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Balasore Alloys Ltd.

BSE: 513142 Sector: Metals & Mining
NSE: ISPATALLOY ISIN Code: INE135A01024
BSE LIVE 15:48 | 21 Jul 56.15 -0.55
(-0.97%)
OPEN

56.55

HIGH

57.40

LOW

55.60

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 56.55
PREVIOUS CLOSE 56.70
VOLUME 131639
52-Week high 77.20
52-Week low 19.50
P/E 5.58
Mkt Cap.(Rs cr) 499
Buy Price 56.15
Buy Qty 392.00
Sell Price 0.00
Sell Qty 0.00
OPEN 56.55
CLOSE 56.70
VOLUME 131639
52-Week high 77.20
52-Week low 19.50
P/E 5.58
Mkt Cap.(Rs cr) 499
Buy Price 56.15
Buy Qty 392.00
Sell Price 0.00
Sell Qty 0.00

Balasore Alloys Ltd. (ISPATALLOY) - Auditors Report

Company auditors report

TO THE MEMBERS OF BALASORE ALLOYS LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of BALASORE ALLOYSLIMITED ("the Company") which comprise the Balance Sheet as at 31 March2016 the Statement of Profit and Loss and the Cash Flow Statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsprescribed under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

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 thereunder and the Order under section 143 (11)of the Act.

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone financial statements are free frommaterial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31 March 2016 and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to Note 30 to the standalone financial statements regarding demand byNorth Eastern Electricity Supply Company of Orissa Limited (NESCO) towards revocation ofthe waiver of dues granted under a settlement in earlier years to Company. NESCO hasraised total claim for Rs. 16800.34 Lacs as at 31st March 2016 (Rs. 16699.05 Lacs as at31st March 2015) (including delayed payment surcharge) towards revocation of the waiverof dues granted under a settlement in an earlier year net of Rs 3400 lacs already paidand provided in respective year of payment as a matter of prudence by the Company. Thematter of revocation of settlement is pending with Hon'ble High Court of Orissa. Pendingoutcome of the court decision and based on discussion with Company's legal counsel noprovision has been made towards above demand.

Our Opinion is not qualified in respect of the same.

Report on Other Legal and Regulatory Requirements

1. 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 bestof 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 theCompany 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 Statementdealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31March 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2016 from being appointed as a director in terms of Section164 (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 - A.

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 its financialposition in its standalone financial statements as referred to in Note 26 and 29 to 30 tothe standalone financial statements.

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

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For Chaturvedi & Shah
Chartered Accountants
Firm Registration No. 101720W
Amit Chaturvedi
Place : Kolkata Partner
Date : May 30 2016 Membership No. 103141

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT ON THE STANDALONE FINANCIALSTATEMENTS OF BALASORE ALLOYS LIMITED

(Referred to in paragraph 1 (f) under 'Report on Other Legal and RegulatoryRequirements' of our report of even date)

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 BALASOREALLOYS LIMITED ("the Company") as of 31 March 2016 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

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 Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditor's 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 and the Standards on Auditing prescribed under Section 143(10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material 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 judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

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 standalone financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standalonefinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the standalonefinancial 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31 March 2016 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note.

For Chaturvedi & Shah
Chartered Accountants
Firm Registration No. 101720W
Amit Chaturvedi
Place : Kolkata Partner
Date : May 30 2016 Membership No. 103141

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT ON

THE STANDALONE FINANCIAL STATEMENTS OF BALASORE ALLOYS LIMITED

(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)

i. In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanation given to us no material discrepancies were noticed on suchverification.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deeds provided to us we reportthat the title deeds comprising all the immovable properties of lands which arefreehold are held in the name of the Company as at the balance sheet date except certainportion of land which company is in process of getting in his name. In respect ofimmovable properties of land that have been taken on lease and disclosed as fixed asset inthe financial statements the lease agreements for the said lands and building thereof arein the name of the Company except certain building which is pending for title clearance.

ii. In our opinion the inventories were physically verified during the year by theManagement at reasonable intervals and as explained to us no material discrepancies werenoticed on physical verification.

iii. In respect of the loans secured or unsecured granted by the company to companiescovered in the register maintained under

Section 189 of the Act:

a. The terms and conditions of the grant of such loans are in our opinion primafacie not prejudicial to the Company's interest.

b. The repayment of principal and payment of interest are as per stipulated terms.

