TO THE MEMBERS OF
THE ANIL SPECIAL STEEL INDUSTRIES LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of Anil Special SteelIndustries Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2014 and the Statement of Profit and Loss and Cash Flow Statement for the yearthen ended and a summary of significant accounting policies and other explanatoryinformation.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give atrue and fair view of the financial position financial performance and cash flows of theCompany in accordance with the Accounting Principles generally accepted in India includingAccounting Standards referred to in sub-section (3C) of section 211of the Companies Act1956("the Act").This responsibility includes the design implementation andmaintenance of internal control relevant to the preparation and presentation of thefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted cur audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal control relevant to the Company's preparation and fair presentation ofthe financial statements in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by management aswell as evaluating the overall presentation of the financial statements. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour qualified audit opinion.
Basis for Qualified Opinion
a) The Company is accounting the bonus & leave pay on cash basis. The accountingpolicy not being in consonance with accrual method of accounting. Accordingly bonusaccrued for the year Rs.159038/- and leave pay accrued up to 31st March'2014Rs.4925602/- as per actuarial valuation remain un-provided for. (Refer Note No. 1(J)and 1(1)).
b) Nonpayment/provision of contribution to Gratuity fund with Life InsuranceCorporation of India (up to 31st March2014) Rs.26621346/-. (Refer Note No. 1(1)).
c) Non ascertainment of diminution in value of unquoted investment of Rs.3470000 andprovision required to be made. (Refer Note No.12.1).
d) The addition to Deferred TaxAsset for the year Rs. 37670171- and CumulativeRs. 11778996/- up to 31st March'2014. (Refer Note No. 13.2) e) The company has changedits depreciation method [ Refer Note No.1.(b).(iii) & (iv) ] during the financial year2013-14.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph the aforesaid financial statements give the information required by theAct in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:
(a) In the case of the Balance Sheet of the state of affairs of the Company as atMarch 31 2014;
(b) In the case of the Statement of Profit and Loss of the profit for the year endedon that date; and
(c) In the case of the Cash Flow Statement of the cash flows for the year ended onthat date.
Emphasis of Matter
We draw attention to Note no. 5.1 that company is relocating its industrial undertakingfrom Kanakpura Jaipur and has entered into sale agreement for sale of land & buildingand has taken advance amount of Rs. 184739207-. Our opinion is not qualified in respectof this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2003 ("the Order")issued by the Central Government of India in terms of sub-section (4A) of section 227 ofthe Act we give in the Annexure a statement on the matters specified in paragraphs 4 and5 of the Order.
2. As required by section 227(3) of the Act we report that:
a. We have obtained all the information and explanations which to the best of ourknowledge 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 theCompany so far as appears from our examination of those books;
c. The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are n agreement with the books of account;
d. Except for the effects of the matter described in the Basis for Qualified Opinionparagraph in our opinion the Balance Sheet Statement of Profit and Loss and Cash FlowStatement comply with the accounting standards referred to in sub-section (3C) of section211 of the Act;
e. On the basis of written representations received from the directors as on March 312014 and taken on record by the Board of Directors none of the directors aredisqualified as on March 31 2014 from being appointed as a director in terms of clause(g) of sub-section (1) of section 274 of the Act.
For Bansal R. Kumar & Associates
Membership No. 089796
Date : 14th June 2014
Annexure to the Auditors' Report
(Referred to in paragraph (3) of our report of even date)
Referred to in paragraph under the heading of "Report on other Legal &Regulatory Requirements" of our report of even date to the Members of ANIL SPECIALSTEEL INDUSTRIES LIMITED:
(i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets
b) A major portion of the assets has been physically verified by the Management inaccordance with a phased programme of verification adopted by the Company. In our opinionthe frequency of verification is reasonable having regard to the size of the Company andthe nature of its assets. To the best of our knowledge no material discrepancies havebeen noticed on such verification.
c) There was substantial disposal of fixed assets during the year (refer. Note No.11.3The company is relocating its running industrial undertaking (Unit-1 mfg. Flat RolledProducts division) from Kanakpura Jaipur and entered into sale agreement and has receivedan advance of Rs.184739207- for sale of land & building.
(ii) a) The inventory of finished goods and work in progress and raw materials at workshave been physically verified during the year by the Management at reasonable intervals.In respect of stores and spare parts and stocks at branches the Company has a programmeof verification of stocks at the end of year.
b) In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.
c) In our opinion and according to the information and explanations given to us theCompany is maintaining proper records of its inventories. The discrepancies noticed onverification between the physical stocks and the book records were not material and havebeen properly dealt with in the Books of Accounts.
(iii) (a) In our opinion and according to information and explanation given to us theCompany has not granted any loan secured or unsecured to the Companies firms or otherparties covered in the register maintained under Section 301 of the Companies Act 1956during the year hence clause (b)(c)(d) of the order is not applicable to the company.
