Mar 31, 2023
VISA Steel Limited
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
Qualified Opinion
1. We have audited the standalone financial statements of VISA Steel Limited ("the Company") which comprise the standalone balance sheet as at March 31,2023, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, except for the effect of matter referred to in Basis of Qualified Opinion paragraph 2 below, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and loss and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Qualified Opinion
2. We draw attention to Note 16B of the accompanying Standalone Financial Statements with regard to nonrecognition of interest expense on the borrowings of the Company. The accumulated interest not provided as on March 31, 2023 is ''9,901.55 million (including ''1,459.69 million for FY 2016-17, ''1,552.29 million for FY 2017-18, ''1,465.46 million for FY 2018-19, ''1,443.39 million for FY 2019-20, ''1,286.83 million for FY 2020-21, ''1,289.27 million for FY 2021-22, ''1,404.62 million for the year ended March 31, 2023) which is not in accordance with the requirement of Ind AS 23: ''Borrowing Cost'' read with Ind AS 109: ''Financial Instruments''.
Had the aforesaid interest expense been recognized, finance cost for the year ended March 31, 2023 would have been ''1,681.90 million instead of the reported amount of ''277.28 million. Total expenses for the year ended March 31, 2023 would have been ''7,799.33 million instead of the reported amount of ''6394.71 million. Net loss after tax for the year ended March 31, 2023 would have been ''6,041.75 million instead of the reported amount of ''4,637.13 million. Total Comprehensive Income for the year ended March 31, 2023 would have been ''(6,036.70) million instead of the reported amount of ''(4,632.08) million, other equity would have been ''(18,780.47) million against reported ''(8,878.92) million, other current financial liability would have been ''11,991.61
million instead of reported amount of ''2,090.06 million and Loss per share for the year ended March 31, 2023 would have been ''52.18 instead of the reported amount of ''40.05.
The above reported interest has been calculated using Simple Interest rate.
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
Material Uncertainty Relating to Going Concern
4. We draw attention to Note - 36 to the standalone financial statements regarding the preparation of the statement on a going concern basis, for the reason stated therein. The Company has accumulated losses and has also incurred losses during the year ended March 31,2023. As on date, the Company''s current liabilities are substantially higher than its current assets and the Company''s net worth has also been fully eroded.
Further, State Bank of India (SBI), a financial creditor had filed an application before National Company Law Tribunal (NCLT) Kolkata Bench for initiating Corporate Insolvency Resolution Process (CIRP) under Insolvency and Bankruptcy Code (IBC), which was dismissed by NCLT. SBI preferred an appeal before National Company Law Appellate Tribunal (NCLAT) New Delhi which has directed the NCLT to restore the application and proceed further in accordance with law. The order of NCLAT has been challenged by the Company in the Hon''ble Supreme Court by way of a Civil Appeal and the same has been admitted on 9 September 2021. On 7 November 2022, Hon''ble Supreme Court passed an Order to the effect that NCLT may continue to hear the application filed by SBI but the same may not be given effect till the next date of hearing before Hon''ble Supreme Court, and the matter is pending. Subsequent to year end, SBI has assigned its debt to Assets Care & Reconstruction Enterprise Limited on May 26, 2023. Oriental Bank of Commerce, since merged with Punjab National Bank, had filed an application for initiating CIRP under IBC which was admitted vide NCLT order dated 28 November 2022 and an Interim Resolution Professional had been appointed. The NCLT order has been challenged before
NCLAT and the matter is pending. Meanwhile, Hon''ble Orissa High Court has stayed the operation of the NCLT order dated 28 November 2022.
These conditions indicate the existence of a material uncertainty that may cast significant doubt on the Company''s ability to continue as a going concern and therefore it may be unable to realise its assets and discharge its liabilities including potential liabilities in the normal course of business. All the assets including non-current assets and liabilities are still being carried at their book value except Capital Work in Progress which has been restated at its recoverable value. The appropriateness of assumption of going concern, and evaluation of recoverable value of its non-current assets is critically dependent upon the debt resolution of the Company which is under process, the Company''s ability to raise requisite finance, generate cash flows in future to meet its obligations and to earn profits in future. The ability of the Company to continue as a going concern is solely dependent on the successful outcome of these conditions, which are not wholly within the control of the Company.
The Management of the Company has prepared this financial statement on a going concern basis based on their assessment of the successful outcome of the debt resolution which will enhance the Company''s viability, till then the Company''s operations continue under conversion arrangement.
Our opinion is not qualified in respect to the above matter.
Emphasis of Matter
5. We draw attention to the following matters:
Refer Note - 34 to the standalone financial statements regarding accounting for transfer of Special Steel Undertaking, pursuant to the Scheme of Arrangement ("the scheme") approved by the NCLT vide its order dated July 8, 2019, all the assets and liabilities of the Special Steel Undertaking of VISA Steel Limited ("transferor Company") has been transferred to and vested in the VISA Special Steel Limited, (an erstwhile wholly owned step down subsidiary up to 25 November 2022) ("VSSL" or "transferee Company") at their respective book values on a going concern basis from 1 April 2013 being the appointed date. Effective date of the scheme is July 13, 2019 being the date on which certified copy of the order sanctioning the said scheme is filed with the Registrar of Companies, Cuttack.
On January 17, 2020, Hon''ble Supreme Court of India vide its ex-parte order in Civil Appeal No. 56 of 2020 filed by SBI, has ordered issuance of notice and in the meanwhile stayed the aforesaid NCLT Order. The NCLT Order had been given effect to and stood implemented by the Company prior to January 17, 2020.
To give the impact of the sanctioned scheme, the Standalone Financial Statement of the Company for the year ended March 31, 2019 were revised and the same were approved by the Board of Directors in their meeting held on October 18, 2019 and audited by us on which we have issued our qualified audit report dated October 18, 2019 and same were approved by the members in their meeting held on December 23, 2019. In compliance to the sanctioned schemes, the Company has transferred various income, expenses, assets and liabilities related to Special Steel Undertaking to VSSL from 1st April 2013 resulting in accumulated receivable of ''3,718.64 Million from VSSL as on 31 March 2019. The matter is pending with Hon''ble Supreme Court, the impact of the sanctioned scheme considered as above on financial statement is dependent on the final judgment of the Hon''ble Supreme Court, in the meanwhile the Company has squared off the above receivable based on the Award under Arbitration and Conciliation Act 1996 dated 31 October 2022 based on the conciliation process between the two Companies.
Our opinion is not qualified in respect to the above matter.
Information Other than the Standalone Financial Statements
and Auditorsâ Report Thereon
6. The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the annual report, but does not include the standalone financial statements and our auditor''s report thereon.
Our opinion on the Standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information we are required to report that fact. We have nothing to report in this regard.
Key Audit Matters
7. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
Sr. No. Key Audit Matter |
How our audit addressed the key audit matters |
1 Related Party Transaction (See Note 45 to the Standalone Financial Statements) |
|
The Company has entered into a long term conversion arrangement with a related party for earning conversion income for conversion of input raw materials into finished goods for the related party. The above transaction has a possible arm''s length pricing risk associated with it. |
We addressed the Key Audit Matter as follows :- 1) We reviewed the policy of the Company with respect to related party transactions. 2) We reviewed the minutes of the meeting of the Audit Committee and Board. 3) We reviewed the list of Related party identified by the Company. 4) We performed the sales process / procurement process walk through and tested the controls. 5) We obtained the arm''s length pricing document prepared by the Company and assessed the Key Assumptions. 6) We have assessed the application of arm''s length price documents in executing the transactions. 7) We reviewed compliance with Section 177 & 188 of the Companies Act 2013 for related party transaction. 8) We reviewed whether transactions between related parties are on normal commercial terms and conditions no more favorable than those otherwise available to other parties considering the present financial position of the Company. 9) We reviewed the disclosure of related party transactions as per Ind AS 24. Conclusion : ⢠Our audit procedures did not lead to any reservations regarding the related party transactions and its disclosure. |
Managementâs Responsibility for the Standalone Financial
Statements
8. The Company''s management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, loss and other comprehensive income, changes in equity and cash flows 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. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities, selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
9. Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
10. Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work and (ii) to evaluate the effect of any identified misstatements in the financial statements.
11. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
12. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
13. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors'' report unless law or regulation precludes public disclosure about the matter or when in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
14. As required by the Companies (Auditors'' Report) Order, 2020 ("the Order") issued by the Central Government in terms of section 143 (11) of the Act, we give in the ââAnnexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
15. 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, except for the matter referred to in paragraph 2 above, 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 standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d) In our opinion, except for the matter referred to in paragraph 2 above, the aforesaid standalone financial statements comply with the Ind AS specified under section 133 of the Act.
e) On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164(2) of the Act.
f) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above.
g) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
h) With respect to the matter to be included in the Auditors'' Report under section 197(16):
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act.
i ) With respect to the other matters to be included in
the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations as at March 31, 2023 on its financial position in its standalone financial statements - Refer Note 33 to the standalone financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31,2023.
iv. (a) The management has represented that, to the
best of it''s knowledge and belief, as disclosed in the notes to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.(Refer note - 47(h) to the financial statements);
(b) The management has represented, that, to the best of it''s knowledge and belief, as disclosed in the notes to the accounts, no funds have been received by the Company from any person or entity, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries. (Refer note - 47(h) to the financial statements);
(c) Based on such audit procedures that we considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material mis-statement.
v. The Company has not declared any dividend in the last year which has been paid in the current year. Further, no dividend has been declared in the current year.
vi. As proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only with effect from 1 April 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is not applicable.
For Singhi & Co.
Chartered Accountants Firm''s Registration No.302049E
(Rahul Bothra)
Partner
Membership No. 067330 UDIN: 23067330BGT0YQ1000
Place: Kolkata Date: May 29, 2023
Mar 31, 2018
Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements
1. We have audited the accompanying Standalone Ind AS Financial Statements of VISA Steel 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 the significant accounting policies and other explanatory information (hereinafter referred to as âthe Standalone Ind AS Financial Statementsâ).
Managementâs Responsibility for the Standalone Ind AS Financial Statements
2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act read with the Companies (Indian Accounting Standard) Rules 2015, as amended, and other accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and 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.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
4. In conducting our audit, we have taken into account the provisions of the Act and the Rules made thereunder including 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.
5. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditors'' judgment, in cluding 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 Company''s preparation of the standalone Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the standalone Ind AS financial statements.
Basis for Qualified Opinion
8. We draw your attention to Note 18D to the Standalone Ind AS Financial Statements with regard to non-recognition of interest expense amounting to 7,715.51 Million which includes Rs. 3,874.55 Million for FY-2017-18 and Rs.3,840.96 Million for FY-2016-17 on the borrowings of the Company which is not in accordance with the requirements of Ind AS 23: Borrowing Costs read with Ind AS 109: Financial Instruments.
Flad the aforesaid interest expense been recognised, Finance costs for the year ended March 31, 2018 would have been Rs.4,147.89 Million instead of the reported amount of Rs.27334 Million; Total Expenses for the year ended March 31,2018 would have been Rs.21,868.21 Million instead of Rs.17,993.66 Million; Net Loss after tax for the year ended March 31, 2018 would have been Rs.5,330.73 Million instead of the reported amount of Rs.1,456.18 Million; Total Comprehensive Income for year ended March 31, 2018 would have been Rs. (5328.78) Million instead of the reported amount of Rs. (1,454.23) Million and Loss Per Share for the year ended March 31, 2018 would have been Rs.47.37 instead of the reported amount of Rs.12.94. Other Equity and Other Current Financial Liabilities as at March 31, 2018 would have been Rs. (16,806.95) Million and Rs.26,015.34 Million instead of the reported amount of Rs. (9,091.44) Million and Rs.18,299.83 Million respectively.
The unprovided interest amount reported above has been recalculated retrospectively from April 1, 2016 at simple interest instead of compound interest considered till March 31, 2017.
Qualified Opinion
9. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and except for the effect of matter referred to in paragraph 8 above, give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, its total comprehensive income (comprising loss and other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter
10. We draw attention to Note 38 to the standalone Ind AS financial statements, regarding the preparation of the same on going concern basis, consequently assets and liabilities are being carried at their book value and impairment assessment in this regard is in progress. The Company has incurred a net loss during the year ended March 31, 2018 and, as of that date, the Company''s current liabilities exceeds its current assets and the Company''s net worth has been eroded as at the balance sheet date. These conditions along with other matters as set forth in the aforesaid Note, indicate the existence of a material uncertainty that may cast significant doubt about the Company''s ability to continue as a going concern.
Our opinion is not qualified in respect of the above matter.
Other Matter
11. Attention is drawn to the fact that the comparative figure for the year ended March 31, 2017 are based on the previously issued standalone financial statement, prepared in accordance with the Ind AS, that were audited by the erstwhile Auditor. The audit report dated November 9, 2017 on the audited standalone financial statement of the Company for the year ended March 31, 2017 issued by predecessor auditor expressed a qualified opinion.
Our opinion is not qualified in respect of the above matters.
Report on Other Legal and Regulatory Requirements
12. As required by the Companies (Auditor''s Report) Order,
2016, issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act (âthe Orderâ), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.
13. As required by Section 143 (3) of the Act, based on our audit, we report, to the extent applicable that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, except for the matter referred to in paragraph 8 above, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
(d) In our opinion, except for the matter referred to in paragraph 8 above, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.
(e) The matter mentioned in paragraph 10 above, in our opinion, may have an adverse effect on the functioning of the Company.
(f) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.
(g) With reference to maintenance of accounts and other matters connected therewith, reference is drawn to our comment in paragraph 13 (b) above.
(h) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A.
(i) With respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
i. The Company has disclosed the impact, if any, of pending litigations as at March 31, 2018 on its financial position in its standalone Ind AS financial statements - Refer Note 36A.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses. ;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. The disclosures in the financial statements regarding holdings as well as dealings in specified bank notes during the period from November 8, 2016 to December 30, 2016 have not been made since they do not pertain to the financial year ended March 31, 2018.
Annexure A to Independent Auditorsâ Report
Referred to in paragraph 13 (h) of the Independent Auditors'' Report of even date to the members of VISA Steel Limited on the standalone Ind AS financial statements for the year ended March 31, 2018.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act
1. We have audited the internal financial controls over financial reporting of VISA Steel Limited (âthe Companyâ) as of March 31, 2018, in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
2. The Company''s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act 2013.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing prescribed under Section 143(10) of the Act 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 ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
6. A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that :
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with 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 company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Basis for Qualified opinion
8. According to the information and explanations given to us and based on our audit, the following material weakness has been identified in the operating effectiveness of the Company''s internal financial controls over financial reporting as at March 31, 2018:
The Company''s internal financial controls relating to application of appropriate policies and procedures that provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles were not operating effectively which resulted in non-recognition of interest expense as indicated in Note 18D to the standalone Ind AS financial statements.
9. A âmaterial weakness'' is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company''s annual or interim financial statements will not be prevented or detected on a timely basis.
Qualified opinion
10. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and except for the effects of the material weakness described in the Basis for Qualified Opinion paragraph above, such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Explanatory paragraph
We also have audited, in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act, the standalone financial statements of Visa Steel Limited, which comprise the Balance Sheet as at March 31, 2018, and the related Statement of Profit and Loss including other comprehensive income and Cash Flow Statement and the Statement of changes in equity for the year ended, and a summary of significant accounting policies and other explanatory information. Resultant impact of this material weakness has been appropriately considered in our audit of the March 2018 standalone financial statements of Visa Steel Limited and this report affect our report dated May 02, 2018, which expressed a qualified opinion on those financial statements.
