To The Members of
Report on the Financial Statements
We have audited the accompanying standalone financial statements of NOVA IRON &STEEL LIMITEDwhich comprise the Balance Sheet as at 31st March 2016the Statement ofProfit and Loss and the Cash Flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information for the year then ended.
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act2013 ("The Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financialpositionfinancial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in Indiaincluding the Accounting Standardsspecified under Section 133 of the Actread with Rule 7 of the Companies(Accounts)Rules2014.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 irregularitiesselection and application ofappropriate accounting policiesmaking judgments and estimates that are reasonable andprudentand designimplementation and maintenance of adequate internal financialcontrolsthat were operating effectively for ensuring the accuracy and completeness of theaccounting recordsrelevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatementwhetherdue to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit.We have taken into account the provision of the Actthe accounting standards and thematters which are required to be included in the audit report under the provision of theact and the Rules made thereunder.We conducted our audit in accordance with the Standardson Auditing under Section 143(10) of the Act.Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the standalone financial statements.The procedures selected depend on theauditors judgmentincluding the assessment of the risks of material misstatement ofthe standalone financial statementswhether due to fraud or error.In making those riskassessmentsthe auditor considers internal financial control relevant to theCompanys preparation of the financial statements that give a true and fair view inorderto 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 Companys Directorsas well asevaluating the overall presentation of 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.
In our opinion and to the best of our information and according to the explanationsgiven to uswe report that the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair viewinconformity with the accounting principles generally accepted in India: -
a) in the case of the Balance Sheetof the state of affairs of the Company as at 31 stMarch2016;
b) in the case of the Statement of Profit and Lossof the Loss for the year ended onthat date; and
c) in the case of Cash Flow Statementof cash flows for the year ended on that date;
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order2015("theOrder") issued by the Central Government of India in terms of sub-section 11 ofsection 143 of the Actwe give in Annexure - Aa statement on the matters specified inparagraphs 3 and 4 of the orderto the extent applicable.
2. As required by Section 143(3) of the Actwe 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 purpose of ouraudit.
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from ourexamination of those books;
c) The Balance Sheet and Statement of Profit and Loss and Cash Flow Statement dealtwith by this report are in agreement with the books of account;
d) In our opinionthe aforesaid standalone financial statements comply with theAccounting Standards specified under section 133 of the Actread with Rule 7 of theCompanies (Accounts) Rules2014;
e) On the basis of the written representations received from the Directors as on 31 stMarch2016 and taken on record by the Board of Directorsnone of the directors isdisqualified as on 31st March2016from 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 controlsrefer to our
separate report in Annexure B; and
g) With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules2014in 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 financial positionin its 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.
ANNEXURE: A TO THE INDEPENDENT AUDITORS REPORT
The Annexure referred to in independent auditors report to the members of NOVAIRON & STEEL LIMITED ("the Company") on the standalone financial statementsfor the year ended March 31st2016.We report that:
I. In Respect of its Fixed Assets:
a) The company has maintained proper records showing full particularsincludingquantitative details and situation of fixed assets.
b) The Fixed Assets have been physically verified by the management in a phasedmannerdesigned to cover all the items over a period of three yearswhich in ouropinionis reasonable having regard to the size of the company and nature of itsbusiness.Pursuant to the programa portion of the fixed asset has been physically verifiedby the management during the year and no material discrepancies between the books recordsand the physical fixed assets have been noticed.
c) According to the information and explanation given to us during the course of ouraudit the title deeds of immovable properties are held in the name of the company ExceptRegistration of Freehold Land amounting to Rs.19434130/- is pending in the name of theCompany.
II. In Respect of its Inventory:
a) The management has conducted the physical verification of inventory at reasonableintervals.
b) As informed to us no material discrepancies were found on physical verification ofInventory.
III. The Company has not granted any loanssecured or unsecured to companiesfirms orother parties listed in Register maintained u/s 189 of the Companies Act2013.Thereforethe provisions of Clause 3(iii)(a) to (c) of the said Order are not applicable to theCompany.
IV. In our opinion and according to the information and explanations given to usthecompany has complied with the provisions of section 185 and I86 of the Companies Act2013In respect of loansinvestmentsguaranteesand security.
V. The Company has generally not accepted any deposits from the public and hence thedirectives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 orany other relevant provisions of the Act and the Companies (Acceptance of Deposit)Rules2015 with regard to the deposits accepted from the public are not applicable.
VI. To the best of our knowledgethe Central Government has prescribed the maintenanceof cost records under Section 148(1) of the Companies Act2013which have been maintainedby the company and these have been broadly reviewed by us and we are of the opinionthatprima faciethe prescribed accounts and records have been made andmaintained.Howeverwe have notnor we are requiredcarried out any detailed examination ofsuch accounts and records.
