''s internal control. An audit also includes
evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Management, as
well as evaluating the overall presentation of the financial
statements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the 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 31st March 2013;
b) in the case of the Statement of Profit and Loss, of the loss of the
Company for the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
2. As required by Section 227(3) of the Act, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
b) In our opinion, proper books of account as required by law have been
kept by the Company so far as it appears from our examination of those
books.
c) The Balance Sheet, 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 31st March 2013 taken on record by the Board of
Directors, none of the Directors is disqualified as on 31st March 2013
from being appointed as a Director in terms of Section 274(1)(g) of the
Act.
ANNEXURE TO INDEPENDENT AUDITOR''S REPORT
[Referred to in Paragraph 1 under the heading
"Report on Other Legal and Regulatory Requirements" of our report of
even date]
i. In respect of Company''s fixed assets:
a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets on the
basis of available information.
b) A major proportion of the assets have been physically verified by
the management in accordance with a phased program of verification
adopted by the Company. In our opinion, the frequency of verification
is reasonable, having regard to the size of the Company and the nature
of its assets. As informed to us, no material discrepancy has been
noticed on such verification.
c) In our opinion, the Company has not disposed off a substantial part
of its fixed assets during the year and the going concern status of the
Company is not affected.
ii. In respect of its inventories :
a) We are informed that during the year, the management has physically
verified the inventories. In case of material lying with third parties,
certificates confirming stock have been received in respect of a
substantial portion of stock held. In our opinion, the frequency of
verification is reasonable.
b) According to the information and explanations given to us, the
procedure of physical verification of inventories followed by the
management is reasonable and adequate in relation to the size of the
Company and the nature of its business.
c) The Company has maintained proper records of inventories. As
explained to us, there were no material discrepancies noticed on
physical verification of inventories as compared to the book records.
iii. a) According to the information and explanations given to us, the
Company has, during the year, granted loans and advances to the
Companies covered in the register maintained under Section 301 of the
Companies Act 1956, as per details hereunder:
b) There is no stipulation for the repayment of principal and the
interest.
c) According to the information and explanations given to us, the
Company has, during the year, 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,
paragraphs 4 (iii) (e) (f) (g) of the Order is not applicable.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchases of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.
v. According to the information and explanation given to us, during
the year, there were no transactions that need to be entered into
the register maintained under Section 301 of the Companies Act, 1956.
vi. According to the information and explanations given to us, the
Company has not accepted any deposit from the public. Therefore, the
provisions of Clause (vi) of paragraph 4 of the Order are not
applicable to the Company. vii. In our opinion, the Company has an
internal audit division, which is commensurate with size and the nature
of its business. viii. We have broadly reviewed the cost records
maintained by the Company pursuant to the Companies (Cost Accounting
Records) Rules, 2011 prescribed by the Central Government 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. We have,
however, not made a detailed examination of the cost records with a
view to determine whether they are accurate or complete. ix. a)
According to the information and explanations given to us and the
records of the Company examined by us, the Company has been generally
depositing undisputed statutory dues including Provident Fund,
Employees'' State Insurance dues, Income Tax, Investor Education and
Protection Fund, Sales Tax, Wealth Tax, Customs Duty, Service Tax,
Excise Duty, Cess and other statutory dues applicable to it with the
appropriate authorities. b) We are informed that there are no
undisputed statutory dues as at the year end, outstanding for a period
of more than six months from the date they became payable.
c) According to the records of the Company, the details of disputed
dues of Income Tax, Sales Tax and Excise Duty & Cess are enclosed in
Annexure A. x. The Company does not have accumulated losses at the
end of the financial year 31st March 2013. Further, the Company has not
incurred cash losses during the financial year ended 31st March 2013
and in the immediately preceding financial year ended 31st March 2012.
xi. Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the Company has
not defaulted in repayment of dues to financial institutions, banks and
debenture holders. xii. In our opinion and according to the
explanations given to us and based on the information available, no
loans and advances have been granted by the Company on the basis of
security by way of pledge of shares, debentures and other securities.
xiii. The Company is not a Chit Fund / Nidhi / Mutual Benefit Fund /
Society to which the provisions of special statute relating to Chit
Fund are applicable.
xiv. As the Company is not dealing or trading in shares, securities,
debentures and other investments, paragraph 4(xiv) of the Order is not
applicable.
