Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of M/S Uttam Value Steels limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement, and the Statement of Changes in Equity for the year then ended, and a summary of 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 and presentation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), and cash flows, and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015. 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 an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the Standalone Ind AS financial statements 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, on a test basis, about the amounts and 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 accounting policies used and the reasonableness of the accounting estimates made by the Companyâs management, 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 Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS:
(a) in the case of the Balance Sheet, of the state of affairs (financial position) of the Company as at March 31, 2018;
(b) in the case of the Statement of Profit and Loss, of the loss (financial performance including other comprehensive income) for the year ended on that date;
(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date; and
(d) in the case of the Statement of Changes in Equity, of the changes in equity for the year ended on that date.
Emphasis of Matters
The Company has defaulted in repayment of loans and interest thereon. The lenders have referred the matter to National Company Law Tribunal (NCLT) for resolution of debt but the said petition has not been admitted till date. The financials have been prepared on the assumption of going concern as the management is of the opinion that the Company will remain in business in the foreseeable future.
Our opinion is not modified in respect of these matters.
Other Matters
The standalone financial statements of the Company for the year ended March 31, 2018 have been prepared under the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015. The comparative figures have also been reinstated in accordance with the Ind AS. A reconciliation statement, which reconciles the figures of the comparatives from erstwhile Accounting Standard to Ind AS has been prepared and presented as a part of the Standalone Ind AS financial statement.
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 Companies Act 2013, we give in the âAnnexure Aâ, a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act, we 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 Company has no branch office and hence the company is not required to conduct audit under section 143 (8) of the Act;
d) The Balance Sheet, the Statement of Profit and Loss(including Other Comprehensive Income), the Cash flow statement, and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
e) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with the Companies (Accounts) Rules, 2014;
f) On the basis of the written representations received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 from being appointed as a director in terms of Section 164 (2) of the Act;
g) 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
h) 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 as per the Notes to the Financial Statement.
ii. The Company has not entered into any long-term contracts including derivative contracts hence this clause is not applicable.
iii. During the year, no amounts were required to be transferred to the Investor Education and Protection Fund by the Company. The question of delay in transferring such sums does not arise.
Annexure - A to Independent Auditorâs Report
The âAnnexure Aâ referred to in Independent Auditorâs Report to the Members of the Company on the Financial Statements for the year ended 31st March 2018, we report that:
(i) (a) According to the information and explanation given to us and based on the records produced before us, we are of the opinion that the Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.
(b) According to the information and explanation given to us, fixed assets were physically verified by the management according to a designed to cover all the locations which in our opinion, is reasonable having regard to the size of the company and the nature of its assets.
(c) According to the information and explanation given to us and based on the records produced before us, the title deeds of immovable properties are held in the name of the company.
(ii) According to the information and explanation given to us inventory has been physically verified by the management during the year. No material discrepancies were noticed that would have an impact over the Financial Statements.
(iii) According to the information and explanation given to us, the Company has not granted during the year any unsecured loans. Hence this clause is not applicable to the Company.
(iv) According to the information and explanation given to us, we are of the opinion that in respect of loans, investments, guarantees, and security, provisions of section 185 and 186 of the Companies Act, 2013 have been complied with.
(v) According to the information and explanation given to us, the company has not accepted any deposits within the meaning of Section 73 to 76 of the Act and the rules framed there under.
(vi) According to the information and explanation given to us, the Company has maintained cost records as specified by the Central Government under sub-section (1) of section 148 of the Act
(vii) (a)According to the books and records as produced and audited by us in accordance with generally accepted auditing practices in India and also Management representations, undisputed statutory dues in respect of Provident fund, Employeesâ State Insurance, Income Tax, Sales Tax, Wealth tax, Service tax, Custom duty, Excise duty, Value Added Tax, Cess and other statutory dues, if any, applicable to it, has been regularly deposited with the appropriate authorities.
(b)According to the information and explanation given to us and the record produced before us, the disputed amount payable in case of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax or cess is as per âAnnexure Iâ attached.
(viii) According to the information and explanation given to us and based on the records before us, the company has defaulted in repayment of dues to financial institutions and banks as per âAnnexure IIâ attached.
(ix) According to the information and explanation given to us and the record produced before us, the company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or by way of any term loan during the year.
(x) During the course of our examination of the books of account carried in accordance with the generally accepted auditing standards in India, we have neither come across any instance of fraud on or by the Company by its officers or employees, either noticed or reported during the year, nor have we been informed of such case by the Management.
(xi) According to the information and explanation given to us and the record produced before us, managerial remuneration has been paid during the year as per the provisions of section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company as specified in the Nidhi Rules, 2014. Hence the provision of this clause is not applicable to the company.
(xiii) According to the information and explanation given to us and the record produced before us, all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Standalone Financial Statements etc., as required by the applicable Indian Accounting Standards.
(xiv) According to the information and explanation given to us and the record produced before us, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Hence the provision of this clause is not applicable to the company.
(xv) As per the information and explanation given to us and the record produced before us, the company has not entered into any non-cash transactions with directors or persons connected with him.
(xvi) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
Annexure - B to the Independent Auditorsâ Report
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 Uttam Value Steels Limited (âthe Companyâ) as of 31 March 2018 in conjunction with our audit of the 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 (âICAIâ). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs 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 Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) 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 financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For M/s VSS & Associates
Chartered Accountants
ICAI Firm Reg no:105787W
Sanjay Jain
Dated : 6th April,2018 Partner
Place: Mumbai M. No. : 046565
Mar 31, 2017
TO THE MEMBERS OF M/S UTTAM VALUE STEELS LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of M/S Uttam Value Steels Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2017, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 1 34(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone 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 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 standalone financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence, on a test basis, about the amounts and disclosures in the standalone financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone 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 management, as well as evaluating the overall presentation of the standalone financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the 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:
(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2017;
(b) in the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2017 ("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 the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act, we 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 Company has no branch office and hence the company is not required to conduct audit under section 143 (8) of the Act;
d) 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;
e) 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;
f) On the basis of the written representations received from the directors as on 3I March 20I7 taken on record by the Board of Directors, none of the directors is disqualified as on 3 I March 20I7 from being appointed as a director in terms of Section I64 (2) of the Act;
g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in ''Annexure B"; and
h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule
II of the Companies (Audit and Auditors) Rules,
2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in the Financial Statement.
ii. The Company has not entered into any long-term contracts including derivative contracts hence this clause is not applicable.
iii. During the year, no amounts were required to be transferred to the Investor Education
and Protection Fund by the Company. The question of delay in transferring such sums does not arise.
iv. The Company has provided requisite disclosures in the standalone financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016. Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management.