Annexure B to Independent Auditorsâ Report
Referred to in paragraph 12 of the Independent Auditors'' Report of even date to the members of VISA Steel Limited on the standalone Ind AS financial statements as of and for the year ended March 31, 2018
We report that :
i. In respect of its fixed assets:
(a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.
(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.
(c) The title deeds of immovable properties, as disclosed in Note 3A on fixed assets to the standalone Ind AS financial statements, are held in the name of the Company.
ii. The physical verification of inventory have been conducted at reasonable intervals by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material.
iii. The Company has granted unsecured loan to one company covered in the register maintained under Section 189 of the Act. The Company has not granted any other secured/ unsecured loans to firms /Limited Liability Partnerships/ other parties covered in the register maintained under Section 189 of the Act.
(a) In respect of the aforesaid loan, the terms and conditions under which such loan was granted are not prejudicial to the Company''s interest.
(b) In respect of the aforesaid loan, an amount aggregating Rs. 3.40 Million is overdue as at Balance Sheet date as the party is not repaying the principal amount as stipulated and is also not regular in payment of interest thereon.
(c) In respect of the aforesaid loan, the total amount overdue for more than ninety days as at March 31, 2018 is Rs. 3.33 Million. In such instances, in our opinion, reasonable steps have been taken by the Company for the recovery of the principal amount and interest thereon.
iv. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 in respect of the loans and investments made, and guarantees and security provided by it, as applicable.
v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.
vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products.
We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, except for dues in respect of excise and goods and services tax, the Company is generally regular in depositing undisputed statutory dues in respect of provident fund, service tax and income tax, though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues, including, employees'' state insurance, sales tax, duty of customs, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities. The extent of arrears of statutory dues outstanding as at March 31, 2018 for a period of more than six months from the date they become payable are as follows:
Name of the statute |
Nature of dues |
Amount (Rs.in Millions) |
Period to which the amount relates |
Due Date |
Date of Payment |
Central Excise Act, 1944 |
Penalty |
1.52 |
Nov-14 |
6-Dec-14 |
Not yet paid |
Central Excise Act, 1944 |
Penalty |
0.53 |
Dec-14 |
6-Jan-15 |
Not yet paid |
Central Excise Act, 1944 |
Penalty |
1.36 |
Jan-15 |
6-Feb-15 |
Not yet paid |
Central Excise Act, 1944 |
Penalty |
0.54 |
Feb-15 |
6-Mar-15 |
Not yet paid |
Central Excise Act, 1944 |
Penalty |
0.99 |
Mar-15 |
31-Mar-15 |
Not yet paid |
Central Excise Act, 1944 |
Penalty |
0.63 |
Apr-15 |
6-May-15 |
Not yet paid |
Central Excise Act, 1944 |
Penalty |
1.35 |
May-15 |
6-Jun-15 |
Not yet paid |
Central Excise Act, 1944 |
Penalty |
1.19 |
Jun-15 |
6-Jul-15 |
Not yet paid |
Central Excise Act, 1944 |
Penalty |
1.31 |
Jul-15 |
6-Aug-15 |
Not yet paid |
Central Excise Act, 1944 |
Penalty |
0.31 |
Aug-15 |
6-Sep-15 |
Not yet paid |
Central Excise Act, 1944 |
Penalty |
0.08 |
Sep-15 |
6-Oct-15 |
Not yet paid |
Central Excise Act, 1944 |
Penalty |
0.26 |
Oct-15 |
6-Nov-15 |
Not yet paid |
Central Excise Act, 1944 |
Penalty |
0.20 |
Apr-17 |
6-May-17 |
Not yet Paid |
Central Excise Act, 1944 |
Penalty |
0.20 |
Apr-17 |
6-May-17 |
Not yet Paid |
Central Excise Act, 1944 |
Penalty |
0.30 |
May-17 |
6-Jun-17 |
Not yet Paid |
Central Excise Act, 1944 |
Penalty |
3.20 |
May-17 |
6-Jun-17 |
Not yet Paid |
Central Excise Act, 1944 |
Tax Payable |
32.00 |
May-17 |
6-Jun-17 |
Not yet Paid |
Central Excise Act, 1944 |
Interest |
0.36 |
Dec-16 |
6-Jan-17 |
Not yet Paid |
Central Excise Act, 1944 |
Interest |
0.06 |
Jan-17 |
6-Feb-17 |
Not yet Paid |
Central Excise Act, 1944 |
Interest |
0.02 |
Jan-17 |
6-Feb-17 |
Not yet Paid |
Central Excise Act, 1944 |
Interest |
0.19 |
Jan-17 |
6-Feb-17 |
Not yet Paid |
Central Excise Act, 1944 |
Interest |
0.20 |
Jan-17 |
6-Feb-17 |
Not yet Paid |
Central Excise Act, 1944 |
Interest |
0.23 |
Jan-17 |
6-Feb-17 |
Not yet Paid |
Central Excise Act, 1944 |
Interest |
0.01 |
Feb-17 |
6-Mar-17 |
Not yet Paid |
Central Excise Act, 1944 |
Interest |
0.05 |
Mar-17 |
31-Mar-17 |
Not yet Paid |
Central Excise Act, 1944 |
Interest |
0.07 |
Mar-17 |
31-Mar-17 |
Not yet Paid |
Central Excise Act, 1944 |
Interest |
0.25 |
Apr-17 |
6-May-17 |
Not yet Paid |
Central Excise Act, 1944 |
Interest |
0.24 |
Apr-17 |
6-May-17 |
Not yet Paid |
Central Excise Act, 1944 |
Interest |
0.25 |
Apr-17 |
6-May-17 |
Not yet Paid |
Central Excise Act, 1944 |
Interest |
0.26 |
May-17 |
6-Jun-17 |
Not yet Paid |
Central Excise Act, 1944 |
Interest |
3.92 |
May-17 |
6-Jun-17 |
Not yet Paid |
Goods & Service tax, 2017 |
Interest |
6.93 |
Aug-17 |
20-Sep-17 |
Not yet Paid |
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of service-tax and duty of customs which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax, duty of excise and value added tax as at March 31, 2018 which have not been deposited on account of a dispute, are as follows:
Name of the statute |
Nature of dues |
Amount (Rs. In Million) |
Period to which the amount relates |
Forum where the dispute is pending |
Income Tax Act, 1961 |
Income Tax |
3.66 |
Assessment Year 2006-07 |
Hon''ble high court of Kolkata |
Income Tax Act, 1961 |
Income Tax |
45.07 |
Assessment Year 2004-05 |
Income Tax Appellate Tribunal, Kolkata |
Income Tax Act, 1961 |
Income Tax |
3.65 |
Assessment Year 2011-12 |
The Commissioner of Income Tax Appeals, Kolkata |
Central Excise Act, 1944 |
Duty of Excise |
10.46 |
Financial Year 2008-09 to 2010-11 |
Custom,Excise & Service Tax Appellate Tribunal, Kolkata |
Central Excise Act, 1944 |
Duty of Excise |
5.01 |
Financial Year 2012-13 to 2013-14 |
Commissioner Appeals, Bhubaneshwar |
Service Tax under Finance Act, 1994 |
Service Tax |
39.02 |
Financial Year 2011-12 to 2014-15 |
Commissioner CGST & Central Excise and Customs |
Service Tax under Finance Act, 1994 |
Service Tax |
15.61 |
Financial Year 2010-11 to 2011-12 |
Commissioner of Central Excise (Appeals) |
Duty of Customs |
Custom Duty |
10.23 |
Financial Year 2011-12 |
Commissioner Appeals, Bhubaneshwar |
Duty of Customs |
Custom Duty |
11.71 |
Financial Year 2012-13 |
Custom,Excise & Service Tax Appellate Tribunal, Kolkata |
Central Sales Tax Act,1956 |
Central Sales Tax |
0.02 |
Financial Year 1999-2000 |
Sales tax Tribunal, Orissa |
Central Sales Tax Act,1956 |
Central Sales Tax |
1.91 |
Financial Year 2011-12 |
Joint Commissioner Appeals, Jajpur Road |
Central Sales Tax Act,1956 |
Central Sales Tax |
111.80 |
Financial Year 2007-08 to 2009-10 |
High Court of Odisha |
Central Sales Tax Act,1956 |
Central Sales Tax |
42.33 |
Financial Year 2006-07 |
The Revision Board |
Odisha Value Added Tax Act, 2005 |
Odisha VAT |
0.02 |
Financial Year 2013-14 & 2014-15 |
Additional Commisioner of Commercial Taxes, Cuttack |
West Bengal Central Sales Tax Act,1956 |
WB VAT |
0.31 |
Financial Year 2010-11 |
The Revision Board |
West Bengal VAT Act |
WB VAT |
0.52 |
Financial Year 2011-12 |
West Bengal Commercial Tax Appellate and Revision Board |
viii. According to the records of the Company examined by us and the information and explanations given to us, except for loans or borrowings from banks and financial institutions aggregating Rs.26,413.46 Million for the period as set out below, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the balance sheet date.