VII. In respect of statutory dues:
a) According to information and explanations given to us and on the basis of ourexamination of the books of accountand recordsthe Company has been generally regular indepositing undisputed statutory dues including Provident FundEmployees StateInsuranceIncome- TaxSales taxService TaxDuty of CustomsDuty of ExciseValue addedTaxCess and any other statutory dues with the appropriate authorities.According to theinformation and explanations given to usno undisputed amounts payable in respect of theabove were in arrears as at March 31st2016 for a period of more than six months from thedate they become payableExcept Entry Tax (including interest due) & Service Taxamounting to Rs.34244722/- & Rs.2140012/- respectively.
b) According to records of the Companythere are no undisputed dues outstanding ofCustom DutyService TaxCess etc.on account of any disputeExcept Sales Tax(VAT)IncomeTax and Excise Dutyas per details given below: -
|Nature of the statute ||Nature of dues ||Net of amount paid (Rs.In Lacs) ||Period to which amount related ||Forum where dispute Is pending |
|Excise Duty ||Modvat Credit Disallowed ||72.62 Plus Penalty ||A.Y.2004-05 ||Appeal filed with Custom Excise & Service Tax Appellate TribunalNew Delhi. |
|Excise Duty ||Demand ||2.90 ||A.Y.2007-08 ||Commissioner Central Excise. |
|Excise Duty ||Demand ||57.58 ||Oct-1999 To March - 2004 ||Commissioner of Central Excise - Raipur. |
|Excise Duty ||Demand ||126.70 ||April-2007 To July-2011 ||Commissioner of Central Excise - Raipur. |
|Excise Duty ||Modvat Credit Disallowed ||2.90 ||March-2012 To December - 2013 ||Commissioner Appeal - Raipur. |
|Excise Duty ||Modvat Credit Disallowed ||14.93 ||November - 2008 To March -2009 ||Add.Commissioner- Raipur |
|Excise Duty ||Demand ||1.29 ||June-2014 to July-2014 ||Asstt.Commissioner - Bi las pur. |
|Income Tax ||Demand ||18.70 ||A.Y.1994-95 ||Appeal Pending before ITAT. |
|Income Tax ||Demand ||143.38 ||A.Y.2007-08 ||Appeal Pending before ITAT |
|VAT ||Demand ||2.23 ||A.Y.2004-05 ||Commissioner of Commercial Tax. |
|VAT ||Demand ||0.25 ||A.Y.2006-07 ||Revision Pending with Asstt.Commissioner of Commercial Tax. |
|VAT ||Demand ||530.60 ||A.Y.2003-04 ||Revision filed before Add I.Comm.Commercial Tax was filed and order was issued in favour of the Company Case remanded back to A.C.Commercial Tax. |
|VAT ||Demand ||594.08 ||A.Y.2004-05 ||Revision filed before Addl.Comm.Commercial Tax was filed and order was issued in favour of the Company Case remanded Tax. |
|Entry Tax ||Tax Demand ||5.05 ||A.Y.2006-07 ||Revision Pending with Addl.Commissioner of Commercial Tax |
VIII. Based on our audit procedure and In accordance with the Information andexplanation given to us by the management the Company has not defaulted In repayment ofdues to Financial Institutions or Banks or Debenture holders.
IX. Based upon the audit procedures performed and the Information and explanationsgiven by the managementthe company has not raised moneys by way of Initial public offeror further public offer including debt instruments and term Loans.Accordinglytheprovisions of clause 3 (ix) of the Order are not applicable to the Company.
X. According to the information and explanations given to usno material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.
XI. According to the information and explanations given to us by the managementthemanagerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct.
XII. In our opinion and according to the information and explanations given to us bythe managementthe Company is not a Nidhi Company.Accordingly paragraph 3(xii)ofthe Orderis not applicable.
XIII. According to the information and explanations given to us by the management andbased on our examination of the records of the Companyall transactions with the relatedparties are in compliance with Sections 177 and 188 of the Act where applicable and thedetails of such transactions have been disclosed in the financial statements as requiredby the applicable accounting standards.
XIV. According to the information and explanations given to us by the management andbased on our examination of the records of the Companythe Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year.
XV. According to the information and explanations given to us by the management andbased on our examination of the records of the Companythe Company has not entered intonon-cash transactions with directors or person connected with him.Accordinglyparagraph3(xv) of the order is not applicable.
XVI. The Company is not required to be registered under section 45-IAof the ReserveBank of India Act1934.
ANNEXURE: B TO THE INDEPENDENT AUDITORS REPORT
Report on the Internal Financial Controls under Clause
(i) of Sub-section 3 of Section 143 of the Companies Act2013("the Act") Wehave audited the internal financial controls over financial reporting of NOVA IRON &STEEL LIMITED ("the Company") as of March 31st2016 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
Managements Responsibility for Internal Financial Controls
The Companys 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).These responsibilitiesinclude the designimplementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusinessincluding adherence to companys policiesthe safeguarding of its assetstheprevention and detection of frauds and errorsthe accuracy and completeness of theaccounting recordsand the timely preparation of reliable financial informationasrequired underthe Companies Act2013.
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 Auditingissued by ICAI and deemed tobe prescribed under section 143(10) of the Companies Act2013to the extent applicable toan audit of internal financial controlsboth applicable to an audit of Internal FinancialControls andboth issued by the Institute of Chartered Accountants of India.ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 financialreportingassessing the risk that a material weakness existsand testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk.Theprocedures selected depend on the auditors judgementincluding the assessment of therisks of material misstatement of the financial statementswhether 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 Companys internal financial controlssystem overfinancial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
Acompany's internal financial control overfinancial reporting is a process designed toprovide 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 thatin reasonable detailaccurately and fairly reflect 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 principlesand that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisitionuseor 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 overfinancialreportingincluding the possibility of collusion or improper management override ofcontrolsmaterial misstatements due to error or fraud may occur and not bedetected.Alsoprojections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsorthat the degree of compliance with the policies or procedures may deteriorate.
In our opinionthe Company hasin all material respectsan adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31st2016based 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.
| ||FOR ANTIMA& GOEL |
| ||Chartered Accountants |
| ||Firm Registration No: 009062N |
| ||(R.B.GOEL) |
|Place: New Delhi ||PARTNER |
|Date: 30.05.2016 ||M.NO: 086862 |