Annexure - A to Independent Auditor''s Report
The Annexure A referred to in Independent Auditor''s Report to the Members of the Company on the Standalone Financial Statements for the year ended 3Ist March 20I7, we report that:
(i) (a) According to the information and explanation given to us and based on the records produced before us, we are of
the opinion that the Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.
(b) According to the information and explanation given to us, fixed assets are physically verified by the management according to a phased programme designed to cover all the locations which in our opinion, is reasonable having regard to the size of the company and the nature of its assets.
(c) According to the information and explanation given to us and based on the records produced before us, the title deeds of immovable properties are held in the name of the company
(ii) According to the information and explanation given to us Inventory has been physically verified by the management during the year. No material discrepancies were noticed that would have an impact over the standalone financial statements.
(iii) According to the information and explanation given to us, the Company has not granted any secured or unsecured loans to companies, firms, parties covered in the register maintained under Section I89 of the Act.
(iv) According to the information and explanation given to us, we are of the opinion that in respect of loans, investments, guarantees, and security, provisions of section I85 and I86 of the Companies Act, 20I3 have been complied with.
(v) According to the information and explanation given to us, the company has not accepted any deposits within the meaning of Section 73 to 76 of the Act and the rules framed there under.
(vi) According to the information and explanation given to us, the Company has maintained cost records as specified by the Central Government under sub-section (I) of section I48 of the Act.
(vii) (a) According to the books and records as produced and audited by us in accordance with generally accepted auditing
practices in India and also Management representations, undisputed statutory dues in respect of Provident fund, Employees'' State Insurance, Income Tax, Sales Tax, Service tax, Custom duty, Excise duty, Value Added Tax, Cess and other statutory dues has been regularly deposited with the appropriate authorities.
(b) According to the information and explanation given to us and the record produced before us, the disputed amounts payable in case of Income Tax, Excise Duty and Sales Tax is as per Annexure I'' attached.
(viii) According to the information and explanation given to us and based on the records produced before us, the company has defaulted in repayment of dues to banks. The details are as per ''Annexure II'' attached.
(ix) According to the information and explanation given to us and the record produced before us, the company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or by way of any term loan during the year.
(x) During the course of our examination of the books of account carried in accordance with the generally accepted auditing standards in India, we have neither come across any instance of fraud on or by the Company by its officers or employees, either noticed or reported during the year, nor have we been informed of such case by the Management.
(xi) According to the information and explanation given to us and the record produced before us, managerial remuneration has been paid during the year as per the provisions of section I97 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company as specified in the Nidhi Rules, 20I4. Accordingly, paragraph 3(xii) of the order is not applicable.
(xiii) According to the information and explanation given to us and the record produced before us, all transactions with the related parties are in compliance with sections I77 and I88 of Companies Act, 20I3 where applicable and the details have been disclosed in the standalone financial statements etc., as required by the applicable accounting standards.
(xiv) According to the information and explanation given to us and the record produced before us, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Hence the provision of this clause is not applicable to the company
(xv) As per the information and explanation given to us and the record produced before us, the company has not entered into any non-cash transactions with directors or persons connected with him.
(xvi) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, I934.
Annexure I
Name of the Statute |
Nature of Dues |
Amount ( Rs. in Lacs) |
Forum where dispute is pending |
The Central Excise Act, I944 |
Central Excise |
32.95 |
Assistant Commissioner |
Central Excise |
I,562.90 |
Commissioner |
|
Central Excise |
7.23 |
High Court |
|
Central Excise |
34.02 |
Supreme Court |
|
Income Tax Act, I96I |
Income Tax |
2I,546.00 |
CIT (A) |
Sales Tax |
Sales Tax |
532.87 |
High Court |
|
Sales Tax |
68.00 |
MSTT-Mumbai |
Annexure II
Name of Lenders |
Default in (Rs. in Crores) |
Default Since |
||||
Principal Repayment |
Interest |
LC Devolvement |
Principal Repayment |
Interest |
LC Devolvement |
|
IDBI Bank |
7.37 |
5.II |
- |
Mar-I6 |
Mar-I6 |
- |
State Bank of India |
2I.55 |
2I.80 |
I89.4I |
6 n- D |
6 n- D |
Mar-I6 |
Corporation Bank |
I0.78 |
I3.93 |
46.72 |
|an-I6 |
|an-I6 |
Apr-I6 |
Canara Bank |
II.60 |
28.77 |
I20.63 |
|an-I6 |
|an-I6 |
Mar-I6 |
Andhra Bank |
I2.82 |
2I.04 |
92.I5 |
Feb-I6 |
Feb-I6 |
Feb-I6 |
Bank of Baroda |
I3.65 |
I9.4I |
77.70 |
Mar-I6 |
Mar-I6 |
Mar-I6 |
Allahabad Bank |
7.47 |
II.7I |
78.37 |
Mar-I6 |
Mar-I6 |
6 n- D |
Punjab National Bank |
I.27 |
2I.00 |
I92.28 |
Mar-I6 |
Mar-I6 |
Mar-I6 |
Union Bank of India |
I.43 |
I9.82 |
I02.27 |
|an-I6 |
|an-I6 |
Mar-I6 |
Vijaya Bank |
0.40 |
5.47 |
30.00 |
Apr-I6 |
Apr-I6 |
Mar-I6 |
Indian Overseas Bank |
0.99 |
I7.I0 |
I2I.88 |
Mar-I6 |
Mar-I6 |
Apr-I6 |
Oriental Bank of Commerce |
0.52 |
I2.I7 |
76.75 |
Mar-I6 |
Mar-I6 |
Feb-I6 |
Total |
89.85 |
197.35 |
1,128.16 |
|
|
|
Annexure - B to the Independent Auditors'' Report
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 Uttam Value Steels Limited ("the Company") as of 31 March 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained 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 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 Todarwal & Todarwal
ICAI Firm Registration.
No. III009W Chartered Accountants
Sunil Todarwal
Partner
M. No. : 032512
Place: Mumbai
Dated 29th April 2017
Mar 31, 2015
We have audited the accompanying standalone financial statements of
Uttam Value Steels Limited ("the Company"), which comprise the Balance
Sheet as at March 31,2015, and the Statement of Profit and Loss and
Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's 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 and presentation of these standalone financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing 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, on a
test basis, about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor's judgment,
including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal financial control
system 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 whether the Company has in place an adequate
internal financial controls system over financial reporting and the
operating effectiveness of such controls. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by the Company's
Directors, as well as evaluating the overall presentation of the
financial statements.
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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2015;
(b) in the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ('the
Order') issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in the paragraph 3 and 4 of the
Order, to the extent applicable.