Name of Lendor |
Nature of Dues |
Amount of Default (Rs. in Millions) Less than More than 12 months 12 Months |
Total |
||
Andhra Bank |
Principal |
& Interest |
299.72 |
763.38 |
1063.10 |
Bank of Baroda |
Principal |
& Interest |
181.61 |
568.33 |
749.94 |
Bank of India |
Principal |
& Interest |
158.90 |
245.95 |
404.85 |
Canara Bank |
Principal |
& Interest |
182.98 |
430.25 |
613.23 |
Corporation Bank |
Principal |
& Interest |
16.48 |
26.39 |
42.87 |
Dena Bank |
Principal |
& Interest |
190.26 |
265.69 |
455.95 |
Edelweiss Asset Reconstruction Company Limited |
Principal |
& Interest |
74.13 |
132.39 |
206.52 |
Exim Bank |
Principal |
& Interest |
145.87 |
485.94 |
631.81 |
HUDCO |
Principal |
& Interest |
185.46 |
346.04 |
531.50 |
Indian Overseas Bank |
Principal |
& Interest |
260.19 |
683.23 |
943.42 |
Oriental Bank of Commerce |
Principal |
& Interest |
890.95 |
2421.94 |
3312.89 |
Punjab National Bank |
Principal |
& Interest |
928.18 |
2211.47 |
3139.65 |
Punjab and Sind Bank |
Principal |
& Interest |
63.44 |
135.24 |
198.68 |
Amount of Default (Rs. in Millions) |
||||
Name of Lendor |
Nature of Dues |
Less than 12 months |
More than 12 Months |
Total |
Small Industries Development Bank of India |
Principal & Interest |
6.92 |
84.85 |
91.77 |
State Bank of India |
Principal & Interest |
1450.94 |
4130.13 |
5581.07 |
Syndicate bank |
Principal & Interest |
731.48 |
1842.32 |
2573.80 |
Assets Care and Reconstruction Enterprise Limited |
Principal & Interest |
849.52 |
2013.72 |
2863.24 |
Union Bank of India |
Principal & Interest |
583.82 |
1374.13 |
1957.95 |
Vijaya Bank |
Principal & Interest |
318.96 |
732.26 |
1051.22 |
Total |
7519.81 |
18893.65 |
26413.46 |
Note: The unprovided interest amount reported above has been recalculated by the management retrospectively from April 1, 2016 at simple interest instead of compound interest considered till March 31, 2017.
ix. In our opinion, and according to the information and explanations given to us, the moneys raised by way of term loans have been applied for the purposes for which they were obtained. However, the Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments).
x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.
xi. The Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act and Notes 16(a) to 16(c) to the standalone Ind AS financial statements.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the standalone Ind AS financial statements as required under Ind AS 24, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.
xv. The Company has not entered into any non cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.
For Singhi & Co.
Chartered Accountants
Firm Registration Number: 302049E
Pradeep Kumar Singhi
Place : Kolkata Partner
Date : May 02, 2018 Membership Number 50773
Mar 31, 2016
TO THE MEMBERS OF VISA STEEL LIMITED
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of VISA Steel Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Financial
Statements
2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements to give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making 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.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.
4. We have taken into account the provisions of the Act and the Rules made thereunder including the accounting standards and matters which are required to be included in the audit report.
5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditors'' 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 the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone financial statements.
7. 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
8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31 2016, and its loss and its cash flows for the year ended on that date.
Emphasis of Matter
9. We draw attention to Note 44 to the standalone financial statements, regarding the presentation of the same ongoing concern basis. The Company has incurred a net loss of Rs. 5,835.47 Million during the year ended March 31, 2016 and, as of that date, the Company''s current liabilities exceeds its current assets by Rs. 15,843.22 Million and the Company''s net worth has been eroded as at the balance sheet date. These conditions along with other matters as set forth in the aforesaid Note, indicate the existence of a material uncertainty that may cast significant doubt about the Company''s ability to continue as a going concern. Our opinion is not qualified in respect of this matter.
10. We draw your attention to Note 14 to the standalone financial statements regarding the decline in the value of the Company''s long term strategic investment in Visa SunCoke Limited (a subsidiary), whose net-worth has partially eroded as on March 31, 2016 and for which a provision for other than temporary decline in the value of the investment in accordance with Accounting Standard (AS) 13 ''Accounting for Investments'' is not considered necessary by the Management for the reasons stated therein. Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
11. As required by ''the Companies (Auditor''s Report) Order, 2016'', issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act (hereinafter referred to as the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.
12. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule
7 of the Companies (Accounts) Rules, 2014.
(e) The matter mentioned in paragraph 9 of Emphasis of Matter above, in our opinion, may have an adverse effect on the functioning of the Company.
(f) On the basis of the written representations received from the directors as on March 31, 2016 taken on
record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.
(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 A.
(h) With respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
i) The Company has disclosed the impact, if any, of pending litigations as at March 31, 2016 on its financial position in its standalone financial statements - Refer Note 22.
ii) The Company has long-term contracts including derivative contracts as at March 31, 2016 for which there were no material foreseeable losses as at March 31, 2016.
iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2016.
Referred to in paragraph 12 (g) of the Independent Auditors'' Report of even date to the members of Visa Steel Limited on the standalone financial statements for the year ended 31.03.2016.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act
1. We have audited the internal financial controls over financial reporting of Visa Steel Limited ("the Company") as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
2. The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act 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 ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over
Financial Reporting
6. A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with 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 company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over
Financial Reporting
7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over
Financial Reporting issued by the Institute of Chartered Accountants of India.
ANNEXURE B TO INDEPENDENT AUDITORS'' REPORT
Referred to in paragraph 11 of the Independent Auditors'' Report of even date to the members of Visa Steel Limited on the standalone financial statements as of and for the year ended March 31, 2016.
i. (a) The Company is maintaining proper records showing
full particulars, including quantitative details and situation, of fixed assets.
(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies have been noticed on such verification.
(c) The title deeds of immovable properties, as disclosed in Note 13A on fixed assets to the financial statements, are held in the name of the Company.
ii. The physical verification of inventory have been conducted at reasonable intervals by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material.
iii. The Company has granted unsecured loan to one company covered in the register maintained under Section 189 of the Act. The Company has not granted any other secured/ unsecured loans to firms/Limited Liability Partnership/ other parties covered in the register maintained under Section 189 of the Act.
(a) In respect of the aforesaid loans, the terms and conditions under which such loans were granted are not prejudicial to the Company''s interest.
(b) In respect of the aforesaid loan an amount aggregating Rs. 2.74 Million is overdue as at Balance Sheet date as the party is not repaying the principal amount as stipulated, and is also not regular in payment of interest thereon.
