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Ankit Metal & Power Ltd.

BSE: 532870 Sector: Metals & Mining
NSE: ANKITMETAL ISIN Code: INE106I01010
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VOLUME 18656
52-Week high 2.68
52-Week low 1.15
P/E
Mkt Cap.(Rs cr) 19
Buy Price 1.35
Buy Qty 11554.00
Sell Price 1.37
Sell Qty 9290.00
OPEN 1.39
CLOSE 1.35
VOLUME 18656
52-Week high 2.68
52-Week low 1.15
P/E
Mkt Cap.(Rs cr) 19
Buy Price 1.35
Buy Qty 11554.00
Sell Price 1.37
Sell Qty 9290.00

Ankit Metal & Power Ltd. (ANKITMETAL) - Auditors Report

Company auditors report

TO

THE MEMBERS

ANKIT METAL & POWER LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of ANKIT METAL & POWERLIMITED ("the Company") which comprise the Balance Sheet as at 31st March2016 the Statement of Profit and Loss and the Cash Flow Statement for the year ended onthat date and a summary of significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matter stated in Section 134(5)of the Companies Act 2013 ("the Act") with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flow of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 of the Act read with rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provision of the Act for safeguarding the assets of the Company and for preventing anddetecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accounting recordsrelevant to the preparation and presentation of the financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

We have taken into account the provisions of the Act the Accounting and AuditingStandards and matters which are required to be included in the audit report under theprovisions of the Act and the rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe 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 of the financialstatements that give a true and fair view in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made bymanagement as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the said accounts give the information required by the Act in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India:

(a) In the case of Balance Sheet of the state of affairs of the Company as at March31 2016;

(b) In the case of Statement of Profit and Loss of the loss of the Company for theyear ended on that date; and

(c) In the case of Cash Flow Statement of the cash flows of the Company for the yearended on that date.

Emphasis of Matter

1. We draw your attention to Note No. 30 of the Financial statements which indicatethat as at 31st March 2016 the accumulated losses amounting to Rs. 45639.68 Lacs haseroded the entire net worth of the Company indicating the existence of a materialuncertainty about the Company's ability to continue as a going concern. These financialstatements have been prepared on a going concern basis for the reasons stated in the saidnote.

2. We draw your attention to Note No. 35 of the financial statements the Company hasraised during the year debit notes of Rs. 1432.00 Lacs on various suppliers which are yetto be acknowledged by the respective suppliers. Pending such acknowledgement the Companyhas recognised the same in the books. If these debit notes are not acknowledged it wouldhave resulted in increase of purchases creditor's balances material consumption and lossfor the year by the said amount.

3. In general it was noticed that applicable statutory dues were not deposited withindue dates to the respective authorities. Substantial amount of statutory dues amounting toRs. 1736.37 Lacs has become overdue and remain unpaid. Interest penalty if any inrespect of the same remains unascertained and unaccounted for.

4. As referred in Note No. 34 of the financial statements the balance of sundrydebtors advances creditors etc. includes balances remaining outstanding for asubstantial period. The balances are subject to confirmations and reconciliation. Thereported financials might have consequential impact which remains unascertained.

Our report is not qualified in this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order 2015 ('the order') issued bythe Central Government of India in terms of sub-section (11) of the section 143 of theAct we give in the "Annexure A" a statement on the matters specified in theparagraphs 3 and 4 of the order to the extent applicable.

2. As required by section 143(3) of the Act we report to the extent applicable 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 it 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 in agreement with the books of account;

d. In our opinion the financial statements comply with the Accounting Standardsspecified under section 133 of the Companies Act 2013; read with rule 7 of the Companies(Accounts) Rules 2014.

e. On the basis of written representations received from the directors as on 31stMarch 2016 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director in terms ofsection 164(2) of the Act.

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B" and

g. With respect to the other matters to be included in the Auditor's Report inaccordance with rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on the financialposition in the financial statements - Refer Note No. 31 (c) to (i) to its financialstatements.

ii. The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. During the year Company has not transferred an amount of Rs. 1.08 Lacs toInvestor Education and Protection Fund pertaining to dividend for the year 2006-07.

For R.Kothari & Company
Chartered Accountants
FRN:307069E
Manoj Kumar Sethia
Place: Kolkata Partner
Date : 30.05.2016 Membership No. : 064308

Annexure to the Independent Auditor's Report

The Annexure A referred to in paragraph 1 under the heading 'Report on Other Legal& Regulatory Requirements' of our report of even date to the financial statements ofthe Company for the year ended 31st March 2016 we report that:

(i) (a) The company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets of the Company have been physically verified by the managementduring the year and no material discrepancies were noticed on such verification. In ouropinion is reasonable having regard to the size of the Company and nature of its assets.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

(ii) The inventory has been physically verified by the management during the year atreasonable intervals and the discrepancies noticed on verification between the physicalstocks and the book records were not material having regard to the size of the operationsof the Company and the same have been properly dealt with in the books of account.