2. As required by section 143 (3) of the Act, we report that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books [and proper returns adequate for the purposes of our audit have
been received from branches not visited by us];
c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d) In our opinion, the aforesaid 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 written representations received from the directors
as on March 31, 2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31,2015, from being
appointed as a director in terms of Section 164 (2) of the Companies
Act, 2013; 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 Note Number 22
ii. The Company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses, if any,
on long-term contracts including derivative contracts - Refer Note
Number 25;
iii. The Company has not declared any dividends and hence clause iii
of the said rule is not applicable
ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT
[Referred to in above of the Independent Auditor's Report of even date
to the Members of Uttam Value Steels Limited on the standalone
Financial Statements for the year ended 31st March 2015]
1. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation
of fixed assets.
(b) As per the information and explanation given to us, the fixed
assets are physically verified by the management according to a phased
program designed to cover all the locations which in our opinion, is
reasonable having regard to the size of the company and the nature of
its assets. Pursuant to the program, the management during the year
physically verified the fixed assets at certain locations and no
material discrepancies were noticed on such verification.
2. (a) Inventory has been physically verified by the management during
the year. In our opinion, the frequency of verification
is reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) In our opinion and according to the information & explanations
given to us, the Company is maintaining proper records of inventory.
The discrepancies noticed on verification between the physical stocks
and the book records were not material.
3. According to information and explanation given to us, the Company
has not granted nor has taken any loans, secured or unsecured loans to
companies, firms or other parties covered in the register maintained
under Section 189 of the Act.
In view of the above, provisions of paragraph 3, clause (iii)
sub-clause (a) and (b) of the Order are not applicable to the company.
4. In our opinion and according to information and explanation given
to us, there are adequate internal control procedures commensurate with
the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services.Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across, nor have been
informed of, any continuing failure to correct major weaknesses in the
aforesaid internal control system.
5. According to the information and explanation given to us, the
company has not accepted any deposits from the public within the
meaning of Section 73 and 74 of the Act and the rules framed there
under. Hence the provisions of paragraph 3 clause 5 of the Order are
not applicable to the company.
6. We have broadly reviewed the books of accounts maintained by the
company, where, pursuant to the rules made by the Central Government of
India, the maintenance of Cost Records have been prescribed
undersub-section 1 of section 148 of the Act, and are of the opinion
that, prima facie, the prescribed accounts and records have been
maintained. We have not, however, made a detailed examination of the
records with a view to determine whether they are accurate or complete.
7. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is regular in depositing undisputed statutory dues, including provident
fund, employees' state insurance, income tax, sales tax, wealth tax,
service tax, duty of customs, duty of excise, value added tax, and
other material statutory dues, as applicable, with the appropriate
authorities.
(b) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of
excise duty and income tax as at 31stMarch 2015 which have not been
deposited on account of a dispute, are as follows:
Name of Nature of dues Amount Forum where
the Statute (Rs. in lacs) dispute is
pending
The Central
Excise Act,
1944 Central Excise 38.94 Additional
Commissioner
Central Excise 32.95 Assistant
Commissioner
Central Excise 171.93 Commissioner
Central Excise 6.57 High Court
Central Excise 34.02 Supreme Court
Income Tax
Act, 1961 Income Tax 21,546.00 CIT(A)
8. The Company's accumulated losses at the end of the current year are
more than fifty percent of its net worth. The Company has not incurred
cash losses during the year and also not incurred cash losses in the
immediately preceding period.
9. In our opinion and according to the information and explanation
given to us and the books of accounts verified by us, the company has
not defaulted in repayment of dues to a financial institution or bank
as at the balance sheet date.
10. In our opinion and according to the information and the
explanations given to us, the Company has given guarantee for loans
taken by others from banks or financial institutions, the terms and
conditions whereof are not prejudicial to the interest on the Company.
11. In our opinion and according to the information and explanation
given to us, the term loans have been applied by the company during the
year for the purposes for which they were obtained.
12.During the course of our examination of the books of account carried
in accordance with the generally accepted auditing standards in India,
we have neither come across any instance of fraud on or by the Company,
noticed or reported during the year, nor have we been informed of such
case by the Management.
For Todarwal & Todarwal
Chartered Accountants
ICAI RegNo : 111009W
Sunil Todarwal
Partner
M. No. : 32512
Dated :29th May, 2015
Place : Mumbai
Mar 31, 2014
We have audited the accompanying financial statements of Uttam Value
Steels Limited ("the Company") (previously known as Lloyds Steel
Industries Limited), which comprise the Balance Sheet as at March
31,2014, and the Statement of Profit and Loss and Cash Flow Statement
for the year then ended, and a summary of significant accounting
policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards notified under Sub-Section 3(c) of Section 211
of the Companies Act, 1956 ("the Act") read with the General Circular
15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs
in respect of section 133 of the Companies Act 2013. This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence, on a
test basis, about the amounts and
disclosures in the financial statements. The procedures selected depend
on the auditor''s judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud
or error. In making those risk assessments, the auditor considers
internal control relevant to the Company''s preparation and fair
presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
(b) in the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books [and proper returns adequate for the purposes of our audit have
been received from branches not visited by us];
c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards notified under
Sub-Section 3(c) of Section 211 of the Companies Act, 1956 read with
the General Circular 15/2013 dated 13th September 2013 of the Ministry
of Corporate Affairs in respect of section 133 of the Companies Act
2013;
e) On the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
[Referred to in above the Auditor''s Report of even date to the Members
of Uttam Value Steels Limited on the Financial Statements for the year
ended 31st March 2014]
1. (a) The Company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As per the information and explanation given to us, fixed assets
are physically verified by the management according to a phased
programme designed to cover all the locations which in our opinion, is
reasonable having regard to the size of the company and the nature of
its assets. Pursuant to the programme, the management during the year
physically verified the fixed assets at certain locations and no
material discrepancies were noticed on such verification.
(c) According to the information and explanation given to us, the
company has not disposed off any significant part of the fixed assets
during the year. Thus, paragraph 4(i) (c) of the Order is not
applicable.
2. (a) Inventory has been physically verified by the management during
the year. In our opinion, the frequency of verification is reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) In our opinion and according to the information & explanations
given to us, the Company is maintaining proper records of inventory.
The discrepancies noticed on verification between the physical stocks
and the book records were not material.
3. According to information and explanation given to us, the Company
has not granted nor has taken any loans, secured or unsecured loans to
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.
In view of the above, provisions of clause 4 (iii) (a) to (e) of the
Order are not applicable to the company.
4. In our opinion and according to information and explanation given
to us, there are adequate internal control procedures commensurate with
the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods.
5. (a) On the basis of our examination of the books of account, we are
of the opinion that the transactions that need to be entered in the
register in pursuance of Section 301 of the Act have been entered in
the said register.
(b) In our opinion, and according to the information & explanation
given to us, the transactions made during the year with parties covered
under Section 301 of the Act have been at prices which are reasonable,
having regard to the prevailing market price for such goods and
materials or prices at which transaction for similar goods or material
have been made with other parties.