xv. According to the information and explanations given to us, the
Company has not given any guarantee during the year for loans taken by
others from banks or financial institutions.
xvi. In our opinion, the term loans have been applied for the purpose
for which they were raised.
xvii. According to the information and explanations given to us and on
an overall examination the Balance Sheet of the Company, we are of the
opinion that during the year short-term funds have not been used to
finance long-term investments.
xviii. The Company has not made preferential allotment of shares during
the year.
xix The Company has not issued debentures during the year.
xx. The Company has not raised money by way public issue during the
year.
xxi. On the basis of our examination and according to the information
and explanation given to us, no material fraud on or by the Company has
been noticed or reported.
For PATEL, SHAH & JOSHI
CHARTERED ACCOUNTANTS
Firm Regn. No. 107768W
CA JAYANT I. MEHTA
Nagpur PARTNER
30th May 2013 Membership Number - 42630
Mar 31, 2012
1. We have audited the attached Balance Sheet of SUNFLAG IRON AND
STEEL COMPANY LIMITED as at 31st March 2012, Statement of Profit and
Loss for the year ended on that date and Cash Flow Statement for the
year ended on that date, both 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 the Auditing Standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on 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
("CARO") issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956 and
according to the information and explanation given to us during the
course of the audit and on the basis of such checks as we consider
appropriate, we enclose in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order, to the extent
applicable.
4. Further to our comments in the Annexure referred to above, we
report that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
ii. In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii. The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
accounts;
iv. In our opinion, the Balance Sheet, Statement of Profit and Loss
and Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956;
v. On the basis of written representations received from the directors
as on 31st March 2012 and taken on record by the Board of Directors, we
report that none of the directors are disqualified as on 31st March
2012 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956;
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2012;
b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITOR'S REPORT
Referred to in paragraph (3) of our Report of even date on the accounts
of SUNFLAG IRON AND STEEL COMPANY LIMITED for the financial year ended
31st March 2012
i. a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) A major proportion of the assets have been physically verified by
the management in accordance with a phased programme of verification
adopted by the Company. In our opinion, the frequency of verification
is reasonable, having regard to the size of the Company and the nature
of its assets. As informed to us, no material discrepancy has been
noticed on such verification.
c) According to the information and explanations given to us, the
Company has not disposed off substantial part of its fixed assets
during the year.
ii. a) We are informed that during the year, the management has
physically verified the inventories. In case of material lying with
third parties, certificates confirming stock have been received in
respect of a substantial portion of stock held. In our opinion, the
frequency of verification is reasonable.
b) According to the information and explanations given to us, the
procedure of physical verification of inventories followed by the
management is reasonable and adequate in relation to the size of the
Company and the nature of its business.
c) According to the information and explanations given to us, the
Company has maintained proper records of inventories. Discrepancies
noticed on verification between physical stocks and the book records
were not material.
iii. a) According to the information and explanations given to us, the
Company has, during the year, granted loans and advances to the
Companies covered in the register maintained under Section 301 of the
Companies Act 1956, as per details hereunder :
Amount in Rs.
Nature of
Loans and During Maximum / Year
Name of Company Advances the Year end Balance
Sunflag Power
Limited Interest free
Unsecured Loan
(transferred
(Subsidiary
Company) to Advance Share
Application Money) 7,349,386 91,528,292
KhappaCoal
Company Private
Limited Interest free
Unsecured Loan 4,112,550 73,709,550
(Subsidiary /
Joint Venture
Company)
Gujarat State
Mining and
Resources
Corpn. Ltd.
(Joint Venture
Company) Interest free
Unsecured Loan 100,000 246,820
b) There is no stipulation for the repayment of Principal and the
Interest.
c) According to the information and explanations given to us, the
Company has, during the year, 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.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with size of the Company and the nature of its business
with regards to the purchase of inventory, fixed assets and sale of
goods. During the course of our audit, we have not observed any
continuing failure to correct major weakness in internal control.
v. According to the information and explanation given to us, during
the year, there were no transactions that need to be entered into the
register maintained under Section 301 of the Companies Act, 1956.
vi. According to the information and explanations given to us, the
Company has not accepted any deposits from the public during the year;
hence paragraph 4 (vi) of the Order is not applicable.