(c) In respect of the aforesaid loans, the total amount overdue for more than ninety days as at March 31,
2016 is Rs.1.99 Million. In such instances, in our opinion, reasonable steps have been taken by the Company for the recovery of the principal amounts and interest thereon.
iv. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and Section 186 of the Companies Act, 2013 in respect of the loans and investments made, and guarantees and security provided by it, as applicable.
v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.
vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products.
We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
vii. (a) According to the information and explanations given
to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of provident fund, employees'' state insurance, value added tax, sales tax, entry tax, profession tax, service tax, income tax, labour welfare cess though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues, including duty of customs, duty of excise 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, there are no dues of service-tax, duty of customs which have not been deposited on account of any dispute. The particulars of dues of income tax, duty of excise, sales tax and value added tax as at March 31, 2016 which have not been deposited on account of a dispute, are as follows:
ix. In our opinion, and according to the information and explanations given to us, the moneys raised by way of term loans have been applied for the purposes for which they were obtained. However, the Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments)
Name of the statute |
Nature of dues |
Amount (Rs. In Million) |
Period to which the amount relates |
Forum where the dispute is pending |
Income Tax Act, 1961 |
Income Tax |
28.13 Assessment Year 2006-07 |
The Commissioner of Income Tax Appeals, Kolkata |
|
Central Excise Act, 1944 |
Central Excise |
10.95 |
Financial Year 2008-09 to 2010-11 |
Custom Excise & Service Tax Appellate Tribunal, Kolkata |
Central Sales Tax Act,1956 |
Central Sales Tax |
0.02 |
Financial Year 1999-2000 |
Commissioner of Sales Tax |
Central Sales Tax Act,1956 |
Central Sales Tax |
111.81 |
Financial Year 2007-08 to 2009-10 |
High Court of Odisha |
Central Sales Tax Act,1956 WB CST |
43.07 |
Financial Year 2006-07 |
The Revision Board |
|
Andhra Pradesh Value Added Tax Act, 2005 |
AP-VAT |
3.43 |
Financial Year 2010-11 |
Deputy Commissioner |
Central Sales Tax Act,1956 WB VAT |
0.31 |
Financial Year 2010-11 |
The Revision Board |
|
Central Sales Tax Act,1956 WB VAT |
1.10 |
Financial Year 2011-12 |
The Revision Board |
vii i. According to the records of the Company examined by us and the information and explanations given to us, except for loans or borrowings from banks and financial institution aggregating Rs. 9,867.55 Million for the period as set out below, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the balance sheet date.
Name of lender |
Nature of dues |
Amount of Default (Rs. In Million) |
Period of Default |
Andhra Bank |
Principal & Interest |
410.71 |
Refer Note 5 (D) to the standalone financial statements
|
Bank of Baroda |
Principal & Interest |
316.84 |
|
Bank of India |
Principal & Interest |
115.48 |
|
Canara Bank |
Principal & Interest |
247.01 |
|
Central Bank of India |
Principal & Interest |
619.68 |
|
Corporation Bank |
Principal & Interest |
13.30 |
|
Dena Bank |
Principal & Interest |
113.99 |
|
Exim Bank |
Principal & Interest |
194.01 |
|
HUDCO |
Principal & Interest |
166.71 |
|
Indian Overseas Bank |
Principal & Interest |
380.01 |
.
Name of lender |
Nature of dues |
Amount of Default (Rs. In Million) |
Period of Default |
Oriental Bank of Commerce |
Principal & Interest |
1,300.27 |
Refer Note 5 (D) to the standalone financial statements |
Punjab National Bank |
Principal & Interest |
975.40 |
|
Small Industries Development |
Principal & Interest |
1.75 |
|
Bank of India |
|
|
|
State Bank of Hyderabad |
Principal & Interest |
216.06 |
|
State Bank of India |
Principal & Interest |
2,188.75 |
|
State Bank of Travancore |
Principal & Interest |
50.21 |
|
Syndicate bank |
Principal & Interest |
1,003.34 |
|
UCO Bank |
Principal & Interest |
416.47 |
|
Union Bank of India |
Principal & Interest |
716.62 |
|
Vijaya Bank |
Principal & Interest |
420.94 |
|
Total |
|
9867.55 |
x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.
xi. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act and Notes 20 (a) to 20 ( c) to the standalone financial statements.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Accounting Standard (AS) 18, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
xiv. The C ompany has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.
xv. The Company has not entered into any non cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.
For Lovelock & Lewes
Firm Registration Number - 301056E
Chartered Accountants
Pradip Law
Partner
Membership Number 51790
Place: Kolkata
Date: 27 May 2016
Mar 31, 2015
1. We have audited the accompanying standalone financial statements of
VISA Steel Limited ("the Company"), which comprise the Balance Sheet as
at March 31, 2015, the Statement of Profit and Loss, the Cash Flow
Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS
2. The Company's Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 ("the Act") with
respect to the preparation of these standalone financial statements to
give a true and fair view of the financial position, financial
performance and cash flows of the Company in accordance with the
accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making 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.
AUDITORS' RESPONSIBILITY
3. Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
4. We have taken into account the provisions of the Act and the Rules
made there under including the accounting standards and matters which
are required to be included in the audit report.
5. We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act and other applicable
authoritative pronouncements issued by the Institute of Chartered
Accountants of India. Those Standards and pronouncements require that
we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence
about the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditors' judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view, in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the financial statements.
7. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our qualified audit opinion on
the standalone financial statements.
BASIS FOR QUALIFIED OPINION
8. We draw your attention to Note 34 (a) to the financial statements
with respect to the transfer of the Company's Special Steel business to
a wholly owned subsidiary, which has not been disclosed by the Company
as a discontinuing operation subsequent to approval by the Board of
Directors of the Company for such discontinuance, its intimation to the
stock exchanges in which the Company's shares are listed and filing of
the Scheme of demerger as approved by shareholders of the Company with
the High Court. Accordingly, the Company has not disclosed the results
from discontinuing Special Steel business included in the financial
statements together with details relating to total assets to be
disposed, total liabilities to be settled, pre tax profit or loss,
income tax expense, post tax profit or loss, net cash flows pertaining
to the operating, investing, and financing activities etc. attributable
to the Special Steel business which is not in accordance with
Accounting Standard 24, Discontinuing Operations. The impact of such
deviation on total assets and liabilities as at March 31, 2015 and loss
or earnings per share, cash flows for the year on that date is
presently not ascertainable.
QUALIFIED OPINION
9. In our opinion and to the best of our information and according to
the explanations given to us, except for the indeterminate effect of
the matter referred to in the Basis for Qualified Opinion paragraph
above, the aforesaid standalone financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at March 31, 2015, and its loss and its cash flows for the year ended
on that date.
EMPHASIS OF MATTER
10. We draw attention to Note 44 to the financial statements,
regarding the preparation of the same on going concern basis. The
Company has incurred a net loss of Rs. 2414.40 million during the year
ended March 31, 2015 and, as of that date, the Company's current
liabilities exceeded its current assets by Rs. 10,521.43 million, and
the Company's net worth has been eroded as at the balance sheet date.
However, in view of developments regarding the supply of raw materials
as well as fresh line of credit from lenders in line with existing
increased production capacity and other matters stated in the aforesaid
note, these financial statements have been prepared on a going concern
basis and no adjustment has been made to the carrying value of the
assets and liabilities. Our opinion is not qualified in respect of this
matter.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
11. As required by 'the Companies (Auditor's Report) Order, 2015',
issued by the Central Government of India in terms of sub-section (11)
of Section 143 of the Act (hereinafter referred to as the "Order"), and
on the basis of such checks of the books and records of the Company 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 3 and 4 of the Order.