6. According to the information and explanation given to us, the
company has not accepted any deposits from the public within the
meaning of Section 58A and 58AA of the Act and the rules framed there
under. Hence the provisions of clause 4(vi) are not applicable to the
company.
7. In our opinion and according to information and explanation given
to us, the Company''s present internal audit system is commensurate with
its size and the nature of its business.
8. We have reviewed the books of accounts maintained by the company in
respect of Steel division, where, pursuant to the rules made by the
Central Government, the maintenance of Cost Records have been
prescribed under section 209(1) (d) of the Companies Act, 1956. We are
of the view that prima facie the prescribed accounts and records have
been maintained. We have not, however, made a detailed examination of
the records with a view to determine whether they are accurate or
complete.
9. (a) According to the books and records as produced and examined by
us in accordance with generally accepted auditing practices in India
and also Management representations, undisputed statutory dues in
respect of Provident fund, Profession Tax, Income Tax, Sales Tax, Value
added Tax, Wealth Tax, Service Tax, Custom duty, Excise duty, Cess and
other material statutory dues, if any, applicable to it, has been
regularly deposited with the appropriate authorities.
10. The Company''s accumulated losses at the end of the current year
are more than fifty percent of its net worth. The Company has not
incurred cash losses during the year and also not incurred cash losses
in the immediately preceding year.
11. In our opinion and according to the information and explanation
given to us and the books of accounts verified by us, the company has
not defaulted in repayment of dues to a financial institution or bank.
12. According to information and explanation given to us, the Company
has not granted any loans or advances on the basis of security by way
of pledge of shares, debentures and other securities during the year.
13. In our opinion, considering the nature of activities carried on by
the Company during the year, the provisions of any special statute
applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not
applicable to it. Hence the provisions of clause 4(xiii) of the Order
is not applicable to the company.
14. According to the information and explanations given to us, the
Company is not a dealer or trader in shares, securities, debentures and
other investments. Hence clause 4(xiv) of the Order is not applicable
to the company.
15. According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from a bank, the
terms and conditions whereof in our opinion are not prejudicial to the
interest of the company.
16. In our opinion and according to the information and explanation
given to us, the term loans have been applied by the company during the
year for the purposes for which they were obtained.
17. On the basis of overall examination of the Balance Sheet of the
Company and according to information and explanations given to us,
there are no funds raised on short-term basis, which have been used for
long-term investments.
18. According to information and explanation given to us, the Company
has not during the year, made preferential allotment of shares to the
party covered in the register maintained under section 301. Hence the
provision of clause 4(xviii) of the Order is not applicable to the
company.
19. According to information and explanation given to us, the company
has not issued any fresh debenture during the year. Hence the
provisions of clause 4(xix) of the Order is not applicable to the
company.
20. According to information and explanation given to us, the Company
has not raised any money by public issue during the year. Hence the
provisions of clause 4(xx) of the Order is not applicable to the
company.
21. During the course of our examination of the books of account
carried in accordance with the generally accepted auditing standards in
India, we have neither come across any instance of fraud on or by the
Company noticed or reported during the year, nor have we been informed
of such case by the Management.
For and on behalf of
Todarwal & Todarwal
Chartered Accountants
ICAI Reg No : 111009W
Sunil Todarwal
Dated : 30th May, 2014 Partner
Place: Mumbai M. No. : 32512
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Uttam Value
Steels Limited ("the Company") (previously known as Lloyds Steel
Industries Limited), which comprise the Balance Sheet as at March
3I,20I3, and the Statement of Profit and Loss and Cash Flow Statement
for the year then ended, and a summary of significant accounting
policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of Section 2II
of the Companies Act, I956 ("the Act"). This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence, on a
test basis, about the amounts and 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 control relevant to
the Company''s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in
the circumstances. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 3I, 20I3;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
sub-section (3C) of Section 2II of the Companies Act, I956;
e) On the basis of written representations received from the directors
as on March 3I, 20I3, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 3I, 20I3, from being
appointed as a director in terms of clause (g) of sub-section (I) of
Section 274 of the Companies Act, I956.
ANNEXURE TO AUDITORS'' REPORT
[Referred to the Auditor''s Report of even date to the Members of
Uttam Value Steels Limited on the Financial Statements for the year
ended 31st March 2013]
1 (a) The Company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As per the information and explanation given to us, fixed assets
are physically verified by the management according to a phased
programme designed to cover all the locations which in our opinion, is
reasonable having regard to the size of the company and the nature of
its assets. Pursuant to the programme, the management during the year
physically verified the fixed assets at certain locations and no
material discrepancies were noticed on such verification.
(c) According to the information and explanation given to us, the
company has not disposed off any significant part of the fixed assets
during the year. Thus, paragraph 4(i)(c) of the Companies (Auditor''s
Report) Order, 2003 is not applicable.
2. (a) Inventory has been physically verified by the management during
the year. In our opinion, the frequency of verification is reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) In our opinion and according to the information & explanations
given to us, the Company is maintaining proper records of inventory.
The discrepancies noticed on verification between the physical stocks
and the book records were not material.
3. (a) According to information and explanation given to us, the
Company has not granted any loans, secured or unsecured loans to
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.
In view of the above, provisions of clause 4 (iii) (b), (c), (d) are
not applicable to the company.
(b) The company has taken unsecured loan of Rs 5,000 lacs from a
company covered in the register maintained under Section 301 of the
Act. According to the information and explanation given to us, the rate
of interest and other terms and conditions of the loan taken are prima
facie not prejudicial to the interest of the company.
4. In our opinion and according to information and explanation given
to us, there are adequate internal control procedures commensurate with
the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods.
5. (a) On the basis of our examination of the books of accounts, we
are of the opinion that the transactions that need to be entered in the
register in pursuance of Section 301 of the Act have been entered in
the said register.
(b) In our opinion, and according to the information & explanation
given to us, the transactions made during the year with parties covered
under Section 301 of the Act have been at prices which are reasonable,
having regard to the prevailing market price for such goods and
materials or prices at which transaction for similar goods or material
have been made with other parties.
6. According to the information and explanation given to us, the
company has not accepted any deposits from the public within the
meaning of Section 58A and 58AA of the Act and the rules framed there
under. Hence the provisions of clause 4(vi) are not applicable to the
company.
7. In our opinion and according to information and explanation given
to us, the Company''s present internal audit system is commensurate with
its size and the nature of its business.
8. We have reviewed the books of accounts maintained by the company in
respect of Steel division, where, pursuant to the rules made by the
Central Government, the maintenance of Cost Records have been
prescribed under Section 209(1) (d) of the Companies Act, 1956. We are
of the view that prima facie the prescribed accounts and records have
been maintained. We have not, however, made a detailed examination of
the records with a view to determine whether they are accurate or
complete.