(iii) The Company has not granted any loans secured or unsecured to companies firmsor other parties listed in the register maintained under section 189 of the Companies Act2013. Therefore the reporting under Paragraph 3 (iii) of the said Order is not applicableto the Company.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Companies Act 2013in respect of grant of loans making investments and providing guarantees and securitiesas applicable.

(v) The Company has not accepted any deposits from the public and consequently thedirectives issued by Reserve Bank of India and provisions of section 73 to section 76 orany other relevant provisions of the Companies Act 2013 and the Companies (Acceptance ofDeposit) Rules 2015 with regard to the deposits accepted from the public are notapplicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company in respectof manufacture of Iron & Steel product and Power generation unit pursuant to the rulesmade by the Central Government for the maintenance of cost records under section 148(1) ofthe Companies Act 2013 and we are of the opinion that prima facie the records have beenmaintained. We have however not made a detailed examination for the records with a view todetermining whether they are accurate and complete.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the books of accounts the Company has generally been delayed indepositing undisputed statutory dues including Provident Fund Income Tax Sales TaxService Tax Duty of Customs Value Added Tax Cess and other statutory dues during theyear with appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of the above were in arrears as at 31st March 2016 for a period ofmore than six months from the date on when they become payable except the following:

(Rs. in Lacs)

SI. No. Nature of Dues Amount involved
1 Income Tax Deducted at Source 55.85
2 Sales Tax Deducted at Source 0.32
3 Withholding Tax 1.39
TOTAL 57.56

(b) According to the information and explanations given to us there are no dues ofIncome Tax Sales Tax Value Added Tax Service Tax Customs Duty Excise Duty and Cesswhich have not been deposited with the appropriate authorities on account of any disputeexcept the following cases:

Name of the Statute Nature of Dues Amount (' in Lacs ) Period to which the amount relates Forum where the dispute is pending
Income Tax Act 1961 Income Tax 25.28 (Petition filed under section 154) A.Y. 2009-10 Deputy Commissioner/Additional Commissioner of Income Tax - Circle 3 Kolkata
6692.78 A.Y. 2012-13 Deputy Commissioner/Additional Commissioner of Income Tax - Circle 3 Kolkata
222.89 F.Y. 2005-06 Sr. Joint Commissioner of Commercial Taxes Dharmtala circle.
917.91 F.Y. 2006-07 Sr. Joint Commissioner of Commercial Taxes Dharmtala circle.
W.B. VAT Act 2003 Sales Tax 358.16 F.Y. 2007-08 Sr. Joint Commissioner of Commercial Taxes Dharmtala circle.
1946.82 F.Y. 2008-09 Sr. Joint Commissioner of Commercial Taxes Dharmtala circle.
29.27 F.Y. 2009-10 Sr. Joint Commissioner of Commercial Taxes Dharmtala circle.
112.72 F.Y. 2012-13 Sr. Joint Commissioner of Commercial Taxes Bow Bazar circle.
36.66 September 2007 - January 2008 Joint Commissioner Central Excise Bolpur Commissionerate
14.95 (15.00 paid as duty under protest) A.Y. 2012-13 Directorate General of Central Excise Intelligence Kolkata
5.15 (5.00 paid as duty under protest) A.Y. 2011-12 Commissioner of Central Excise Bolpur
4.32 July 2007- October 2007 Additional Commissioner of Central Excise & Service Tax Durgapur
The Central Excise Act 1944 Excise Duty 37.46 (30.00 paid as duty under protest) A.Y. 2006-07 A.Y. 2007-08 A.Y. 2008-09 Joint Commissioner Central Excise Bolpur Commissionerate
75.51 A.Y. 2008-09 A.Y. 2009-10 Joint Commissioner Central Excise Bolpur Commissionerate
132.60 A.Y. 2008-09 A.Y. 2009-10 Joint Commissioner Central Excise Bolpur Commissionerate
73.05 August 2009 to February 2011 Joint Commissioner Central Excise Bolpur Commissionerate
1809.48 Director General Central Excise Delhi
9.09 Additional Commissioner Central Excise Bolpur Commissionerate
59.36 Joint Commissioner Central Excise Durgapur Commissionerate

There were no other dues of duty which have not been deposited as at 31st March 2016on account of dispute.