vii. In our opinion, the Company has an internal audit division, which
is commensurate with size and the nature of its business.
viii. We have broadly reviewed the records maintained by the Company
pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 209 (1) (d) of the Companies
Act, 1956 and we are of the opinion that, prima facie, the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of the records.
ix. a) According to the information and explanations given to us and
the records of the Company examined by us, the Company has been
generally depositing undisputed statutory dues including Provident
Fund, Employees' State Insurance dues, Income Tax, Investor Education
and Protection Fund, Sales Tax, Wealth Tax, Customs Duty, Service Tax,
Excise Duty, Cess and other statutory dues applicable to it with the
appropriate authorities.
b) We are informed that there are no undisputed statutory dues as at
the year end, outstanding for a period of more than six months from the
date they became payable.
c) According to the records of the Company, the details of disputed
dues of Income Tax, Sales Tax and Excise Duty & Cess are enclosed in
Annexure A.
x. The Company does not have accumulated losses at the end of the
financial year 31st March 2012. Further, the Company has not incurred
cash losses during the financial year ended 31st March 2012 and in the
immediately preceding financial year ended 31st March 2011.
xi. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
banks.
xii. According to information and explanations given to us, the Company
has not granted any loans and advances on the basis of security by way
of pledge of shares, debentures and other securities.
xiii. The Company is not a Chit Fund / Nidhi / Mutual Benefit Fund /
Society to which the provisions of special statute relating to Chit
Fund are applicable.
xiv. As the Company is not dealing or trading in shares, securities,
debentures and other investments, paragraph 4(xiv) of the Order is not
applicable.
xv. According to the information and explanations given to us, the
Company has not given any guarantee during the year for loans taken by
others from banks or financial institutions.
xvi. In our opinion, the term loans have been applied for the purpose
for which they were raised.
xvii. According to the information and explanations given to us and on
an overall examination the Balance Sheet of the Company, we report that
during the year short-term funds have not been used to finance
long-term investments.
xviii. The Company has not made preferential allotment of shares
during the year.
xix. The Company has not issued debentures during the year.
xx. The Company has not raised money by way public issue during the
year.
xxi. On the basis of our examination and according to the information
and explanation given to us, no material fraud on or by the Company has
been noticed or reported.
Annexure - A
Statement of disputed statutory dues and annexure to report as at 31st
March 2012
Particulars of Amount Period to
which the Forum where Whether
Statutory Dues (Rs. in
Lacs) amount
related dispute is
pending paid or
unpaid
Excise Duty
Deptt.'s
show cause 55 2008 - 2009 Commissioner,
Central Excise
29 2009 - 2010 Commissioner,
Central Excise Not
Departmental
appeal* 2 1994 - 1996 Tax Appellate
Tribunal Deposited
Deptt.'s show
cause 14 1994 - 1995 Commissioner
of Customs
Total 100
Sales Tax 2005 - 2006 High Court
(Although the
Company has Deposi
tied
Company's
appeal 2,659 to filed writ
petition but
has paid this
amount Under
protest
2009 - 2010 under protest)
Total 2,659
Income Tax
Company's
appeals 592 2005 - 2006 Commissioner of
Income Tax
(Appeal) Deposited
134 2006 - 2007 Commissioner of
Income Tax
(Appeal) Deposited
55 2006 - 2007 Commissioner of
Income Tax
(Appeal) Deposited
309 2007 - 2008 Commissioner of
Income Tax
(Appeal) Deposited
235 2008 - 2009 Commissioner of
Income Tax
(Appeal) Deposited
Total 1,325
* Pertains to MODVAT Credit
For PATEL, SHAH & JOSHI
CHARTERED ACCOUNTANTS
Firm Regn. No. 107768W
CA JAYANT I. MEHTA
Nagpur PARTNER
29th May 2012 Membership Number - 42630
Mar 31, 2011
1. We have audited the attached Balance Sheet of SUNFLAG IRON AND
STEEL COMPANY LIMITED as at 31st March 2011, Profit and Loss Account
for the year ended on that date and Cash Flow Statement for the year
ended on that date, both 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 the Auditing Standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on 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
("CARO") issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, and
according to the information and explanation given to us during the
course of the audit and on the basis of such checks as we consider
appropriate, we enclose in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order, to the extent
applicable.