(e) In our opinion and according to information and explanations given to us theCompany has taken unsecured loans from one party covered in the register maintained undersection 301 of the Companies Act 1956. The maximum amount outstanding during the year wasRs.31549768/- and year ended balance is Rs. nil.
(f) The terms on which such loan is taken are not prima facie prejudicial to theinterest of the Company as these are interest free.
(g) The repayment of principal is being done as per stipulation.
(iv) In our opinion and according to the information and explanations given to usthere is an adequate internal control procedure commensurate with the size of the Companyand the nature of its business for purchases of inventory fixed assets and sale of goodsand services. During the course of our audit we have not observed major weakness ininternal control system.
(v) a) To the best of our knowledge and belief and according to the information andexplanations given to us we are of the opinion that the contract or arrangements thatneed to be entered into the register maintained under Section 301 of the Companies Act1956 have been so entered.
b) In our opinion and according to the information and explanation given to us therewere no transactions made in pursuance of contracts or arrangements entered in theregisters maintained under Section 301 and exceeding the value of five lakh rupees inrespect of any party during the year.
(vi) As per explanation given to us the company has availed temporary interest freeunsecured loans from the related parties bodies corporate and others to maintain marginsrequired bythe bankers/ Financial Institutions.
In our opinion the company is yet to comply with the provisions of section 58 A of theCompanies Act 1956 and Rules made there under.
(vii) In our opinion the Company is having internal audit system; however same need tobe strengthened so as to be commensurate with the size and nature of its business.
(viii) As per information given to us the company has maintained cost records asprescribed under section 209(1)(d) of the Companies Act 1956 as prescribed by theCentral Government. However we have not made detailed examination of such records.
(ix) a) The Company is generally regular in depositing undisputed statutory duesincluding Provident Fund Investor Education and Protection Fund Employee StateInsurance Income tax Sales tax Wealth tax Service tax Custom duty and other statutorydues with the appropriate authorities to the extent applicable except the amount towardsProvident Fund of Rs. 3858731/- which is outstanding for more than 6 months as at theend of financial year.
b) According to the records of the Company there are no dues of Income Tax WealthTax Custom Duty Excise Duty Sales Tax and Service Tax which have not been deposited onaccount of any dispute other than the following.
|Name of the Statute ||Nature of the dues ||Amount ||Forum where dispute is pending |
|The Central Sales Tax Act 1956 ||Sales tax & penalty 1985-86 ||613340V- ||Pending with Tax Board |
|The Central Sales Tax Act 1956 ||Sales tax & penalty 1986-87 ||438845/- ||Pending with Tax Board |
|The Central Excise Act 1944 ||Export Benefits claim 2005-06 ||12.21.097/- ||Pending with CESTAT Delhi |
|The Central Excise Act 1944 ||Duty demand on insurance claim of Gear Box 2001-02 ||89.600/- ||Pending with CESTAT Delhi |
|The Central Excise Act 1944 ||Excise Duty on stock 2012-13 ||3008388/- ||Pending with Excise Deptt. |
However the company has paid Rs.1052185/- against the demand of Central Sales Taxand Rs. 3008388/-against excise duty on stock till 31st March 2014.
(x) The Company has no accumulated losses as on 31st March 2014. The Company has notincurred any cash losses during the financial year and in the immediately precedingfinancial year
(xi) In our opinion and according to the information and explanations given to us theCompany hasnot defaulted in repayment of dues to Banks as on 31st March 2014.
(xii) According to the information and explanations given to us the Company has notgranted loans and advances on the basis of security by way of pledge of shares debenturesand other securities. Therefore the provisions of clause 4(xii) of the Companies(Auditor's Report) Order 2003 are not applicable to the Company
(xiii) In our opinion the Company is not a chit fund or a nidhi mutual benefit fund/society. Therefore the provisions of clause 4(xiii) of the Companies (Auditor's Report)Order 2003 are not applicable to the Company
(xiv) The Company has maintained proper records of the transactions and contracts inrespect of dealing in mutual funds and timely entries have been made there in. All theinvestments have been held by the company in its own name. As informed to us the Companyis not dealing/trading in shares debentures and other investments.
(xv) In our opinion the Company has not given guarantees for loans taken by others
(xvi) As per explanation given to us the Company has not raised new term loans duringthe year
(xvii) According to the information and explanations given to us and on an overallexamination of the Balance Sheet of the Company considering the effect of currentmaturities of long term borrowings we report that no funds raised on short-term basis havebeen used for long-term assets
(xviii) According to the information and explanations given to us the company has notmade any preferential allotment of shares during the year.
(xix) The company has not issued any debentures during the year.
(xx) During the year covered by our audit report the Company has not raised any moneyby public issues
(xxi) To the best of our knowledge and belief and according to the information andexplanations given to us no fraud on or by the Company has been noticed or reportedduring the course of our audit.
For Bansal R. Kumar & Associates
Membership No. 089796
Date: 14th June 2014