9. (a) According to the books and records as produced and examined by
us in accordance with generally accepted auditing practices in India
and also Management representations, undisputed statutory dues in
respect of Provident fund, Profession Tax, Income Tax, Sales Tax, Value
added Tax, Wealth Tax, Service Tax, Custom duty, Excise duty, Cess and
other material statutory dues, if any, applicable to it, has been
regularly deposited with the appropriate authorities.
(b) According to the records of the Company, the disputed dues in
respect of Excise Duty of Rs 428.73 lacs (Previous period Rs 447.84
lacs) and Sales Tax of Rs NIL (Previous period Rs 28.65 lacs) as at
March 31st, 2013 have not been deposited with appropriate authorities
and no provision has been made for the same.
Name of the Statute Amount Forum where dispute is pending
(In Lacs)
38.94 Chief Commissioner of Appeals
32.95 Assistant Commissioner
135.55 Commissioner
The Central Excise
Act, 1944 36.38 Additional Commissioner
150.89 High Court
34.02 Supreme Court
Total 428.73
10 The Company s accumulated losses at the end of the current year are
more than fifty percent of its net worth. The Company has not incurred
cash losses during the year and also not incurred cash losses in the
immediately preceding period (9 months).
11 In our opinion and according to the information and explanation
given to us and the books of accounts verified by us, the company has
not defaulted in repayment of dues to financial institutions and banks.
12 According to information and explanation given to us, the Company
has not granted any loans or advances on the basis of security by way
of pledge of shares, debentures and other securities during the year.
13 In our opinion, considering the nature of activities carried on by
the Company during the year, the provisions of any special statute
applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not
applicable to it. Hence the provisions of clause 4(xiii) are not
applicable to the company.
14 According to the information and explanations given to us, the
Company is not a dealer or trader in shares, securities, debentures and
other investments. Hence clause 4(xiv) is not applicable to the
company.
15 According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from a bank, the
terms and conditions whereof in our opinion are not prejudicial to the
interest of the company.
16 As per information given to us, no fresh term loans have been taken
by the Company during the year. Hence the provisions of clause 4(xvi)
are not applicable to the company.
17 On the basis of overall examination of the Balance Sheet of the
Company and according to information and explanations given to us,
there are no funds raised on short-term basis, which have been used for
long-term investments.
18 According to information and explanation given to us, the Company
has during the year, made preferential allotment of shares to the party
covered in the register maintained under Section 301. In our opinion,
the price at which the shares have been issued is not prejudicial to
the interest of the Company.
19 According to information and explanation given to us, the Company
has not issued any fresh debenture during the year. Hence the
provisions of clause 4(xix) are not applicable to the Company.
20 According to information and explanation given to us, the Company
has not raised any money by public issue during the year. Hence the
provisions of clause 4(xx) are not applicable to the company.
21 During the course of our examination of the books of account carried
in accordance with the generally accepted auditing standards in India,
we have neither come across any instance of fraud on or by the Company,
either noticed or reported during the year, nor have we been informed
of such case by the Management.
For and on behalf of
Todarwal & Todarwal
Chartered Accountants
ICAI Reg No : 111009W
Sunil Todarwal
Dated : 25th May, 2013 Partner
Place: Mumbai M. No. : 32512
Mar 31, 2012
We have audited the accompanying financial statements of Lloyds Steel
Industries Limited, which comprise the Balance sheet as at March 31,
2012 and the Statement of Profit and Loss and Cash Flow statement for
the period ended then, and a summary of Significant Accounting Policies
and other explanatory information.
Management's Responsibility for the Financial Statements Management
is responsible for the preparation of these financial statements that
give a true and fair view of the financial position, financial
performance and Cash flows of the company in accordance with the
accounting principles generally accepted in India, including accounting
standards referred to in sub section (3C) of section 211 of the
Companies Act. 1956.
This responsibility includes the design, implementation and maintenance
of internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the auditing standards 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 of
material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by Management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
As required by the Companies (Auditors' Report) Order, 2003. as amended
by Companies (Auditors' Report) (Amendment) 2004 (together 'the
order') issued by the Central Government of India in terms of Section
227(4A) of the Companies Act, 1956, of India (the Act) and on the basis
of such checks as we considered appropriate, and according to the
information and explanations given to us, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order to the extent applicable to the Company.
Opinion
(a) 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:
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account:
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report have been prepared in
compliance with the applicable accounting standards referred to in
Section 211 (3C) of the Act:
(e) On the basis of the written representations received from the
Directors and taken on record by the Board of Directors of the Company,
none of the Directors is disqualified as on March 31,2012 from being
appointed as a Director in terms of clause (g) of sub-section (1) of
Section 274 of the Act;
(f) In view of the foregoing paragraphs, in our opinion and to the best
of our information and according to the explanations given to us. the
Balance Sheet. Profit and Loss Account and Cash flow together with the
Notes thereon and attached thereto, give in the prescribed manner, the
information required by the Act and also give, a true and fair view in
conformity with the accounting principles generally accepted in India:
i) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2012:
ii) In the case of the Profit and Loss Account, of the Loss for the
period ended on that date; and
iii) In the case of the Cash Flow Statement, of the Cash Flow of the
Company for the period ended on that date.
ANNEXURE TO AUDITORS' REPORT
[Referred to in above the Auditor's Report of even date to the
Members of Lloyds Steel Industries Limited on the Financial
Statements for the period ended 31st March 2012]
1. (a) The Company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As per the information and explanation given to us, fixed assets
are physically verified by the management according to a phased
programmed designed to cover all the locations which in our opinion, is
reasonable having regard to the size of the company and the nature of
its assets. Pursuant to the programmed, the management during the period
physically verified the fixed assets at certain locations and no
material discrepancies were noticed on such verification.
(c) In our opinion and according to the information and explanation
given to us, the company has disposed off an insignificant part of the
fixed assets during the period. Thus, paragraph 4(i) (c) of the
Companies (Auditor's Report) Order, 2003 is not applicable.
2. (a) Inventory has been physically verified by the management during
the period. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) In our opinion and according to the information & explanations
given to us, the Company is maintaining proper records of inventory.
The discrepancies noticed on verification between the physical stocks
and the book records were not material.
3. (a) According to information and explanation given to us, the
Company has neither granted nor taken any secured or unsecured loans to
from companies, firms, parties covered in the register maintained under
Section 301 of the Act.
In view of the above, provisions of clause 4(iii) (b). (c),
4. In our opinion and according to information and explanation given
us, there are adequate internal control procedures commensurate with
the sis-e of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods. ,
5. (a) On the basis of our examination of the books of account, we are
of the opinion that the transactions that need to be entered in the
register in pursuance of Section 301 of the Act have been entered in
the said register.