4. Further to our comments in the Annexure referred to above, we
report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appears from our examination of
those books;
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
accounts;
(iv) In our opinion, the Balance Sheet, Profit and Loss Account and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956;
(v) On the basis of written representations received from the
directors, as on 31st March 2011 and taken on record by the Board of
Directors, we report that none of the directors are disqualified as on
31st March 2011 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the State of affairs of the
Company as at 31st March 2011;
(b) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for
the year ended on that date.
ANNEXURE TO THE AUDITOR'S REPORT
Referred to in paragraph (3) of our Report of even date on the accounts
of SUNFLAG IRON AND STEEL COMPANY LIMITED for the year ended 31st March
2011
i. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) A major proportion of the assets have been physically verified by
the management in accordance with a phased programme of verification
adopted by the Company. In our opinion, the frequency of verification
is reasonable, having regard to the size of the Company and the nature
of its assets. As informed to us, no material discrepancy has been
noticed on such verification.
(c) According to the information and explanations given to us, the
Company has not disposed off substantial part of its fixed assets
during the year.
ii. (a) We are informed that during the year the management has
physically verified the inventories. In case of material lying with
third parties, certificates confirming stock have been received in
respect of a substantial portion of stock held. In our opinion, the
frequency of verification is reasonable.
(b) According to the information and explanations given to us, the
procedure of physical verification of inventories followed by the
management is reasonable and adequate in relation to the size of the
Company and the nature of its business.
(c) According to the information and explanations given to us, the
Company has maintained proper records of inventories. Discrepancies
noticed on verification between physical stocks and the book records
were not material.
iii. (a) According to the information and explanations given to us, the
Company has, during the year, granted loans and advances to the
companies covered in the register maintained under Section 301 of the
companies Act 1956, as per details hereunder :
Amount in Rs.
Name of Nature of
Company Loans & During the Year Maximum / Year
Advances end Balance
Sunflag Power Interest free
Limited (Subsidiary unsecured
Company) loan 4,707,986 84,178,906
Khappa Coal Company Interest free
Private Limited unsecured
(Subsidiary / loan Nil 69,597,000
Joint Venture
Company)
Gujarat State Interest free
Mining and unsecured
Resources loan 146,820 146,820
Corporation
Limited (Joint
Venture Company)
(b) There is no stipulation for the repayment of Principal and the
Interest.
(c) According to the information and explanations given to us, the
Company has, during the year, 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.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with size of the Company and the nature of its business
with regards to the purchase of inventory, fixed assets and sale of
goods. During the course of our audit, we have not observed any
continuing failure to correct major weakness in internal control.
v. According to the information and explanation given to us, during the
year, there were no transactions that need to be entered into the
register maintained under Section 301 of the Companies Act, 1956.
vi.According to the information and explanations given to us, the
Company has not accepted any deposits from the public during the year;
hence paragraph 4 (vi) of the Order is not applicable.
vii. In our opinion, the Company has an internal audit division, which
is commensurate with size and the nature of its business.
viii. We have broadly reviewed the records maintained by the Company
pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 209 (1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of the records.
ix. (a) According to the information and explanations given to us and
the records of the Company examined by us, the Company has been
generally depositing undisputed statutory dues including Provident
Fund, Employeesà State Insurance dues, Income Tax, Investor Education
and Protection Fund, Sales Tax, Wealth Tax, Customs Duty, Service Tax,
Excise Duty, Cess and other statutory dues applicable to it with the
appropriate authorities.
(b) We are informed that there are no undisputed statutory dues as at
the year end, outstanding for a period of more than six months from the
date they became payable.
(c) According to the records of the company, the details of disputed
dues of Income Tax, Sales Tax and Excise duty & Cess are enclosed in
Annexure A.
x. The Company does not have accumulated losses at the end of the
financial year 31st March 2011. Further, the Company has not incurred
cash losses during the financial year ended 31st March 2011 and in the
immediately preceding financial year ended 31st March 2010.
xi. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
financial institutions and banks.
xii. According to information and explanations given to us, the Company
has not granted any loans and advances on the basis of security by way
of pledge of shares, debentures and other securities.
xiii. The Company is not a Chit Fund / Nidhi / Mutual Benefit Fund /
Society to which the provisions of special statute relating to Chit
Fund are applicable.
