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Modern Steels Ltd.

BSE: 513303 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE001F01019
BSE LIVE 15:40 | 11 Dec 17.65 0.05
(0.28%)
OPEN

17.60

HIGH

17.70

LOW

17.50

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 17.60
PREVIOUS CLOSE 17.60
VOLUME 678
52-Week high 21.50
52-Week low 5.65
P/E
Mkt Cap.(Rs cr) 24
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 17.60
CLOSE 17.60
VOLUME 678
52-Week high 21.50
52-Week low 5.65
P/E
Mkt Cap.(Rs cr) 24
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Modern Steels Ltd. (MODERNSTEEL) - Auditors Report

Company auditors report

To

The Members of Modern Steels Limited

Report on the Financial Statements

1. We have audited the accompanying financial statements of Modern Steels Limitedwhich comprise the Balance Sheet as at 31st March 2016 the Statement of Profit and Lossand Cash Flow Statement for the year ended and a summary of significant accountingpolicies and other explanatory information.

Management’s Responsibility for the Financial Statements

2. The Company’s Board of Directors is responsible for the matters stated inSection 134(5) of the Companies Act 2013 with respect to the preparation and presentationof these 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.

Auditors’ Responsibility

3. 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 there under.

4. 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.

5. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the financial statements. The procedures selected depend on theauditor’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’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on whether the Company has in place an adequate internal financialcontrols system over financial reporting and the operating effectiveness of such controls.An audit also includes evaluating the appropriateness of the accounting policies used andthe reasonableness of the accounting estimates made by the Company’s Directors aswell as evaluating the overall presentation of the financial statements.

6. 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

7. In o.ur 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 accepted in India:

(a) In the case of the Balance Sheet of the state of affairs of the Company as at 31stMarch 2016;

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give in the Annexure a statement on the matters specified inthe paragraph 3 and 4 of the Order to the extent applicable.

2. As required by Section 143(3) of the Act we report 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 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 Balance Sheet the Statement of Profit and Loss and the CashFlow Statement comply with Accounting Standards specified under section 133 of the Actread with Rule 7 The Companies (Accounts) Rules 2014.

e. On the basis of the written representations received from the Directors as on 31stMarch 2016 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 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 financial statements

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For Aaryaa & Associates
Chartered Accountants
Firm Registration No. 0015935N
Krishan Joshi
Place: Chandigarh Partner
Dated: 28th May 2016 M. No. 094478

ANNEXURE 1 TO THE AUDITORS’ REPORT

The Annexure referred to in our report to the members of the Company for the year ended31st March 2016. To the best of our knowledge and belief and information &explanation given to us we further report that:- 1. a) The Company has maintained properrecords to show full particulars including quantitative details & situation of itsfixed assets.

b) As explained to us the fixed assets have

been physically verified by the management at reasonable intervals which in our opinionis appropriate having regards to size of the Company and nature of its assets. No materialdiscrepancies have been noticed during the year.

c) The title deeds of immovable properties are held

in the name of the Company.

2. a) The inventory of the Company has been

physically verified by the management at reasonable intervals during the year b) Nomaterial discrepancies were noticed.

3. The Company has granted loans secured or unsecured to Companies Firms or otherparties covered in the Register maintained under Section 189 of the Companies Act 2013.The same is mentioned herein as per the information and explanation given to us by themanagement.

a) The Company has granted unsecured loan

to Modern Automotive Limited during the year. The maximum amount involved during theyear is 7 1.86 crores &year end outstanding is 7 1.86 crores.

b) The rate of interest and other term & conditions

of the above loan is in our opinion not prima facie prejudicial to the interest ofthe Company.

c) The receipts of principal amounts and interest

have been regular as per stipulations.

d) There was no overdue amount.

4. In respect of loans investments guarantee and security the provisions of Section185 and 186 of the Companies Act 2013 have been complied with.

