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Kanishk Steel Industries Ltd.

BSE: 513456 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE791E01018
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OPEN 7.50
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VOLUME 500
52-Week high 12.84
52-Week low 4.51
P/E 75.00
Mkt Cap.(Rs cr) 21
Buy Price 0.00
Buy Qty 0.00
Sell Price 7.50
Sell Qty 300.00
OPEN 7.50
CLOSE 7.50
VOLUME 500
52-Week high 12.84
52-Week low 4.51
P/E 75.00
Mkt Cap.(Rs cr) 21
Buy Price 0.00
Buy Qty 0.00
Sell Price 7.50
Sell Qty 300.00

Kanishk Steel Industries Ltd. (KANISHKSTEEL) - Auditors Report

Company auditors report

To the Members of KANISHK STEEL INDUSTRIES LIMITED Report on the StandaloneFinancial Statements

We have audited the accompanying standalone financial statements of Kanishk SteelIndustries Limited (‘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 signi_cant accounting policies and other explanatory information.

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 preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance and cash _ows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards speci_ed under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgements and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement 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 there under. We conducted our audit in accordancewith the Standards on Auditing speci_ed under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement. An audit involves performing procedures to obtain audit evidence about theamounts and the disclosures in the financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company's preparation ofthe financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances. An audit also includes evaluatingthe appropriateness of the accounting policies used and the reasonableness of theaccounting estimates made by the Company's Directors as well as evaluating the overallpresentation of the financial statements.

We believe that the audit evidence we have obtained is suf_cient 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 _ows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters speci_ed in theparagraph 3 and 4 of the Order.

2. As required by Section 143 (3) of the Act we report that: a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit; b) In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books; c) The Balance sheet the statement of Profit and Loss and theCash Flow Statement dealt 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 speci_ed under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014; e) On the basis of the written representations receivedfrom the directors as on 31 March 2016 taken on record by the Board of Directors none ofthe directors is disquali_ed as on 31 March 2016 from being appointed as a director interms of Section 164 (2) of the Act; f) With respect to the adequacy of the internalfinancial controls over financial reporting of the company and the operating effectivenessof such controls refer to our separate report in "Annexure B"; and g) Withrespect to other matters to be included in the Auditor's Report in accordance with Rule 11of the Companies(Audit and Auditors) Rules 2014 in our opinion and to the best of ourinformation and according to the explanations given to us; i. The Company has disclosedthe impact of pending litigations on its financial position in its financial statements– Refer Note 26 (ii) of Additional information to the financial statements; ii. TheCompany did not have any long-term contracts including derivative contracts for whichthere were any material foreseeable losses under the applicable law or accountingstandards; iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

For CHATURVEDI & COMPANY

CHARTERED ACCOUNTANTS

FRN 302137E

S GanesanFCA

PLACE: Chennai PARTNER DATE: May 30 2016. Membership No. 217119

Annexure A to the Auditors' Report

The Annexure referred to in Independent Auditor's Report to the members of the Companyon the standalone financial statements for the year ended 31 March 2016 we report that:(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets. (b) As explained to us all the FixedAssets have been physically veri_ed by the management at reasonable intervals during theyear. According to the information and explanations given to us no material discrepancieswere noticed on such veri_cation. In our opinion this periodicity of Physical veri_cationis reasonable having regard to the size of the Company and the 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) (a) As explained to us the management has conducted physical veri_cation ofInventories during the year at reasonable intervals. According to the information andexplanations given to us no material discrepancy were noticed on physical veri_cation(iii) As per the information and explanation given to us and as per the records producedto us the Company has not granted any secured or unsecured loans to companies _rms orother parties covered in the register maintained under section 189 of the Companies Act2013 (‘the Act'). Accordingly the provisions of clause 3 (iii) (a) to (c) of theOrder are not applicable to the Company and hence not commented upon. (iv) In our opinionand according to the information and explanations given to us the company has compliedwith the provisions of section 185 and 186 of the Companies Act 2013 with respect ofinvestments made. (v) The Company has not accepted any deposits from the public (vi) Wehave broadly reviewed the books of account maintained by the company in respect of theproducts pursuant to the rule made by the Central Government of India regarding themaintenance of cost records and we are of the opinion that prima facie the prescribedaccount and records have been made and maintained. We have not however made a detailedexamination of records with a view to determine whether they are accurate or complete.