(b) In our opinion, and according to the information & explanation
given to us, the transactions made during the period with parties
covered under Sec.301 of the Act have been at prices which are
reasonable, having regard to the prevailing market price for such goods
and materials or prices at which transaction for similar goods or
material have been made with other parties.
6. According to the information and explanation given to us, the
company has not accepted any deposits from the public within the
meaning of Section 58A and 58AA of the Act and the rules framed there
under. Hence the provisions of clause 4(vi) are not applicable to the
company.
7. In our opinion and according to information and explanation given
to us, the Company's present internal audit system is commensurate
with its size and the nature of its business.
8. We have reviewed the books of accounts maintained by the company in
respect of Steel division, where, pursuant to the rules made by the
Central Government, the maintenance of Cost Records have been
prescribed u/s. 209(1) (d) of the Companies Act, 1956. We are of the
view that prima facie the prescribed accounts and records have been
maintained. We have not, however, made a detailed examination of the
records with a view to determine whether they are accurate or complete.
9. (a) According to the books and records as produced and examined by
us in accordance with generally accepted auditing practices in India
and also Management representations, undisputed statutory dues in
respect of Provident fund, Profession tax, Income Tax, Sales Tax, Value
added tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and
other material statutory dues, if any, applicable to it, has been
regularly deposited with the appropriate authorities.
(b) According to the records of the Company, the disputed dues in
respect of Excise Duty of Rs 447.84 lacs (Previous year Rs 447.84 lacs)
and Sales Tax of Rs 28.65 lacs (Previous year Rs 28.65 lacs) as at March
31st, 2012 have not been deposited with appropriate authorities and no
provision has been made for the same.
Sr. Name of the Amount Forum where
No. Statute (In Lacs) dispute is
pending
1 The Central
Excise 43.38 Chief Commissioner
Act, 1944 of Appeals
10 The Company's accumulated losses at the end of the current period
are more than fifty percent of its net worth. The Company has not
incurred cash losses during the period and also not incurred cash
losses in the immediately preceding financial period.
11 According to the information and records produced before us. the
amount of default in the dues to lenders aggregated to 7334.87 lacs as
loans were under various stages of restructuring process. The
restructuring of entire Loans has been completed during the period.
12 According to information and explanation given to us. the Company
has not granted any loans or advances on the basis of security by way
of pledge of shares, debentures and other securities during the period.
13 In our opinion, considering the nature of activities carried on by
the Company during the period, the provisions of any special statute
applicable to chit fund/ Nidhi mutual benefit fund/ societies are not
applicable to it. Hence the provisions of clause 4(xiii) are not
applicable to the company.
14 According to the information and explanations given to us, the
Company is not a dealer or trader in shares, securities, debentures and
other investments. Hence clause 4(xiv) is not applicable to the
company.
15 According to the information and explanations given to us, the
Company has given guarantee for roans taken by others from a bank, the
terms and conditions whereof in our opinion are not prejudicial to the
interest of the company.
16 As per information given to us, no fresh term loans have been taken
by the Company during the period. Hence the provisions of clause 4(xvi)
are not applicable to the company .
17 On the basis of overall examination of the Balance Sheet of the
Company and according to information and explanations given to us,
there are no funds raised on short-term basis, which have been used for
long-term investments.
18 According to information and explanation given to us, the Company
has during the period, made preferential allotment of shares to the
party covered in the register maintained under section 301. In our
opinion, the price at which the shares have been issued is not
prejudicial to the interest of the company.
19 According to information and explanation given to us, the company
has not issued any fresh debenture during the period. Hence the
provisions of clause 4(xix) are not applicable to the company.
20 According to information and explanation given to us, the Company
has not raised any money by public issue during the period. Hence the
provisions of clause 4(xx) are not applicable to the company.
21 During the course of our examination of the books of account carried
in accordance with the generally accepted auditing standards in India,
we have neither come across any instance of fraud on or by the Company,
either noticed or reported during the period, nor have we been informed
of such case -by the Management.
For and on behalf of
TODARWAL & TODARWAL
Chartered Accountants
ICAI Reg No : 111009W
Sunil Todarwal
Dated : 21st April 2012 Partner
Place : Mumbai M. No. 32512
Jun 30, 2011
1. We have audited the attached Balance Sheet of Lloyds Steel
Industries Limited as at June 30, 2011 and the related Profit and Loss
Account and Cash Flow for the period ended on that date, annexed
thereto, both of which we have signed under reference to this report.
These financial statements are the responsibility of the Management of
the Company. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We have 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. Further, 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 purposes of
our audit;
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report have been prepared in
compliance with the applicable accounting standards referred to in
Section 211 (3C) of the Act;
(e) The company has changed the valuation method, of Engineering Plant
finished goods, from contract price method to lower of cost and market
value method. Since there was no closing inventories of the same as on
30th June, 2011, there is no impact on the financials in the current
period.
(f) The company has not provided interest amounting to f 6096.44 lacs
for the current period (till date f 22771.77 lacs): Had the same been
considered the loss for the period would have been Rs20063.58 lacs (as
against the reported figure of loss of f 13967.14 lacs) and the
accumulated loss for the period ending would have been f 185440.57 lacs
(as against the reported loss of f 162668.80 lacs)
(g) On the basis of the written representations received from the
Directors and taken on record by the Board of Directors of the Company,
none of the Director is disqualified as on June 30, 2011 from being
appointed as a Director in terms of clause (g) of sub-section (1) of
Section 274 of the Act;
(h) In view of the foregoing paragraphs, in our opinion and to the best
of our information and according to the explanations given to us, and
subject to point 4 (f), regarding non provision of interest above the
Balance Sheet, Profit and Loss Account and Cash flow together with the
Notes thereon and attached thereto, give in the prescribed manner, the
information required by the Act and also give, a true and fair view in
conformity with the accounting principles generally accepted in India:
i) In the case of the Balance Sheet, of the state of affairs of the
Company as at June 30, 2011;
ii) In the case of the Profit and Loss Account, of the Loss for the
period ended on that date; and
iii) In the case of the Cash Flow Statement, of the Cash Flow of the
Company for the period ended on that date.
ANNEXURE TO AUDITORS' REPORT
[Referred to in Paragraph 3 of the Auditor's Report of even date to the
Members of Lloyds Steel Industries Limited on the Financial Statements
for the period ended 30th June 2011]
1. (a) The Company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As per the information and explanation given to us, fixed assets
are physically verified by the management according to a phased
programme designed to cover all the locations which in our opinion, is
reasonable having regard to the size of the company and the nature of
its assets. Pursuant to the programme, the management during the period
physically verified the fixed assets at certain locations and no
material discrepancies were noticed on such verification.