c. In respect of the said loan there are no overdue amounts at the end of the year.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of

Sections 185 and 186 of the Act in respect of grant of loans making investments andproviding guarantees and securities as applicable.

v. According to the information and explanations given to us the Company has notaccepted any deposit within the meaning of provisions of sections 73 to 76 or any otherrelevant provisions of the Act and the rules framed thereunder. Therefore the provisionsof clause (v) of paragraph 3 of the Order are not applicable to the Company.

vi. The maintenance of cost records has been specified by the Central Government undersection 148(1) of the Act. We have broadly reviewed the cost records maintained bythe Company pursuant to the Companies (Cost Records and Audit) Rules 2014 prescribed bythe Central Government under Section 148(1) (d) of the Act and are of the opinion thatprima facie the prescribed - cost records have been maintained. We have however notmade a detailed examination of the cost records with a view to determine whether they areaccurate or complete.

vii. In respect of statutory dues:

a. According to the records of the Company undisputed statutory dues includingProvident Fund Employees' State

Insurance Income-Tax Sales Tax Wealth Tax Service Tax Customs Duty Excise DutyValue Added Tax Cess and any other statutory dues have been regularly deposited with theappropriate authorities except Income-Tax service tax and excise duty. According to theinformation and explanations given to us undisputed amounts in respect of the Statutorydues referred above outstanding as at 31st March 2016 for a period of more than sixmonths from the date they became payable are as under:

Nature of Dues Amount Period to which
(RS in Lacs) amount Relates
Income Tax 431.60 AY 2014-15
Income Tax 2511.12 AY 2015-16
Income Tax (Advance Tax) 404.85 AY 2016-17
Total 3347.57

b) The disputed statutory dues aggregating RS 2281.79 Lacs that have not beendeposited on account of disputed matters pending before appropriate authorities are asunder :

Sl. Name of the No. statute Nature of the Dues Amount (RS in Lacs) Period to which the amount relates Forum where dispute is pending
1. Income Tax Act 1961 Income Tax (including interest) 137.51 2012-13 Commissioner of Income Tax (Appeal)
2. Central Sales Tax Act 1956 and Orissa Sales Tax Act Sales Tax/VAT (including interest and Penalty) 70.92 10.66 1997-98 1995-97 & 2011-13 Sales Tax Appellate Tribunal Additional Commissioner
437.97 2007-2013 Orissa High Court Cuttack
3. Entry Tax Act 1999 Entry Tax 807.06 2008-14 Additional Commissioner
92.96 2007-13 Orissa High Court Cuttack
4. Central Excise Act 1944 Excise Duty (including interest) 51.45 2010-2013 Commissioner Appeals
5. Chapter V of Finance Act 1994 Service Tax 6.80 2005-2007 Orissa High Court Cuttack
666.46 1996-1998 & 2004-2012 Central Excise & Service Tax Appellate Tribunal
Total 2281.79

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loans to banks and dues to debentureholders. The Company has not borrowed any funds from financial institutions.

ix. In our opinion and according to the information and explanations given to us termloans have been applied by the Company during the year for the purposes for which theywere raised. The Company has not raised moneys by way of initial public offer or furtherpublic offer during the year.

x. Based on the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and as per information and explanations given to usno fraud by the Company and no fraud on the Company by its officers or employees has beennoticed or reported during the year.

xi. In our opinion and according to the information and explanations given to us theCompany has paid managerial remuneration in accordance with the requisite approvalsmandated by the provisions of section 197 read with Schedule V to the Act.

xii. The Company is not a Nidhi Company and hence reporting under clause (xii) ofparagraph 3 of the Order is not applicable to the company.

xiii. In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 188 and 177 of the Act where applicable for alltransactions with the related parties and the details of related party transactions havebeen disclosed in the financial statements etc. as required by the applicable accountingstandards.

xiv. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of paragraph 3 of the Order is not applicable to the Company.

xv. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected and covered under section 192 of the Act. Hence clause(xv) of paragraph 3 of the Order is not applicable to the Company.

xvi. In our opinion and according to information and explanations provided to us theCompany is not required to be registered under section 45-I of the Reserve Bank of IndiaAct 1934.

For Chaturvedi & Shah
Chartered Accountants
Firm Registration No. 101720W
Amit Chaturvedi
Place : Kolkata Partner
Date : May 30 2016 Membership No. 103141