5. The Company has accepted deposits from directors amount 7 2.88 crores as well asfrom corporate bodies amounting to 73.73 crores. As per CDR report the amount of 7 3.50crores need to be infused &72.38 crores needed to be retained separately in form ofunsecured loans by the Company. The Company has complied with the directives issued by theReserve Bank of India & with the provisions of Section 73 to 76 of the Companies Act2013 and the rules framed there under with regard to the deposits accepted from thepublic. No order has been passed by the Company Law Board or National Company Law Tribunalor Reserve Bank of India or any court or any other Tribunal.

6. On the basis of records produced to us we are of the opinion that prima facie thecost records prescribed by the Central Government of India under section 148(1) of the Acthave been made & maintained & also cost audit will be conducted in due course oftime. We have not carried out any detailed examination of such Account & records.

7. (a) According to the books and records as produced and examined by us in accordancewith generally accepted auditing practices in India and also based on Managementrepresentations undisputed statutory dues in respect of Provident Fund Employee’sState Insurance dues Investor Education and Protection Fund Income Tax Service TaxCess and other material statutory dues have generally been regularly deposited by theCompany during the year with the appropriate authorities in India and there were no arrearoutstanding in respect of above for a period of more than six month as on 31.03.2016.

(b) According to the records of the Company examined by us and the information andexplanations given to us there are no dues of sales tax income tax customs dutyservice tax excise duty and cess which have not been deposited on account of any disputeother than the following amounting to ^1.93 crores. The details are as under:-

NATURE OF DUES/NAME OF STATUTES FORUM WHERE DISPUTE IS PENDING YEAR DISPUTED AMOUNT (Rs)
EXCISE DUTY
CENTRAL EXCISE ACT 1944 PUNJAB AND HARYANA HIGH COURT 1989-90 647885
CENTRAL EXCISE ACT 1944 COMMISSIONER (APPEALS) CHANDIGARH 2007-08 256533
CENTRAL EXCISE ACT 1944 COMMISSIONER (APPEALS) CHANDIGARH 2007-08 to 2008-09 259085
CENTRAL EXCISE ACT 1944 COMMISSIONER (APPEALS) CHANDIGARH 2004-05 to 2006-07 8956212
CENTRAL EXCISE ACT 1944 CESTAT NEW DELHI 2004-05 78579
CENTRAL EXCISE ACT 1944 CESTAT NEW DELHI 2002-03 to 2004-05 1587580
CENTRAL EXCISE ACT 1944 CESTAT NEW DELHI 2005-06 to 2006-07 1130998
CENTRAL EXCISE ACT 1944 COMMISSIONER (APPEALS) CHANDIGARH 2007-08 264934
CENTRAL EXCISE ACT 1944 COMMISSIONER (APPEALS) CHANDIGARH 2007-08 to 2008-09 311332
CENTRAL EXCISE ACT 1944 CESTAT NEW DELHI 2004-05 to 2005-06 355235
CENTRAL EXCISE ACT 1944 CESTAT NEW DELHI 2008-09 110550
CENTRAL EXCISE ACT 1944 CESTAT NEW DELHI 2003-04 to 2007-08 2078246
CENTRAL EXCISE ACT 1944 COMMISSIONER (APPEALS) CHANDIGARH 2004-05 516272
CUSTOMS DUTY
CUSTOMS ACT 1962 CESTAT AHMEDABAD 2004-05 2535450
INCOME TAX
INCOME TAX ACT 1961 INCOME TAX APPELLATE TRIBUNAL CHANDIGARH

A/Y 2005-06 & 2006-07

164482

8. There are dues payable to financial institutions but not to debenture holders.During the year ended 31st March 2016 the Company has defaulted on timely payment ofprincipal and payment of interest on term loans and cash credits. The lender wise delaywith respect to interest and principal is as under:

T in lacs

Particulars Default within 30 days Default between 30 to 90 days Default for more than 90 days
State bank of India:
Term Loan
- Principal - 348.51 156.66
- Interest 2.30 402.01 ' 70.41
Cash Credit
-Interest 209.06 163.82 -
Punjab National Bank:
Term Loan
-Principal - 228.27 29.00
-Interest - 227.83 22.19
Cash Credit
-Interest 122.11 68.96 -
State Bank of Patiala:
Term Loan -Principal 161.12
-Interest 8.38 129.10 -
Cash Credit
-Interest 131.42 44.84 -
Canara Bank:
Term Loan
-Principal - 108.26 -
-Interest 12.33 87.01 2.69
Cash Credit
-Interest 39.39 69.40 -

Apart from above as on the date of balance sheet the Company had not paid thefollowing amounts having become due as on 31s' March 2016.

T in lacs

Name of Bank Principal Installment Interest on Term Loan Interest on Cash Credit limit
State Bank of India 119.09 41.50 36.28
Punjab National Bank 59.20 22.37 20.82
State Bank of Patiala 33.08 12.16 14.68
Canara Bank 27.02 8.92 6.85

9. The Company did not raise money by way of initial public offer or further publicoffer (including debt instruments and term loans) during the year.

10. As per the information and explanation given to us and on the basis of examinationof records no material fraud on or by the Company was noticed during the course of ouraudit.

11. The Company has paid or provided managerial remuneration in accordance with therequisite approval mandated by the provisions of section 197 read with schedule V to theCompanies Act 2013.

12. In our opinion considering the nature of activities carried on by the Companyduring the year the provisions of any special/statute applicable to Nidhi Company are notapplicable to it.

13. All transactions with related parties are in accordance with section 177 and 188 ofthe Companies Act 2013 and details have been disclosed in the financial statements asrequired by the applicable accounting standards.

14. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review.

15. The Company has not entered into any non cash transactions with directors orpersons connected with him during the year under review.

16. The Company is not required to be registered under section 45-IA of the ReserveBank of India 1934.

For Aaryaa & Associates

Chartered Accountants Firm Registration No. 0015935N

Krishan Joshi
Place: Chandigarh Partner
Dated: 28h May 2016 M. No.094478

ANNEXURE 2 TO THE INDEPENDENT AUDITOR’S

REPORT ONTHE INTERNAL FINANCIAL CONTROLS

UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION

143 OF THE COMPANIES ACT 2013

1. In conjunction with our audit of the financial statements of Modern Steels Limited("the Company") as of and for the year ended 31st March 2016 we have auditedthe internal financial controls over financial reporting (IFCoFR) of the company of as ofthat date.

Management’s Responsibility for Internal Financial

Controls

2. 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 the company’s business including adherence to company’s policiesthe safeguarding 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 Act.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on the Company’s IFCoFR based onour audit. We conducted our audit in accordance with the Standards on Auditing issued bythe Institute of Chartered Accountants of India (ICAI) and deemed to be prescribed underSection 143(10) of the Act to the extent applicable to an audit of IFCoFR and theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") issued by the ICAI. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate IFCoFR were established and maintained and ifsuch controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the IFCoFR and their operating effectiveness. Our audit of

IFCoFR included obtaining an understanding of IFCoFR assessing the risk that amaterial 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 judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company’s IFCoFR.

Meaning of Internal Financial Controls over Financial

Reporting

6. A Company’s IFCoFR is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with Generally Accepted AccountingPrinciples. A Company's IFCoFR includes those policies and procedures that (1) pertain tothe maintenance 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 financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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

7. Because of the inherent limitations of IFCoFR including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of the IFCoFRto future periods are subject to the risk that IFCoFR may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.

Opinion

8. In our opinion the Company has in all material respects adequate internalfinancial controls over financial reporting and such internal financial controls overfinancial 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.

ForAaryaa & Associates
Chartered Accountants
Firm Registration No. 0015935N

 

Krishan Joshi
Place: Chandigarh Partner
Dated: 28th May 2016 M. No.094478