(c) In our opinion and according to the information and explanation
given to us, the company has disposed off an insignificant part of the
fixed assets during the period. Thus, paragraph 4(i) (c) of the
Companies (Auditor's Report) Order, 2003 is not applicable.
2. (a) Inventory has been physically verified by the management during
the period. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed- by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) In our opinion and according to the information & explanations
given to us, the Company is maintaining proper records of inventory.
The discrepancies noticed on verification between the physical stocks
and the book records were not material.
3. (a) According to information and explanation given to us, the
Company has neither granted nor taken any secured or unsecured loans to
/ from companies, firms, parties covered in the register maintained
under Section 301 of the Act. In view of the above, provisions of
clause 4(iii) (b), (c), (d), (e), (f) and (g) are not applicable to the
company.
4. In our opinion and according to information and explanation given
to us, there are adequate internal control procedures commensurate with
the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods.
5. (a) On the basis of our examination of the books of account, we are
of the opinion that the transactions that need to be entered in the
register in pursuance of Section 301 of the Act have been entered in
the said register. (b) In our opinion, and according to the
information & explanation given to us, the transactions made during the
period with parties covered under Sec.301 of the Act have been at
prices which are reasonable, having regard to the prevailing market
price for such goods and materials or prices at which transaction for
similar goods or material have been made with other parties.
6. According to the information and explanation given to us, the
company has not accepted any deposits from the public within the
meaning of Section 58A and 58AA of the Act and the rules framed there
under. Hence the provisions of clause 4(vi) are not applicable to the
company.
7. In our opinion and according to information and explanation given
to us, the Company's present internal audit system is commensurate with
its size and the nature of its business.
8. We have reviewed the books of accounts maintained by the company in
respect of Steel division, where, pursuant to the rules made by the
Central Government, the maintenance of Cost Records have been
prescribed u/s. 209(1) (d) of the Companies Act, 1956. We are of the
view that prima facie the prescribed accounts and records have been
maintained. We have not, however, made a detailed examination of the
records with a view to determine whether they are accurate or complete.
9. (a) According to the books and records as produced and examined by
us in accordance with generally accepted auditing practices in India
and also Management representations, undisputed statutory dues in
respect of Provident fund, Profession tax, Income Tax, Sales Tax, Value
added tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and
other material statutory dues, if any, applicable to it, has been
regularly deposited with the appropriate authorities. (b) According to
the records of the Company, the disputed dues in respect of Excise Duty
of Rs 447.84 lacs (Previous year Rs 447.84 lacs) and Sales Tax of Rs
28.65 lacs (Previous year Rs 28.65 lacs) as at June 30, 2011 have not
been deposited with appropriate authorities and no provision has been
made for the same.
Sr. Name of the Amount Forum where dispute
No. Statute (In Lacs) is pending
1 The Central Excise
Act, 1944 43.38 Chief Commissioner of Appeals
45.07 Assistant Commissioner
135.55 Commissioner
38.94 Additional Commissioner
150.89 High Court
34.01 Supreme Court
Total 447.84
2 State & Central Sales
Tax Acts. 28.65 Gujarat Sales Tax Tribunal
Total 28.65
10 The Company's accumulated losses at the end of the current period
are not less than fifty percent of its net worth and the Company has
not incurred cash losses in the period under audit, and also not in the
immediately preceding financial year.
11 According to the records of the Company, and as informed to us, the
dues to Lenders are under various stages of restructuring process.
Amount of default aggregating to Rs 7334.87 lacs till date including Rs
4559.96 lacs during the period.
12 According to information and explanation given to us, the Company
has not granted any loans or advances on the basis of security by way
of pledge of shares, debentures and other securities during the period.
13 In our opinion, considering the nature of activities carried on by
the Company during the period, the provisions of any special statute
applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not
applicable to it. Hence the provisions of clause 4(xiii) are not
applicable to the company.
14 According to the information and explanations given to us, the
Company is not a dealer or trader in shares, securities, debentures and
other investments. Hence clause 4(xiv) is not applicable to the
company.
15 According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from a bank, the
terms and conditions whereof in our opinion are not prejudicial to the
interest of the company.
16 As per information given to us, no fresh term loans have been taken
by the Company during the period. Hence the provisions of clause 4(xvi)
are not applicable to the company.
17 On the basis of overall examination of the Balance Sheet of the
Company and according to information and explanations given to us,
there are no funds raised on short-term basis, which have been used for
long-term investments.
18 According to information and explanation given to us, the Company
has during the period made preferential allotment of share to a party
covered in the register maintained under section 301. In our opinion
the price at which it is issued is not prejudicial to the interest of
the Company.
19 According to information and explanation given to us, the company
has not issued any fresh debenture during the period. Hence the
provisions of clause 4(xix) are not applicable to the company.
20 According to information and explanation given to us, the Company
has not raised any money by public issue during the period. Hence the
provisions of clause 4(xx) are not applicable to the company.
21 During the course of our examination of the books of account carried
in accordance with the generally accepted auditing standards in India,
we have neither come across any instance of fraud on or by the Company,
either noticed or reported during the period, nor have we been informed
of such case by the Management.
For and on behalf of
TODARWAL & TODARWAL
Chartered Accountants
ICAI Reg. No.: 111009W
Sunil Todarwal
Dated : 29th August, 2011 Partner
Place : Mumbai M. No. - 32512
Mar 31, 2010
1. We have audited the attached Balance Sheet of Lloyds Steel
Industries Limited as at March 31, 2010 and the related Profit and Loss
Account and Cash Flow for the year ended on that date, annexed thereto,
both of which we have signed under reference to this report. These
financial statements are the responsibility of the Management of the
Company. Our responsibility is to express an opinion on these financial
statements based on our audit.
2. We have 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, as
amended by Companies (Auditors Report) (Amendment) Order, 2004
(together the order) issued by the Central Government of India in
terms of Section 227(4A) of the Companies Act, 1956, of India (the Act)
and on the basis of such checks as we considered appropriate, and
according to the information and explanations given to us, we give in
the Annexure a statement on the matters specified in paragraphs 4 and 5
of the said Order to the extent applicable to the Company.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for ~ the purposes of
our audit;
(b) In our opinion, proper books of account as required by-raw have
been kept by the Company so far as appears from our examination of
those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report have been prepared in
compliance with the applicable accounting standards referred to in
Section 211 (3C) of the Act;
(e) The company has not provided interest amounting to Rs. 4366.22
lacs for the current year (till date Rs. 19122.44 lacs). Had the same
been considered the loss for the year would have been Rs. 12174.31 lacs
(as against the reported figure of loss of Rs. 7808.09 lacs) and the
accumulated loss for the year ending would have been Rs.169726.10 lacs
(as against the reported loss of Rs. 150603.66 lacs)
(f) On the basis of the written representations received from the
Directors and taken on record by the Board of Directors of the Company,
none of the Directors is disqualified as on March 31, 2010 from being
appointed as a Director in terms of clause (g) of sub-section (1) of
Section 274 of the Act;
(g) In view of the foregoing paragraphs, in our opinion and to the best
of our information and according to the explanations given to us, and
subject to point 4 (e), regarding non provision
of interest above the Balance Sheet, Profit and Loss Account and Cash
flow together with the Notes thereon and attached thereto, give in the
prescribed manner, the information required by the Act and also give, a
true and fair view in conformity with the accounting principles
generally accepted in India:
i) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2010;
ii) In the case of the Profit and Loss Account, of the Loss for the
year ended on that date; and
iii) In the case of the Cash Flow Statement, of the Cash Flow of the
Company for the year ended on that date.