(viii) Based upon the audit procedures performed and according to the records of theCompany examined by us and the information and explanation given to us the Company hasdefaulted in payment of interest on borrowings to banks as follows:

Nature of Borrowings Particulars Amount of default as at the Balance Sheet Date (' in Lacs) Period of default
FITL State Bank of India 202.57 October 15 to March 16
Indian Overseas Bank 75.88 December 15 to March 16
State Bank of Travancore 87.97 September 15 to March 16
UCO Bank 46.40 October 15 to March 16
Andhra Bank 4.01 December 15 to March 16
IDBI Bank 5.01 January 16 to March 16
Syndicate Bank 9.30 October 15 to March 16
State Bank of Mysore 51.45 October 15 to March 16
State Bank of Hyderabad 22.19 November 15 to March 16
Corporation Bank 35.40 January 16 to March 16
State Bank of Bikaner & Jaipur 8.29 March 16
United Bank of India 38.13 October 15 to March 16
Allahabad Bank 69.43 October 15 to March 16
State Bank of Patiala 3.18 February 16 to March 16
TOTAL 659.20
WCTL-1 State Bank of India 22.47 February 16 to March 16
Indian Overseas Bank 33.78 February 16 to March 16
State Bank of Travancore 4.82 December 15 to March 16
UCO Bank 37.04 February 16 to March 16
Andhra Bank 3.42 December 15 to March 16
IDBI Bank 6.23 January 16 to March 16
Syndicate Bank 8.63 February 16 to March 16
State Bank of Hyderabad 8.29 February 16 to March 16
Corporation Bank 0.10 March 16
State Bank of Bikaner & Jaipur 8.86 March 16
United Bank of India 5.42 December 15 to March 16
Allahabad Bank 117.65 November 15 to March 16
TOTAL 256.71
WCTL-2 State Bank of India 101.49 February 16 to March 16
State Bank of Travancore 24.03 January 16 to March 16
UCO Bank 15.10 February 16 to March 16
IDBI Bank 7.16 January 16 to March 16
State Bank of Mysore 10.12 February 16 to March 16
State Bank of Hyderabad 15.18 February 16 to March 16
Corporation Bank 7.42 March 16
State Bank of Bikaner & Jaipur 5.00 March 16
United Bank of India 26.20 December 15 to March 16
TOTAL 211.70
TERM LOAN State Bank Of India 149.81 December 15 to March 16
Indian Overseas Bank 101.34 February 16 to March 16
State Bank of Travancore 166.51 January 16 to March 16
State Bank of Mysore 69.73 February 16 to March 16
State Bank Of Hyderabad 19.92 January 16 to March 16
Corporation Bank 48.11 March 16
State Bank of Bikaner & Jaipur 21.35 March 16
United Bank of India 71.93 December 15 to March 16
Allahabad Bank 215.32 November 15 to March 16
State Bank of Patiala 14.49 February 16 to March 16
TOTAL 878.52
Cash Credit State Bank of India 1289.65 September 15 to March 16
Indian Overseas Bank 81.23 December 15 to March 16
State Bank of Travancore 97.38 November 15 to March 16
UCO Bank 271.09 September 15 to March 16
Andhra Bank 62.32 December 15 to March 16
IDBI Bank 71.07 December 15 to March 16
Syndicate Bank 86.55 November 15 to March 16
State Bank of Mysore 34.13 October 15 to March 16
State Bank Of Hyderabad 63.28 October 15 to March 16
Corporation Bank 46.15 December 15 to March 16
State Bank of Bikaner & Jaipur 67.30 December 15 to March 16
United Bank of India 78.84 October 15 to March 16
Allahabad Bank 164.09 November 15 to March 16
TOTAL 2413.07
Grand Total 4419.20

(ix) Based upon the audit procedures performed and the information and explanationsgiven by the management the Company has not raised moneys by way of Initial PublicIssue/Follow-on Offer (including debt instruments) and term loans.

(x) Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year.

(xi) Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act 2013.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Therefore the reporting under Paragraph 3 (xii) of theOrder is not applicable to the Company.

(xiii) In our opinion and according to the information and explanations given to usall transactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the financialstatements etc as required by the applicable Accounting Standards.

(xiv) The Company has made preferential allotment of 190.35 Lacs equity shares duringthe year under review. Based upon the audit procedures performed and the information andexplanation given by the management the requirement of section 42 of the Companies Act2013 have been complied and the amount raised have been used for the purposes for whichthe funds were raised.

(xv) Based upon the audit procedures performed and the information and explanationsgiven by the management the Company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the reporting under Paragraph 3 (xv)of the Order is not applicable to the Company and hence not commented upon.

(xvi) In our opinion the Company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934.

For R.Kothari & Company
Chartered Accountants
FRN: 307069E
Manoj Kumar Sethia
Place: Kolkata Partner
Date: 30.05.2016 Membership No.064308

Report on the Internal Financial Controls Over Financial Reporting under clause (i) ofsub-section 3 of section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of M/s. ANKITMETAL & POWER LIMITED ("the Company") as of 31st March 2016 in conjunctionwith our audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by The Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") issued by The Institute of Chartered Accountants of Indiaand the Standards on Auditing issued by ICAI and prescribed under section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controlsboth applicable to an audit of internal financial controls and both issued by TheInstitute of Chartered Accountants of India. Those standards and the guidance note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by The Institute of CharteredAccountants of India.

For R.Kothari & Company
Chartered Accountants
FRN:307069E
Manoj Kumar Sethia
Place: Kolkata Partner
Date: 30.05.2016 Membership No.064308