xiv. As the Company is not dealing or trading in shares, securities,
debentures and other investments, paragraph 4(xiv) of the Order is not
applicable.
xv. According to the information and explanations given to us, the
Company has not given any guarantee during the year for loans taken by
others from banks or financial institutions.
xvi. In our opinion, the term loans have been applied for the purpose
for which they were raised.
xvii. According to the information and explanations given to us and on
an overall examination the Balance Sheet of the Company, we report that
during the year short-term funds have not been used to finance
long-term investments.
xviii. The Company has not made preferential allotment of shares during
the year.
xix. The Company has not issued debentures during the year.
xx. The Company has not raised money by public issue during the year.
xxi. On the basis of our examination and according to the information
and explanation given to us, no material fraud on or by the Company has
been noticed or reported.
For PATEL, SHAH & JOSHI
CHARTERED ACCOUNTANTS
Firm Regn. No. 107768W
CA JAYANT I. MEHTA
PARTNER
Membership Number - 42630
Nagpur
27th May 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of SUNFLAG IRON AND
STEEL COMPANY LIMITED as at 31st March 2010, the Profit and Loss
account for the year ended on that date and the Cash Flow Statement for
the year ended on that date both annexed thereto. These financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
2. We conducted our audit in accordance with the Auditing Standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on 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 (Auditors Report) Order, 2003
("CARO") issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, and
according to the information and explanation given to us during the
course of the audit and on the basis of such checks as we consider
appropriate, we enclose in the Annexure, a statement on the matters
specified in paragraphs 4 and 5 of the said Order, to the extent
applicable.
4. Further to our comments in the Annexure referred to above, we
report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief, were necessary for the purposes of
our audit;
(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(iii) The Balance Sheet, the Profit and Loss account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the Balance Sheet, the Profit and Loss account and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956;
(v) On the basis of written representations received from the directors
as on 31st March 2010 and taken on record by the Board of Directors, we
report that none of the directors are disqualified as on 31st March
2010 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance sheet, of the state of affairs of the
Company as at 31st March 2010;
(b) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
Referred to in paragraph (3) of our Report of even date on the accounts
of SUNFLAG IRON AND STEEL COMPANY LIMITED for the year ended 31st March
2010
i. (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) A major proportion of the assets have been physically verified by
the management in accordance with a phased programme of verification
adopted by the Company. In our opinion, the frequency of verification
is reasonable, having regard to the size of the Company and the nature
of its assets. As informed to us, no material discrepancy has been
noticed on such verification.
(c) During the year Company has not disposed of any substantial part of
fixed asset which affect going concern assumption.
ii. (a) We are informed that during the year the management has
physically verified the inventories. In case of material lying with
third parties, certificates confirming stock have been received in
respect of a substantial portion of stock held. In our opinion, the
frequency of verification is reasonable.
(b) According to the information and explanations given to us, the
procedures of physical verification of inventories followed by the
management is reasonable and adequate in relation to the size of the
Company and the nature of its business.
(c) According to the information and explanations given to us the
Company has maintained proper records of inventories. Discrepancies
noticed on verification between physical stocks and the book records
were not material.
iii. (a) According to the information and explanations given to us, the
Company has, during the year, granted a further unsecured loan to its
subsidiary Khapa Coal Company Private Limited of Rs. 6,95,97,000/-
covered in the register maintained under Section 301 of the Companies
Act, 1956.
(i) The maximum amount involved during the year and the year-end
balance of such loan was Rs. 6,95,97,000/-
(ii) There is no stipulation as to the rate of interest, repayment or
other terms and conditions of the loan given by the Company to its
subsidiary company. Hence we cannot express our opinion as to the
regularity of payment of the principal amount/interest is regular nor
can the loan be said to be overdue.
