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Sathavahana Ispat Ltd.

BSE: 526093 Sector: Metals & Mining
NSE: SATHAISPAT ISIN Code: INE176C01016
BSE LIVE 15:43 | 18 Aug 38.00 -1.35
(-3.43%)
OPEN

39.10

HIGH

39.10

LOW

37.40

NSE 15:31 | 18 Aug 38.20 -0.65
(-1.67%)
OPEN

39.40

HIGH

39.40

LOW

37.65

OPEN 39.10
PREVIOUS CLOSE 39.35
VOLUME 5752
52-Week high 103.95
52-Week low 33.00
P/E
Mkt Cap.(Rs cr) 193
Buy Price 38.00
Buy Qty 46.00
Sell Price 0.00
Sell Qty 0.00
OPEN 39.10
CLOSE 39.35
VOLUME 5752
52-Week high 103.95
52-Week low 33.00
P/E
Mkt Cap.(Rs cr) 193
Buy Price 38.00
Buy Qty 46.00
Sell Price 0.00
Sell Qty 0.00

Sathavahana Ispat Ltd. (SATHAISPAT) - Auditors Report

Company auditors report

To

The Members of

SATHAVAHANA ISPAT LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of SATHAVAHANA ISPAT LIMITED("the Company ") which comprise the Balance Sheet as at 31st March2016 the Statement of Profit and Loss and the Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory information.

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 Act 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 for 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 thefinancial statements that givea true and fair view and are free from material misstatement whether due to fraud orerror.

Auditor's 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 under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the

Standards on Auditing specified 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 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 are 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 thefinancial 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 accepted in India of the state of affairs of the Company as at 31stMarch 2016 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("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 specified inparagraphs 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 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 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 termsof Section 164 (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 controls refer to ourseparate report in"Annexure B".

(g) 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 opinion and to the best of our information and accordingto the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note No.27 (II) (3) to the financialstatements;

ii. TheCompanydid not have any long-term contracts with material foreseeable losses anddid not have any long-term derivative contracts as at 31st March 2016;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31stMarch 2016.

For P.V.R.K. NAGESWARA RAO & CO.
Chartered Accountants
Firm's Registration Number: 002283S
N.ANKARAO
HYDERABAD Partner
30.05.2016 Membership Number: 23939

AnnexureA to Independent Auditor's Report Referred to in Paragraph 7 under the headingof' Report on Other Legal and Regulatory Requirements' of our report of even date

1. (a) The company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets.

(b) The fixed assets have been physically verified by the management according to thephased programme designed to cover all the fixed assets on rotation basis. In respect offixed assets verified according to this programme which is considered reasonable nomaterial discrepancies were noticed on such verification.

(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.

2. The inventories of the company have been physically verified at the year end by theManagement except stocks lying with others which have been verified with reference toconfirmations certificates and other relevant documents where available.The discrepanciesnoticed on physical verification of stocks as compared to book records which in ouropinion were not material have been properly dealt with in the books of account.

3. The Company has not granted any loans securedor unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Companies Act 2013 ("the Act"). Therefore the provisions ofClause 3(iii) (iii)(a) (iii)(b) and (iii)(c) of the Order are not applicable to theCompany.

4. The Company has not granted any loans or made any investments or provided anyguarantees or security to the parties covered under Section 185 and 186 of the Act.Therefore the provisions of Clause 3(iv) of the Order are not applicable to the Company.

5. The Company has not accepted any deposits from the public within the meaning ofSections 737475 and 76 of the Act and the rules framed there under to the extentnotified.

6. We have broadly reviewed the books of account maintained by the company in respectof products where pursuant to the Rules made by the Central Government of India themaintenance of cost records has been prescribed under Sub-section (1) of Section 148 ofthe Act and are of the opinion that prima facie the prescribed accounts and records havebeen maintained and are being made up. We have not however made a detailed examinationof the records with a view to determine whether they are accurate or complete.

7. (a) According to the records of the Company and as per the information andexplanations given to us the

Company is generally regular in depositing undisputed statutory dues includingprovident fund employees state insurance income tax sales tax service tax duty ofcustoms duty of excise value added tax cess and any other statutory dues applicable toit with appropriate authorities though there have been delays in few cases and in respectof these statutory dues there are no outstanding dues as on 31.03.2016 which areoutstanding for a period of more than six months from the date they became payable.

(b) According to the records of the Company and as per the information and explanationsgiven to us there are no dues of service tax value added tax and cess which have notbeen deposited on account of any dispute as on 31.03.2016 except income tax sales taxduty of customs and duty of excise the details of which areas given below:

S.No. Name of the Statute Nature of the dues Period to which it relates Amount Rs. Forum where dispute is pending
1. Central Excise Act 1944 Excise duty and penalty February 2007 to Octoter2009 1907216 The Customs Excise and ServiceTax Appellate TribunalBangalore
2. Central SalesTax Act 1956 Sales tax 2005-06 2329595 Sales Tax AppellateTribunal Hyderabad.
3. Customs Act 1962 Customdutyand penalty 2012-13 104795907 The Customs Excise and ServiceTax AppellateTribunalHyderabad.
4. IncomeTax Act 1961 Interest on Dividend Distribution Tax 2009-10 1379100 Rectification of mistake filed with Deputy Commissioner of IncomeTax Cirde 3(1) Hyderabad.
5. Central Excise Act 1944 Excise duty and penalty September 2011 to May 2015 6680087 The Commissioner (VizagAppeaHI) Guntur.

8. Based on our audit procedures and as per the information and explanations given bythe management the Company has delayed in repayment of principal and interest to CanaraBank Rs. 524032777/- State Bank of Hyderabad Rs. 444239407/- and Andhra Bank Rs.382495628/- during the year aggregating to Rs. 1350767812/- and no such dues were inarrears as on the Balance Sheet date. There was no amount raised by the Company throughthe issue of Debentures.

9. The Company has not raised any moneys by way of initial public offer and furtherpublic offer (including debt instruments). In our opinion and according to theinformation and explanations given to us the term loans have been applied for thepurposes for which they were obtained.

10. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

11. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

12. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.

13 The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under AccountingStandard (AS) 18 Related Party Disclosures specified under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2014.

14 The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.

15 The Company has not entered into any non cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.

16 The Company is not required to be registered under Section 45-IA of the Reserve Bankof India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

For P V R K NAGESWARA RAO & CO.
Chartered Accountants
Firm's Registration Number: 002283S
N. ANKA RAO
HYDERABAD Partner
30.05.2016 Membership Number: 23939

Annexure B to Independent Auditor's Report

Referred to in Paragraph 2(f) under the heading of 'Report on Other Legal andRegulatory Requirements' of our report of even date

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 SATH AVAHAN A ISPAT LIMITED ("the Company") as of 31st March 2016 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that 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').These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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 judgment 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 controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting isa 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 that in reasonable detail accurately 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 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 controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2016based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For P.V.R.K. NAGESWARA RAO & CO.
Chartered Accountants
Firm's Registration Number: 002283S
N. ANKA RAO
HYDERABAD Partner
30.05.2016 Membership Number :23939