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Bengal Steel Industries Ltd.

BSE: 512404 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE523W01017
BSE 05:30 | 01 Jan Bengal Steel Industries Ltd
NSE 05:30 | 01 Jan Bengal Steel Industries Ltd

Bengal Steel Industries Ltd. (BENGALSTEEL) - Auditors Report

Company auditors report

TO HIE MEMBERS OF BENGAL STEEL INDUSTRIES LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of BENGAL STEEL INDUSTRIESLIMITED ("the Company") which comprise the Balance Sheet as at 31st March2017 the Statement of Profit and Loss the Cash Flow Statement and a summary of thesignificant accounting policies and other explanatory information for the year then ended.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act foi safeguarding the assets of the Company and for preventingand detecting 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 accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditors* 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 underthe provisions of the Act and the Rules made there under. We conducted our audit inaccordance with the Standards on Auditing specified under Section 143( 10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat arc appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof 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 standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally acccpted in India of the state of affairs of the Company as at 31March 2017 and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

Without qualifying our opinion we draw attention to the following:

1. Charge of depreciation on the composite cost of Land & Building the value ofwhich are no segregated:

2. Non-recognition of impairment loss if any on discontinuation of operation anddisposal of fixed assets of ingot plant.

3. Non-Provision in diminution in value of investments the amount of which could notbe ascertained with reasonable accuracy.

Report on Other Legal and Regulatory Requirements

i. 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 financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules. 2014.

e) On the basis of the written representations received from the directors as on 31stMarch. 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March. 2017 from being appointed as a director in terms of Section164 (2) of the Act.

0 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 respcct 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 two litigations namely for Corporation Tax and Income Tax which arebeing pursued by the company. The management docs not foresee any material loss in respectof these litigations.

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.

iv. The company has provided requisite disclosures in its financial statements as toholding as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016 and these disclosures are in accordance with books of accountsmaintained by the company.

2. As required the Companies (Auditor Report) Order 2016 ("the order" )issued by the Central Government in term of Section 143(11) of the Act we give in theAnnexure-B a statement on the matters specified in paragraphs 3 and 4 of the order.

ANNEXUR-A TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTSOF BENGAL S TEEL INDUSTRIES LTD.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the ( ompanies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of BengalSteel Industries Ltd. ("the Company") as of March 31 2017 in conjunction withour 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 Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company- considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required 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") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act. 2013. to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. 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 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 control 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 relied 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 control system over financial reporting and such internal financial control overfinancial reporting were operating effectively as at March 31 2017 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

ANNEXURE -B TO THE INDEPENDENT AUDITOR'S REPORT (Referred to in paragraph 1 under‘Report on other legal and regulatory requirements' section of our report of evendate)

As required by Companies (Auditors' Report) Order 2016 issued by the Central Govt ofIndia under section Section 143(11) of the Companies Act. 2013 and on the basis of suchchecks of the books and records of the Company and according to the information andexplanations given to us we report further that :

\) The Company has not maintained proper records showing full particulars includingquantitative (details and situation of Fixed Assets. The Fixed Assets do not appear tohave been physically verified by the Management during the year under Audit and thereforethe question of discrepancy on physical verification could not be determined. The titledeeds of inmovable properties are not available for verification.

2) The company does not have any inventory.

3) The company does not have any loans investment guarantees or security as mentionedunder section 185 or 186 of the Companies Act. 2013.

4) a. The Company is regular in depositing undisputed statutory dues with theappropriate authorities so far as applicable to its affairs during the year except forCorporation Tax liability in respect of immovable property remaining unpaid due to disputein rate fixation.

b. Disputed income tax dues for A.Y. 2012-13 of Rs.2.96790 pending in appeal before CIT(A)-4. Kolkata has not been deposited.

5) We have not noticed nor have been reported any fraud on or by officers or employeesof the Company during the year under audit.

6) The company has not paid any managerial remuneration except sitting fees ofDirectors which is as per requisite approvals/statute.

7) Transactions with related parties are in compliance with section 177 or 188 ofCompanies Act. 2013. as applicable and the details have been disclosed in Note 20 ofFinancial Statements as requited by the applicable accounting standards.

8) The company has not entered into any non-cash transaction with Directors or personsconnected with him.

9) Clauses (iii) (v) ( vi) (viii) (ix) (xii) (xiv). (xvi) of paragraph 3 andparagraph 4 of the order are not applicable to the Company for this year.

For J.N. BANERJEE & CO.
Chartered Accountants
(Firm'sRegistration No. 302063E)
Kolkata 700 001. (G. BANERJEE F.C.A.)
Date:27 Apr 2017 Partner Membership No 050270