12. 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, except for the indeterminate effect of the matter
referred to in the Basis for Qualified Opinion paragraph above, proper
books of account as required by law have been kept by the Company so
far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, except for the indeterminate effect of the matter
referred to in the Basis for Qualified Opinion paragraph above, 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) The matter mentioned under Emphasis of Matter paragraph above , in
our opinion, may have an adverse effect on the functioning of the
Company.
(f) On the basis of the written representations received from the
directors as on March 31, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act.
(g) The qualification relating to maintenance of accounts and other
matters connected therewith are as stated in the Basis for Qualified
Opinion paragraph above.
(h) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our knowledge and belief
and according to the information and explanations given to us:
i) The Company has disclosed the impact, if any, of pending litigations
as at March 31, 2015 on its financial position in its standalone
financial statements - Refer Note 22;
ii) The Company has long-term contracts including derivative contracts
for which there were no material foreseeable losses as at March 31,
2015;
iii) There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company during the year ended March 31, 2015
i. (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.
(b) The fixed assets of the Company have been physically verified by
the Management during the year and no material discrepancies have been
noticed on such verification. In our opinion, the frequency of
verification is reasonable.
ii. (a) The 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) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
iii. The Company has granted an unsecured loan, to one company covered
in the register maintained under Section 189 of the Act. The Company
has not granted any secured/ unsecured loans to firms or other parties
covered in the register maintained under Section 189 of the Act.
(a) In respect of the aforesaid loan, an amount aggregating Rs. 1.99
million is overdue as at Balance Sheet date, as the party is not
repaying the principal amount as stipulated and is also not regular in
payment of interest thereon.
(b) In respect of the aforesaid loan, where the overdue amount is more
than Rupees One Lakh, in our opinion, reasonable steps have been taken
by the Company for the recovery of the principal amount and interest.
iv. In our opinion, and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. 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.
v. The Company has not accepted any deposits from the public within the
meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed
there under to the extent notified.
vi. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
specified under sub- section (1) of Section 148 of the Act, and are of
the opinion that, prima facie, the prescribed accounts and records have
been made and maintained. We have not, however, made a detailed
examination of the records with a view to determine whether they are
accurate or complete.
vii. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is generally regular in depositing undisputed statutory dues in respect
of provident fund, service tax, tax deducted at source and labour
welfare cess, though there has been a slight delay in a few cases, and
is regular in depositing undisputed statutory dues, including
employees' state insurance, sales tax, income tax, wealth tax, duty of
customs , duty of excise , value added tax, cess 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, there are no dues of wealth-tax,
service tax, duty of customs, cess which have not been deposited on
account of any dispute. The particulars of dues of income tax, sales
tax, value added tax and duty of excise, as at March 31, 2015 which
have not been deposited on account of a dispute, are as follows
Name of Nature of Amount Period to which Forum where the
dispute is pending
the
Statute dues (Rs.
in
Million) the amount
relates
Income
Tax Act,
1961 Income
Tax 28.13 Assessment
Year The Commissioner
of Income
Tax Appeals,
2006-07 Bhubaneswar,Orissa
Central
Sales
Tax Act,
1956 Sales
Tax 111.81 Financial
Year Sales Tax
Tribunal,
Orissa, Appeal
1999-2000
Orissa
Sales
Tax Act,
1947 Sales
Tax 0.07 Financial
Year The Asst.
Commissioner of
Sales Tax
2004-05 (Appeals),
Jajpur Range,
Jaipur Road,
Orissa
West
Bengal
Value
Added Value 43.00 Financial
Added Year The Commissioner of
Tax Commercial Taxes,
Tax
Act,
2003 2006-07 West Bengal
Central
Excise
Act,
1944 Excise
Duty 10.95 Financial
Year Central Excise
Service Tax
Appellate
2008-09 to
2010-11 Tribunal
c) The amount required to be transferred to Investor Education and
Protection Fund has been transferred within the stipulated time in
accordance with the provisions of the Companies Act, 1956 and the rules
made there under.
viii. The Company has accumulated losses exceeding fifty percent of its
net worth as at March 31, 2015 and it has also incurred cash losses
during the financial year ended on that date and in the immediately
preceding financial year.
ix. According to the records of the Company examined by us and the
information and explanations given to us, except for dues to financial
institutions and banks aggregating Rs. 2,518.24 million for the period
as mentioned in Note 5D to the financial statements, the Company has
not defaulted in repayment of dues to any financial institution or bank
or debenture holders as at the balance sheet date.
x. In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
Accordingly, the provisions of Clause 3(x) of the Order are not
applicable to the Company.
xi. In our opinion, and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained.
xii. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
year, nor have we been informed of any such case by the Management.
For Lovelock & Lewes
Firm Registration Number: 301056E
Chartered Accountants
Pradip Law
Kolkata Partner
May 29, 2015 Membership Number 51790
Mar 31, 2013
REPORT ON THE FINANCIAL STATEMENTS
1. We have audited the accompanying financial statements of VISA Steel
Limited (the "Company"), which comprise the Balance Sheet as at March
31, 2013, 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, which we have signed under
reference to this report.
MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
2. The Company''s Management is responsible for the preparation of
these financial statements that give a true and fair view of the
financial position, financial performance and cash flows of the Company
in accordance with the Accounting Standards referred to in sub-section
(3C) of section 211 of Âthe Companies Act, 1956'' of India (the "ActÂ).
This responsibility includes the design, implementation and maintenance
of internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
AUDITORS'' RESPONSIBILITY
3. 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.
4. An audit involves performing procedures to obtain audit evidence,
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditors'' judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditors consider 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.
5. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
OPINION
6. In our opinion, and to the best of our information and according to
the explanations given to us, the accompanying financial statements
give the information required by the Act in the manner so required and
give a true and fair view in Conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the 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
7. As required by Âthe Companies (Auditor''s Report) Order, 2003'', as
amended by Âthe Companies (Auditor''s Report) (Amendment) Order, 2004'',
issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the Act (hereinafter referred to as the "OrderÂ), and
on the basis of such checks of the books and records of the Company 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 Order.
8. As required by section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purpose of our
audit;
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account;
(d) In our opinion, the Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement dealt with by this report comply with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Act;
(e) On the basis of written representations received from the directors
as on March 31,2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Act.
i. (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.
(b) The fixed assets are physically verified by the Management
according to a phased programme designed to cover all the items over a
period of three years which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the Management during the year and no material
discrepancies have been noticed on such verification.
(c) In our opinion, the Company has disposed off a substantial part of
fixed assets during the year. On the basis of our examination of the
books and records of the Company, and according to the information and
explanations given to us, in our opinion, the disposal of the said part
of fixed assets has not affected the going concern status of the
Company.
ii. (a) The 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) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
iii. (a) The Company has granted unsecured loan, to one company covered
in the register maintained under Section 301 of the Act. The maximum
amount involved during the year and the year-end balance of such loans
aggregated Rs. 2.5 Million. The Company has not granted any secured/
unsecured loans to firms or other parties covered in the register
maintained under Section 301 of the Act.
(b) In our opinion, the rate of interest and other terms and conditions
of such loans are not prima facie prejudicial to the interest of the
Company.
(c) In respect of the aforesaid loans, the parties are repaying the
principal amounts, as stipulated, and are also regular in payment of
interest as applicable.
(d) In respect of the aforesaid loans, there is no overdue amount more
than Rupees One Lakh.
(e) The Company has taken unsecured loans, from three companies covered
in the register maintained under Section 301 of the Act. The maximum
amount involved during the year and the year-end balance of such loans
aggregated Rs. 1256.40 Million and Rs. 500 Million, respectively. There
are no other parties covered in the register maintained under Section
301 of the Act.
(f) In our opinion, the rate of interest and other terms and conditions
of such loans are not prima facie prejudicial to the interest of the
Company.
(g) In respect of the aforesaid loans, the Company is regular in
repaying the principal amounts, as stipulated, and is also regular in
payment of interest, as applicable.
iv. In our opinion, and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and 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.
v. (a) According to the information and explanations given to us, we
are of the opinion that the particulars of all contracts or
arrangements that need to be entered into the register maintained under
section 301 of the Companies Act, 1956 have been so entered.