(vii) (a) The Company is regular in depositing undisputed statutory dues includingProvident Fund Employees' State Insurance Income Tax Sales Tax Wealth Tax ServiceTax Customs Duty Excise Duty Value Added Tax Cess and other statutory dues with theappropriate authorities wherever applicable and no dues are pending for a period of morethan six months from the date they become payable.

(b) According to the information and explanations given to us there are no materialdues of sales tax income tax customs duty wealth tax service tax excise duty vatcess and other material statutory dues as applicable which have not been deposited withthe appropriate authorities on account of any dispute. However according to theinformation and explanations given to us the following dues of Excise Duty have not beendeposited by the Company on account of disputes (also refer point no. 26 (ii) ofAdditional information to the standalone Financial statements).

Statute Name Nature of dues Amount in Rs. Forum where dispute is pending
Central Excise Law(SCN No.2268/95 dated 25.07.1995) Dispute relating to deemed Credit Rs.234094/- Commissioner of Central Excise (Appeals) Chennai.
Central Excise Law Dispute relating to re-_xation of Annual capacity of erstwhile OP Steels Limited Rs.3566000/- Plus equal amount of penalty Honb'le High Court of Madras.
Central Excise Law (SCN No.2/06 dt 17.1.2006) Dispute relating to differential duty on depot sales. Rs.5238000/- (total demand plus interest and penalty Rs.8725000/- and Rs.3487000/- already paid) Honb'le High Court of Madras.
Central Excise Law Dispute relating to re-_xation of Annual capacity Rs.900000/- Plus equal amount of penalty plus interest thereon. Honb'le High Court of Madras.
Central Excise Law Dispute relating to Central Excise duty Rs.6906945/- plus equal amount of penalty plus interest thereon + Rs. 500000/- _ne (total demand Rs.19325930/- and Rs.13645721/- paid there-against) CESTAT Chennai

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of dues to banks. The Company did not haveany outstanding dues to financial institutions or debenture holders during the year. (ix)Based upon the audit procedures performed and the information and explanations given bythe management the company has not raised moneys by way of initial public offer orfurther public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company. (x) Based uponthe audit procedures performed and the information and explanations given by themanagement we report that no fraud by the Company or on the company by its of_cers oremployees 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; (xii) In our opinion the Company is not a NidhiCompany. Therefore the provisions of clause 4 (xii) of the Order are not applicable tothe Company.

(xiii) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards. (xiv) Based uponthe audit procedures performed and the information and explanations given by themanagement the company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.Accordingly the provisions of clause 3 (xiv) of the Order are not applicable to theCompany. (xv) Based upon the audit procedures performed and the information andexplanations given by the management the company has not entered into any non-cashtransactions with directors or persons connected with him. Accordingly the provisions ofclause 3 (xv) of the Order are not applicable to the Company. (xvi) In our opinion thecompany is not required to be registered under section 45 IA of the Reserve Bank of IndiaAct 1934 and accordingly the provisions of clause 3 (xvi) of the Order are notapplicable to the Company.

For CHATURVEDI & COMPANY

CHARTERED ACCOUNTANTS

FRN 302137E

S GANESANFCA

PLACE: Chennai PARTNER DATE: 30 May 2016. Membership No. 217119

"Annexure B" to the Independent Auditor's Report

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

We have audited the internal financial controls over financial reporting of KanishkSteel Industries Limited ("the Company") as of March 31 2016 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat 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').Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and ef_cientconduct 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 auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. 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. We believe thatthe audit evidence we have obtained is suf_cient and appropriate to provide a basis forour audit opinion on the Company's internal financial controls system over financialreporting.

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 generally acceptedaccounting principles. A company's internal financial control over financial reportingincludes those policies and procedures that (1) pertain to the maintenance of recordsthat in reasonable detail accurately and fairly re_ect the transactions and dispositionsof the assets of the company; (2) provide reasonable assurance that transactions arerecorded as necessary to permit preparation of financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorizations of management and directorsof the company; and (3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assets thatcould 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 March 31 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 CHATURVEDI & COMPANY

CHARTERED ACCOUNTANTS

FRN 302137E

S GanesanFCA

PLACE: Chennai PARTNER DATE: 30 May 2016. Membership No. 217119