(b) According to the information and explanations given to us the
Company has, during the year, 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, paragraphs 4 (iii) (e), (f) and (g) of the Order are not
applicable.
iv. In our opinion, and according to the information and explanations
given to us, having regards to the explanations that some of the items
purchased are of a special nature and suitable alternative sources do
not exist for obtaining comparable quotations, there are adequate
internal control procedures commensurate with size of the Company and
the nature of its business with regards to the purchase of inventory,
fixed assets and with regards to the sale of goods. During the course
of our audit, we have not observed any continuing failure to correct
major weakness in internal control.
v. (a) To the best of our knowledge and belief and 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 having regards to our comment in paragraph (iv)
above and according to the information and explanations 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
and exceeding the value of Rupees five lacs in respect of any party
during the year have been made at prices which are reasonable, having
regard to the prevailing market price at the relevant time where such
market prices are available.
vi. The Company has not accepted any deposit from the Public.
vii. In our opinion, the Company has an internal audit department,
which is commensurate with size and the nature of its business.
viii. We have broadly reviewed the records maintained by the Company
pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 209 (1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of the records with a view to
determining whether they are accurate or complete.
ix. (a) According to the information and explanations given to us and
the records of the Company examined by us, the Company has been regular
in depositing undisputed statutory dues including Provident Fund,
Employees State Insurance dues, Income Tax, Investor Education and
Protection Fund, Sales Tax, Wealth Tax, Customs Duty, Service Tax,
Excise Duty, Cess and other material statutory dues applicable to it
with the appropriate authorities. We are informed that there are no
undisputed statutory dues as at the year end outstanding for a period
of more than six months from the date they became payable.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no disputed dues of
Income Tax, Service Tax, Wealth Tax and Cess, which have not been
deposited.
(c) The amount of disputed dues as at 31st March 2010 in respect of
Sales Tax and Excise Duty aggregated to Rs. 280.33 lacs and Rs. 39.96
lacs respectively and these amounts have not been deposited by the
Company, since these matters are pending with the respective
Authorities as per Annexure A.
x. The Company does not have any 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.
xi. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
financial institutions and banks.
xii. According to information and explanations given to us and based on
the documents and records produced to us, the Company has not granted
any loans and advances on the basis of security by way of pledge of
shares, debentures and other securities, accordingly paragraph 4 (xii)
of the Order is not applicable.
xiii. In our opinion and according to the information and explanation
given to us, the Company is not a Chit Fund/ Nidhi/ Mutual Benefit
Fund/ Society to which the provision of special statute relating to
Chit Fund is applicable. Accordingly, paragraph 4 (xiii) of the Order
is not applicable.
xiv. As the Company is not dealing or trading in shares, securities,
debentures and other investments, paragraph 4(xiv) of the Order is not
applicable.
xv. According to the information and explanations given to us, the
company has given corporate guarantee during the year to Messrs Khappa
Coal Company Private Limited for Bank guarantee. No guarantee given for
any loan taken by others from banks or financial institutions.
xvi. In our opinion, the term loans have been applied for the purpose
for which they were raised.
xvii. According to the information and explanations given to us and on
an overall examination the Balance sheet of the Company, we report that
during the year short-term funds have not been used to finance
long-term investments and vise-versa.
xviii. 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 during the year.
xix. The Company has not issued any debentures during the year.
xx. The Company has not raised any money by way public issue during the
year.
xxi. On the basis of our examination and according to the information
and explanation given to us, no fraud, on or by the Company, has been
noticed or reported during the course of our audit.
Annexure - A
Statement of unpaid disputed statutory dues and annexure to report as
at 31st March 2010
Period to
which the
Amount
Particulars amount related
(various
(Rs. in
000)
years covering
the period)
A. Excise Duty
Deptt.s show
causes Excise duty 29,217 2000 - 2003
Excise duty 5,531 2008 - 2009
Excise duty 2,903 2009 - 2010
Departmental appeals Excise duty
(Modvat Credit) 187 1994 - 1996
Deptt.s show cause Excise duty
(Modvat Credit) 707 2008 - 2009
Deptt.s show cause Excise duty 1,418 1994 - 1995
39,963
B. Sales Tax
Companys appeals Sales tax 280,336
280,336
Particulars Forum where dispulte is pending
A. Excise Duty Commissioner, Central Excise
Deptts show Causes Commissioner, Central Excise
Commissioner, Central Excise
Departmental appeals Tax Appellate Tribunal
Deptts show cause Tax Appellate Tribunal
Deptts show caise Commissioner of Customs
B. Sales Tax
Companys appeals High Court
For PATEL, SHAH & JOSHI
CHARTERED ACCOUNTANTS
CA JAYANT I. MEHTA
Mumbai PARTNER
31st May 2010 Membership Number - 42630