(b) In our opinion, and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees Five Lakhs in respect of
any party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
vi. The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under.
vii. In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
viii. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act, and are of the opinion that, prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made
a detailed examination of the records with a view to determine whether
they are accurate or complete.
ix. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, except for
dues in respect of tax deducted at source, the Company is regular in
depositing undisputed statutory dues, including provident fund,
employees'' state insurance, investor education and protection fund,
income tax, sales tax, wealth tax, service tax, customs duty, excise
duty and other material statutory dues, as applicable, with the
appropriate authorities. However, there were no arrears of dues in
respect of tax deducted at source outstanding as at March 31, 2013 for
a period more than six months from the date they became payable.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of wealth tax,
service tax, customs duty and excise duty which have not been deposited
on account of any dispute. The particulars of dues of income tax and
sales tax as at March 31,2013 which have not been deposited on account
of a dispute, are as follows:
x. The accumulated losses of the Company did not exceed fifty percent
of its net worth as at March 31,2013 and it has not incurred cash
losses in the financial year ended on that date but had incurred cash
losses in the immediately preceding financial year.
xi. According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at the balance sheet date.
xii. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Therefore, the provisions of Clause 4(xii) of the Order are not
applicable to the Company
xiii. As the provisions of any special statute applicable to chit fund/
nidhi/ mutual benefit fund/ societies are not applicable to the
Company, the provisions of Clause 4(xiii) of the Order are not
applicable to the Company.
xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of Clause 4(xiv) of the Order are not applicable to the
Company.
xv. In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
Accordingly, the provisions of Clause 4(xv) of the Order are not
applicable to the Company.
xvi. In our opinion, and according to the information and explanations
given to us, the term loans have been applied on an overall basis, for
the purposes for which they were obtained.
xvii. According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that the Company has used funds raised on short-term basis for
long-term investment. The company has obtained short term fund
amounting to Rs. 3789.57 Million on a short term basis, which has been
used for the purpose of acquisition of fixed assets.
xviii. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year. Accordingly, the provisions of Clause
4(xviii) of the Order are not applicable to the Company.
xix. The Company has not issued any debentures during the year and does
not have any debentures outstanding as at the beginning of the year and
at the year end. Accordingly, the provisions of Clause 4(xix) of the
Order are not applicable to the Company.
xx. The Company has not raised any money by public issues during the
year. Accordingly, the provisions of Clause 4(xx) of the Order are not
applicable to the Company.
xxi. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of any such case by the Management
For Lovelock & Lewes
Firm Registration Number: 301056E
Chartered Accountants
P. Law
Partner
Membership Number: 51790
Kolkata
Date: May 29, 2013,
Mar 31, 2012
1. We have audited the attached Balance Sheet of VISA Steel Limited
(the "Company") as at 31 March, 2012 , and the related Statement of
Profit and Loss and Cash Flow Statement for the year ended on that date
annexed thereto, which we have signed under reference to this report.
These financial statements are the responsibility of the Company's
Management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003, as
amended by the Companies (Auditor's Report) (Amendment) Order, 2004
(together the "Order"), issued by the Central Government of India
in terms of sub-section (4A) of Section 227 of 'The Companies Act,
1956' of India (the 'Act') and on the basis of such checks of the
books and records of the Company 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 Order.
4. Without qualifying our opinion, we draw attention to Note 3.36 to
the financial statements, regarding the preparation of the same on a
going concern basis. The Company incurred a net loss of Rs.1188.54
Million during the year ended March 31, 2012 and, as of that date, the
Company's current liabilities exceeded its current assets by
Rs.15,111.77 Million, while the Company's net worth remains positive as
at the balance sheet date. In view of proposed plan to restructure the
Company's debt profile to convert majority of their short term loan to
long term loan , these financial statements have been prepared on a
going concern basis and no adjustment has been made to the carrying
value of the assets and liabilities.
5. 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 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 dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Act;
(e) On the basis of written representations received from the
directors, as on 31 March 2012 and taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March 2012
from being appointed as a director in terms of clause (g) of sub-
section (1) of Section 274 of the Act;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give, in the prescribed
manner, the information required by the Act, and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(i) in the case of the Balance Sheet, of the state of affairs of the
company as at 31 March 2012;
(ii) in the case of the Statement of Profit and Loss , of the loss for
the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
1. (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.
(b) The fixed assets are physically verified by the Management
according to a phased programme designed to cover all the items over a
period of three years which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the Management during the year and no material
discrepancies between the book records and the physical inventory have
been noticed.
(c) In our opinion, and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year.
2. (a) The inventory (excluding stocks with third parties) has been
physically verified by the Management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of 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) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
3. (a) The Company has granted unsecured loans, to one company covered
in the register maintained under Section 301 of the Act. The maximum
amount involved during the year and the year-end balance of such loans
aggregated to Rs. 2.5 Million.
(b) In our opinion, the rate of interest and other terms and conditions
of such loans are not prima facie prejudicial to the interest of the
Company.
(c) In respect of the aforesaid loans, the parties are repaying the
principal amounts, as stipulated, and are also regular in payment of
interest, as applicable.
(d) In respect of the aforesaid loans, there is no overdue amount more
than Rupees One Lakh.
(e) The Company has taken unsecured loans, from one company covered in
the register maintained under Section 301 of the Act. The maximum
amount involved during the year and the year-end balance of such loans
aggregated to Rs. 506.40 Millions.
(f) In our opinion, the rate of interest and other terms and conditions
of such loans are not prima facie prejudicial to the interest of the
Company.
(g) In respect of the aforesaid loans, the Company is regular in
repaying the principal amounts, as stipulated, and is also regular in
payment of interest, as applicable.
4. In our opinion, and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. 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. (a) In our opinion, and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Act have been entered in the register
required to be maintained under that section.
(b) In our opinion, and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees Five Lakhs in respect of
any party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
6. The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under.
7. In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act, and are of the opinion that, prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made
a detailed examination of the records with a view to determine whether
they are accurate or complete.
9. (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 generally regular in depositing undisputed statutory dues in respect
of tax deducted at source, though there has been a slight delay in a
few cases, and is regular in depositing undisputed statutory dues,
including provident fund, investor education and protection fund,
employees' state insurance, income tax, wealth tax, service tax,
customs duty, excise duty, cess 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
income tax, sales tax, wealth tax, service tax, customs duty and excise
duty as at 31 March, 2012 which have not been deposited on account of a
dispute, are as follows:
Name of the
statute Nature of
dues Amount Period to
which the Forum where the
dispute is
(Rs.
Million) amount
relates pending
Income
Tax
Act, 1961 Wrong
valuation
of Closing 5.49 Assessment
Year The Commissioner of
Income Tax
Stock and
loans
converted 2003-04 Appeals, Bhubaneswar,
Odisha
to equity
Income Tax
Act, 1961 Under
valuation
of Closing 44.56 Assessment
Year The Commissioner of
Income Tax
Stock and
disallowance
of 2004-05 Appeals, Bhubaneswar,
Odisha
interest
Income Tax
Act, 1961 Disallowance
of certain 10.24 Assessment
Year The Commissioner of
Income Tax
expenses 2006-07 Appeals, Bhubaneswar,
Odisha
Central
Sales Tax
(Orissa) Difference
in way bill
value 0.01 Financial
Year Sales Tax Tribunal,
Odisha
Rules, 1957 and invoice
value 1999-2000
Orissa Entry
Tax Act,
1999 Adhoc
freight
addition for 0.13 Financial
Year The Asst.
Commissioner of Sales
calculating
landed cost 2004-05 Tax (Appeals),
Jajpur Range,
Jajpur Road, Odisha
Orissa
Entry Tax
Act, 1999 Entry tax
on imported
coke 134.07 Financial
year The Commissioner of
Commercial
2008-09 Taxes, Cuttack,
Odisha
2011-12
Orissa
Sales Tax.
