To The Members of
M/S. BHUWALKA STEEL INDUSTRIES LIMITED REPORT ON THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of BHUWALKA STEELINDUSTRIES
LIMITED ("the Company") which comprise the Balance
Sheet as at 31st March 2015 the Statement of Profit and Loss the Cash Flow Statementfor the year then ended and a summary of the significant accounting policies and otherexplanatory information.
MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIALSTATEMENTS
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 Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies ( Accounts )Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial 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 standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder. 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 evidenceabout the amounts and the disclosures in the financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal financial control relevant to theCompany's preparation of the financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances but not for thepurpose of expressing an opinion on whether the Company has in place an adequate internalfinancial controls system over financial reporting and the operating effectiveness of suchcontrols. An audit also includes evaluating the appropriateness of the accounting policiesused and the reasonableness of the accounting estimates made by the Company's Directorsas well as evaluating the overall presentation of the financial statements. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the standalone financial statements.
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 2015 its Loss and its cash flows for the year ended on that date.
EMPHASIS OF MATTER
We draw attention to:
1. Note 23 Sl No.7 (i) Other disclosure in respect of Finance cost not recognized inthe books by the company for Rs.422411280/- in view of representation by managementthat they have disputed on account of unilateral withdrawal of CDR Package by the Banks.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies ( Auditor's Report) Order 2015 ( "theOrder") issued by the Central
Government in terms of Section 143(11) of the Act we give in the Annexure a statementon the matters specified in paragraphs 3 and 4 of the Order.
2. 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 specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
(e) On the basis of the written representations received from the directors as on 31stMarch 2015 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2015 from being appointed as a director in terms of Section164 (2) of the Act.
(e) 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:
a. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 23 serial number 01(iii) and serialnumber 07 to the financial statements;
b. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;
c. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
for ASR Associates
(CA A. S. Rafiq )
FRN No. 8877S
ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements' 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) Some of the fixed assets were physically verified during the year by the Managementin accordance with a programme of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanations given to us no material discrepancies were noticed on suchverification.
(ii) In respect of its inventories:
(a) As explained to us the inventories were physically verified during the year by theManagement at reasonable intervals. Based on information explanation and necessarydocuments pertaining to inventory like Excise Inventory registers Physical verificationreport conducted by management and other supporting documents provided to us we reportthat the management has conducted physical verification of Inventory at reasonableintervals.
(b) In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the Management werereasonable 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 has maintained proper records of its inventories and no material discrepancieswere noticed on physical verification.
(iii) The Company has not granted any loans secured or unsecured to companies firmsor other parties covered in the Register maintained under Section 189 of the CompaniesAct 2013.
(iv) In our opinion and according to the information and explanations given to usthere is an adequate internal control system commensurate with the size of the Company andthe nature of its business for the purchase of inventory and fixed assets and for the saleof goods and services and during the course of our audit we have not observed any majorweakness in such internal control system.
(v ) According to the information and explanations given to us the Company has notaccepted any deposit during the year.
(vi) We have broadly reviewed the cost records maintained by the Company pursuant tothe Companies (Cost Records and Audit) Rules 2014 as amended and prescribed by theCentral Government under subsection (1) of Section 148 of the Companies Act 2013 and areof the opinion that prima facie the prescribed cost records have been made andmaintained. We have however not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.
(vii)According to the information and explanations given to us in respect of statutorydues:
a) The Company has generally been regular in depositing undisputed statutory duesexcept as mentioned in table below including Provident Fund Employees' State InsuranceIncome-tax Sales Tax Service
Tax Wealth Tax Customs Duty Excise Duty Value Added Tax Cess and other materialstatutory dues applicable to it with the appropriate authorities.