ANNEXURE TO AUDITORS REPORT
[Referred to in Paragraph 3 of the Auditors Report of even date to the
Members of Lloyds Steel Industries Limited on the Financial Statements
for the year ended 31st March 2010]
1. (a) The Company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As per the information and explanation given to us, fixed assets
are physically verified by the management according to a phased
programme designed to cover all the locations which in our opinion, is
reasonable having regard to the size of the company and the nature of
its assets. Pursuant to the programme, the management during the year
physically verified the fixed assets at certain locations and no
material discrepancies were noticed on such verification.
(c) In our opinion and according to the information and explanation
given to us, the company has disposed off an insignificant part of the
fixed assets during the year. Thus, paragraph 4(i) (c) of the Companies
(Auditors Report) Order, 2003 is not applicable.
2. (a) Inventory has been physically verified by the management
during the year. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) In our opinion and according to the information & explanations
given to us, the Company is maintaining proper records of - inventory.
The discrepancies noticed on verification between the physical stocks
and the book records were not material.
3. (a) Accordfng to information and explanation given to us, the
Company has neither granted nor taken any secured or unsecured loans to
/ from companies, firms, parties covered in the register maintained
under Section 301 of the Act. In view of the above, provisions of
clause 4(iii) (b), (c), (d), (f) and (g) are not applicable to the
company.
4. In our opinion and according to information and explanation given
to us, there are adequate internal control procedures commensurate with
the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods.
5. (a) On the basis of our examination of the books of account, we are
of the opinion that the transactions that need to be entered in the
register in pursuance of Section 301 of the Act have been entered in
the said register.
(b) In our opinion, and according to the information & explanation
given to us, the transactions made during the year with parties covered
under Sec.301 of the Act have been at prices which are reasonable,
having regard to the prevailing market price for such goods and
materials or prices at which transaction for similar goods or material
have been made with other parties.
6. According to the information and explanation given to us, the
company has not accepted any deposits from the public within the
meaning of Section 58A and 58AA of the Act and the rules framed there
under. Hence the provisions of clause 4(vi) are not applicable to the
company.
7. In our opinion and according to information and explanatiorfgiven
to us, the Companys present internal audit system is commensurate with
its size and the nature of its business.
8. We have Broadly reviewed the books of accounts maintained by the
company in respect of Steel division , where, pursuant to the rules
made by the Central Government, the maintenance of Cost Records have
been prescribed u/s. 209(1) (d) of the Companies Act, 1956. We are of
the view that prima facie the prescribed accounts and records have been
maintained. We have not, however, made a detailed examination of the
records with a view to determine whether they are accurate or complete.
9. (a) According to the books and records as produced and examined by
us in accordance with generally accepted auditing practices in India
and also Management representations, undisputed statutory dues in
respect of Provident fund, Profession tax. Income Tax, Sales Tax, Value
added tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and
other material statutory dues, if any, applicable to it, has been
regularly deposited with the appropriate authorities. (b) According to
the records of the Company, the disputed dues in respect of Excise Duty
of Rs.447.84 lacs (Previous year Rs.408.90 Lacs) and Sales Tax of Rs.
28.65 lacs (Previous year Rs.28.65 lacs) as at March 31, 2010 have not
been deposited with appropriate authorities and no provision has been
made for the same.
Sr. Name of the Amount Forum where dispute
No. Statute (In Lacs) is pending
1 The Central Excise 43.38 Chief Commissioner of
Act, 1944 Appeals
45.07 Assistant Commissioner
113.07 Commissioner
22.48 Deputy Commissioner
38.94 Additional Commissioner
150.89 High Court
34.01 Supreme Court
Total 447.84
2 State & Central 28.65 Gujarat Sales Tax Tribunal
Sales Tax Acts.
Total 28.65
10 The Companys accumulated losses at the end of the financial year
are not less than fifty percent of its net worth and it has not
incurred cash losses in the financial year under audit, however, in the
immediately preceding financial year the Company had incurred cash
losses.
11 According to the records of the Company, and as informed to us, the
dues to Lenders are under various stages of restructuring process.
Amount of default aggregating to Rs.7843.32 lacs till date including
4620.51 lacs during the year.
12 According to information and explanation given to us, the Company
has not granted any loans or advances on the basis of security by way
of pledge of shares, debentures and other securities during the year.
13 In our opinion, considering the nature of activities carried on by
the Company during the year, the provisions of any special statute
applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not
applicable to it. Hence the provisions of clause 4(xiii) are not
applicable to the company.
14 According to the information and explanations given to us, the
Company is not a dealer or trader in shares, securities, debentures and
other investments. Hence clause 4(xiv) is not applicable to the
company.
15 According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from a bank, the
terms and conditions whereof in our opinion are not prejudicial to the
interest of the company.
16 As per information given to us, no fresh term loans have been taken
by the Company during the year. Hence the provisions of clause 4(xvi)
are not applicable to the company.
17 On the basis of overall examination of the Balance Sheet of the
Company and according to information and explanations given to us,
there are no funds raised on short-term basis, which have been used for
long-term investments.
18 According to information and explanation given to us, the Company
has not made any preferential allotment of shares to parties and
companies covered in the register maintained under section 301 during
the year.
19 According to information and explanation given to us, the company
has not issued any fresh debenture during the year. Hence the
provisions of clause 4(xix) are not applicable to the company.
20 According to information and explanation given to us, the Company
has not raised any money by public issue during the year. Hence the
provisions of clause 4(xx) are not applicable to the company.
21 During the course of our examination of the books of account carried
in accordance with the generally accepted auditing standards in India,
we have neither come across any instance of fraud on or by the Company,
either noticed or reported during the year, nor have we been informed
of such case by the Management.
For and on behalf of
TODARWAL & TODARWAL
Chartered Accountants
Sunil Todarwal
Dated : 24th May, 2010 Partner
Place: Mumbai M. No. : 32512
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