Act 1947 Non-payment
of Surcharge 0.01 Financial
Year The Asst.
Commissioner of Sales
2004-05 Tax (Appeals),Jajpur
Range, Jajpur Road,
Odisha
West Bengal
VAT, VAT on High
Sea Sales 43.00 Financial
Year The Commissioner of
Commercial
2006-07 Taxes, West Bengal.
10. The accumulated losses of the Company did not exceed fifty percent
of its net worth as at 31 March, 2012 and it has incurred cash losses
in the financial year ended on that date but has not incurred cash
losses in the immediately preceding financial year.
11. According to the records of the Company examined by us and the
information and explanations given to us, other than dues to financial
institution, bank as mentioned in note 3.3 G and 3.6 in the financial
statements for the period from 1 April 2011 to 31 March 2012
aggregating Rs. 620.76 Million towards principal and RS 387.17 Million
towards interest, the Company has not defaulted in repayment of dues to
any financial institution or bank or debenture holders as at the
balance sheet date.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit fund/
nidhi/ mutual benefit fund/ societies are not applicable to the
Company.
14. In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments.
15. In our opinion, and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company for loans taken by others from banks or financial institutions
during the year, are not prejudicial to the interest of the Company.
16. In our opinion, and according to the information and explanations
given to us, the term loans have been applied, on an overall basis, for
the purposes for which they were obtained.
17. On the basis of an overall examination of the balance sheet of the
Company, in our opinion, and according to the information and
explanations given to us, funds aggregating Rs. 9654.90 Million raised
on a short term basis have been used for the purpose of acquisition of
Fixed Assets and repayment of long-term loan.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. The Company has not issued any debentures during the year; and
does not have any debentures outstanding as at the year end.
20. The Company has not raised any money by public issues during the
year.
21. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of any such case by the Management.
For and on behalf of
Lovelock & Lewes
Firm Registration Number: 301056E
Chartered Accountants
Prabal Sarkar
Place: Kolkata Partner
Date: 25 May 2012 Membership Number 52340
Mar 31, 2010
1. We have audited the attached Balance Sheet of VISA Steel Limited
(the "Company") as at 31 March 2010, and the related Profit and Loss
Account and Cash Flow Statement for the year ended on that date annexed
thereto, which we have signed under reference to this report. These
financial statements are the responsibility of the Companys
Management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003, as
amended by the Companies (Auditors Report) (Amendment) Order, 2004
(together the "Order"), issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of
India (the ÃAct) and on the basis of such checks of the books and
records of the Company 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 Order.
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 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 comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the Act;
(e) On the basis of written representations received from the
directors, as on 31 March 2010 and taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March 2010
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give, in the prescribed
manner, the information required by the Act, and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(i) in the case of the Balance Sheet, of the state of afairs of the
company as at 31 March 2010;
(ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash fows 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 VISA Steel Limited on the financial statements for the year
ended 31 March 2010]
1. (a) The Company is maintaining proper records showing full parti
-culars, including quantitative details and situation of fixed
assets.
(b) The fixed assets are physically verified by the Management
according to a phased programme designed to cover all the items over a
period of three years which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the Management during the year and no material
discrepancies between the book records and the physical inventory have
been noticed.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year.
2. (a) The inventory (excluding stocks with third parties)
has been physically verified by the Management during the year. In
respect of inventory lying with third parties, these have substantially
been confirmed by them. In our opinion, the frequency of 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) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
3.(a) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.
(b) The Company has not taken any loans, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory, 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. (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Act have been entered in the register
required to be maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees Five Lakhs in respect of
any party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
6. The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under.
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. The Central Government of India has not prescribed the maintenance
of cost records under clause (d) of sub-section (1) of Section 209 of
the Act for any of the products of the Company.
9. (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 the undisputed statutory
dues including provident fund, investor education and protection fund,
employees state insurance, income tax, sales tax, wealth tax, service
tax, customs duty, excise duty, cess 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
income tax, sales tax and entry tax as at 31 March 2010 which have not
been deposited on account of a dispute, are as follows:
Name of the statute Nature of dues Amount Period to which
the amount
relates
(Rs. Million
Income Tax Act, 1961 Wrong valuation of 5.49 Assessment Year
2003-04
Closing Stock
and loans
converted to
equity
Income Tax Act, 1961 Under valuation of 44.56 Assessment Year
2004-05
Closing Stock and
disallowance of
interest
Income Tax Act, 1961 Disallowance of 10.24 Assessment Year
2006-07
certain
expenses
Central Sales Tax Difference in 0.01 Financial Year
1999-2000
way bill
value and invoice
value
(Orissa) Rules,
1957
Central Sales Tax Excess amount 0.01 Financial Year
2004-05
shown in
ÃC Form
(Orissa) Rules,
1957
Central Sales Tax Non-submission of 3.87 Financial Year
2005-06
ÃC Form
(Orissa) Rules,
1957
Orissa Value Reversal of 16.90 Financial Year
2005-06
Consignment
Sale, Input Tax
Credit on
Stock
Added Tax
Act, 2005
Orissa Entry Tax Adhoc freight 2.54 Financial Year
2004-05
addition for
calculating
landed cost
Act, 1999
Orissa Entry Tax Purchase of coal 43.57 Financial Year
2005-06
and coke
including freight
Act, 1999
Orissa Sales Tax Non-payment of 0.01 Financial Year
2004-05
Surcharge
Act, 1947
West Bengal Sales Tax Incorrectly 10.08 Financial Year
2003-04
assessed Gross
Turnover
Act, 1994
Name of the statute Forum where the dispute is pending
Income Tax Act, 1961 The Commissioner of Income Tax Appeals,
Kolkata, West Bengal
Income Tax Act, 1961 The Commissioner of Income Tax Appeals,
Kolkata, West Bengal
Income Tax Act, 1961 The Commissioner of Income Tax Appeals,
Bhubaneswar, Orissa
Central Sales Tax
(Orissa) Rules, 1957 Sales Tax Tribunal, Orissa, Appeal
Central Sales Tax
(Orissa) Rules, 1957 The Asst. Commissioner of Sales Tax
(Appeal), Jajpur Range, Jajpur Road,
Orissa
Central Sales Tax
(Orissa) Rules, 1957 The Commissioner of Commercial Taxes,
Cuttack, Orissa
Orissa Value Added Tax
Act, 2005 The Commissioner of Commercial Taxes,
Cuttack, Orissa
Orissa Entry Tax
Act, 1999 The Asst. Commissioner of Sales Tax
(Appeals), Jajpur Range, Jajpur Road,
Orissa
Orissa Entry Tax
Act, 1999 The Commissioner of Commercial Taxes,
Cuttack, Orissa
Orissa Sales Tax
Act, 1947 The Asst. Commissioner of Sales Tax
(Appeals), Jajpur Range, Jajpur Road,
Orissa
West Bengal Sales Tax
Act, 1994 The Asst. Commissioner of Commercial
Taxes, (Appellate and Revisional Board),
Kolkata, West Bengal
10. The Company has no accumulated losses as at 31 March 2010 and it
has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year.
11. According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at the balance sheet date.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit fund /
nidhi / mutual benefit fund / societies are not applicable to the
Company.
14. In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments.
15. In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
16. In our opinion, and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
17. On the basis of an overall examination of the balance sheet of the
Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on a short-term
basis which have been used for long-term investment.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. The Company has not issued any debenture during the period and
accordingly the question of creation of security or charge does not
arise.
20. The Company has not raised any money by public issues during the
year.
21. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any 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 Lovelock & Lewes
Firm Registration Number : 301056E
Chartered Accountants
Partha Mitra
Place: Kolkata Partner
Date: 19 May 2010 Membership Number 50553
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