|Sl.No ||Particulars ||Amount ( Rs.) |
|1 ||EPF ||4138183 |
|2 ||ESI ||1216929 |
|3 ||TDS || |
| ||a) TDS CONTRACT ||1049217 |
| ||b) TDS ON SALARY ||368090 |
| ||c ) TDS ON RENT ||541374 |
| ||d) TDS ON PROF. & CONST. ||1651896 |
| ||e) TDS ON INTEREST ||3194553 |
| ||f) TDS ON Commission or Brokarage ||15395 |
| ||g) TCS ON Scrap ||44243 |
|4 ||SERVICE TAX Payable on GTA and Others ||3001582 |
|5 ||VAT ||8930825 |
|6 ||Profession Tax ||358500 |
| ||Total Rs. ||24510787 |
(a) There were undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income-tax Sales Tax Wealth Tax Service Tax Customs Duty ExciseDuty Value Added Tax Cess and other material statutory dues in arrears as at 31 March2015 for a period of more than six months.
|Nature of dues ||Period pertaining to ||Amount Rs. ||Due date ||Date of payment ||Nos. of days delayed |
|TDS ||Apr-13 ||28415 ||5/7/2013 ||Pending ||693 |
|TDS ||May-13 ||58797 ||6/7/2013 ||Pending ||662 |
|TDS ||Jun-13 ||89936 ||7/7/2013 ||Pending ||632 |
|TDS ||Jul-13 ||86793 ||8/7/2013 ||Pending ||601 |
|TDS ||Aug-13 ||60224 ||9/7/2013 ||Pending ||570 |
|TDS ||Sep-13 ||71231 ||10/7/2013 ||Pending ||540 |
|TDS ||Oct-13 ||72516 ||11/7/2013 ||Pending ||509 |
|TDS ||Nov-13 ||144073 ||12/7/2013 ||Pending ||479 |
|TDS ||Dec-13 ||1082579 ||1/7/2014 ||Pending ||448 |
|TDS ||Jan-14 ||159679 ||2/7/2014 ||Pending ||417 |
|TDS ||Feb-14 ||77649 ||3/7/2014 ||Pending ||389 |
|TDS ||Mar-14 ||634670 ||4/7/2014 ||Pending ||358 |
|TDS ||Apr-14 ||101399 ||5/7/2014 ||Pending ||328 |
|TDS ||May-14 ||117374 ||6/7/2014 ||Pending ||297 |
|TDS ||Jun-14 ||175676 ||7/7/2014 ||Pending ||267 |
|TDS ||Jul-14 ||151057 ||8/7/2014 ||Pending ||236 |
|TDS ||Aug-14 ||230919 ||9/7/2014 ||Pending ||205 |
|Service Tax ||Mar-14 ||625158 ||4/5/2014 ||Pending ||360 |
|Service Tax ||Apr-14 ||6251 ||5/5/2014 ||Pending ||330 |
|Service Tax ||May-14 ||130049 ||6/5/2014 ||Pending ||299 |
|Service Tax ||Jun-14 ||150798 ||7/5/2014 ||Pending ||269 |
|Service Tax ||Jul-14 ||134817 ||8/5/2014 ||Pending ||238 |
|Service Tax ||Aug-14 ||161851 ||9/5/2014 ||Pending ||207 |
|EPF ||Sep-13 ||129291 ||10/15/2013 ||Pending ||532 |
|EPF ||Oct-13 ||129926 ||11/15/2013 ||Pending ||501 |
|EPF ||Nov-13 ||130368 ||12/15/2013 ||Pending ||471 |
|EPF ||Dec-13 ||331074 ||1/15/2014 ||Pending ||440 |
|EPF ||Jan-14 ||260505 ||2/15/2014 ||Pending ||409 |
|EPF ||Feb-14 ||258877 ||3/15/2014 ||Pending ||381 |
|EPF ||Mar-14 ||244953 ||4/15/2014 ||Pending ||350 |
|EPF ||Apr-14 ||228728 ||5/15/2014 ||Pending ||320 |
|EPF ||May-14 ||232330 ||6/15/2014 ||Pending ||289 |
|EPF ||Jun-14 ||111297 ||7/15/2014 ||Pending ||259 |
|EPF ||Jul-14 ||210863 ||8/15/2014 ||Pending ||228 |
|EPF ||Aug-14 ||204566 ||9/15/2014 ||Pending ||197 |
|ESI ||Oct-13 ||80407 ||11/20/2013 ||Pending ||496 |
|ESI ||Nov-13 ||82339 ||12/20/2013 ||Pending ||466 |
|ESI ||Dec-13 ||75253 ||1/20/2014 ||Pending ||435 |
|ESI ||Jan-14 ||78675 ||2/20/2014 ||Pending ||404 |
|ESI ||Feb-14 ||81000 ||3/20/2014 ||Pending ||376 |
|ESI ||Mar-14 ||80000 ||4/20/2014 ||Pending ||345 |
|ESI ||Apr-14 ||80530 ||5/20/2014 ||Pending ||315 |
|ESI ||May-14 ||82117 ||6/20/2014 ||Pending ||284 |
|ESI ||Jun-14 ||83118 ||7/20/2014 ||Pending ||254 |
|ESI ||Jul-14 ||84036 ||8/20/2014 ||Pending ||223 |
|ESI ||Aug-14 ||84036 ||9/20/2014 ||Pending ||192 |
|Profession Tax ||Mar-14 ||120475 ||4/20/2014 ||Pending ||345 |
|Profession Tax ||Apr-14 ||23425 ||5/20/2014 ||Pending ||315 |
|Profession Tax ||May-14 ||22400 ||6/20/2014 ||Pending ||284 |
|Profession Tax ||Jun-14 ||20300 ||7/20/2014 ||Pending ||254 |
|Profession Tax ||Jul-14 ||18575 ||8/20/2014 ||Pending ||223 |
|Profession Tax ||Aug-14 ||17575 ||9/20/2014 ||Pending ||192 |
|KVAT ||Mar-14 ||148551 ||5/20/2014 ||Pending ||315 |
| ||Total Rs. ||8287501 || || || |
(c ) Details of dues of Income-tax Sales Tax Wealth Tax Service Tax Customs DutyExcise Duty Value Added Tax and Cess which have not been deposited as on 31 March 2015 onaccount of disputes are given below :-
|Sr. No. ||Name of the Statute ||Nature of Dues ||Forum where dispute is pending ||Amount (Rs.in lakhs) |
|1 ||Central Excise Act 1944 ||Excise Duty and service tax ||Commissioner of Central Excise ( Appeals) CESTAT High Court Supreme Court ||885.12 |
|2 ||Income Tax Act 1961 ||Income Tax ||Commissioner of Income Tax ( Appeals) ITAT ||116.70 |
(d) The Company has been regular in transferring amounts to the Investor Education andProtection Fund in accordance with the relevant provisions of the Companies Act 1956 (1of 1956) and Rules made thereunder within time.
(viii) The Company have accumulated losses at the end of the financial year is Rs1004.29Lakhs and the Company has incurred cash losses of Rs 76.69Lakhs during thefinancial year covered by our audit and in the immediately preceding financial year forRs. 2221.26Lacs.
Due to losses the Net Worth of the company has eroded by more than 50% (without givingeffect to the observation in Note 23 (7)(i)). The company has already filed Form C withBIFR.
(ix) In our opinion and according to the information and explanations given to us theCompany has defaulted in the repayment of dues to financial institutions banks asmentioned in Note 23 (7)(ii).
(x ) In our opinion and according to the information and explanations given to us theterms and conditions of the guarantees given by the Company for loans taken by others frombanks and financial institutions are not prima facie prejudicial to the interests of theCompany.
(xi) In our opinion and according to the information and explanations given to us theterm loans have been applied by the Company during the year for the purposes for whichthey were obtained other than temporary deployment pending application.
(xii) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company has been noticedor reported during the year.
| ||for ASR Associates |
| ||Chartered Accountants |
|Place : Bangalore ||(CA A. S. Rafiq ) |
|Date : 11th July 2015 ||Proprietor |
| ||Membership No.204646 |
| ||FRN No. 8877S |