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Steelco Gujarat Ltd.

BSE: 500399 Sector: Metals & Mining
NSE: STEELCOGUJ ISIN Code: INE629B01024
BSE LIVE 11:00 | 17 Aug 7.14 0.07
(0.99%)
OPEN

7.20

HIGH

7.20

LOW

7.14

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 7.20
PREVIOUS CLOSE 7.07
VOLUME 2325
52-Week high 13.00
52-Week low 4.49
P/E
Mkt Cap.(Rs cr) 30
Buy Price 7.14
Buy Qty 100.00
Sell Price 7.65
Sell Qty 100.00
OPEN 7.20
CLOSE 7.07
VOLUME 2325
52-Week high 13.00
52-Week low 4.49
P/E
Mkt Cap.(Rs cr) 30
Buy Price 7.14
Buy Qty 100.00
Sell Price 7.65
Sell Qty 100.00

Steelco Gujarat Ltd. (STEELCOGUJ) - Auditors Report

Company auditors report

To

The Members of Steelco Gujarat Limited

Report on the Standalone Financial Statements

We have audited the accompanying Standalone financial statements of Steelco GujaratLimited ("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 the significant accounting policies and other explanatoryinformation.

Management’s Responsibility for the Financial Statements

The Company's management is responsible for the matters stated in section 134(5) of theCompanies Act 2013 ("the Act") with respect to the preparation of theseStandalone 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 the maintenance of adequate accounting records in accordancewith the provision of the Act for safeguarding of the assets of the Company and forpreventing and detecting the frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of internal financial control thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditors’ 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 thereunder.

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.

An audit involves performing procedures to obtain audit evidences about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditors'judgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal control relevant to the Company's preparation of the financialstatements that give a true and fair view in order to design audit procedures that areappropriate in the circumstances but not for the purpose of expressing an opinion onwhether the Company has in place an adequate internal financial controls system overfinancial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by Company's Directors as well as evaluating the overallpresentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.

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:

(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 profit for the year endedon that date; and

(c) in the case of the Cash Flow Statement of the cash flows for the year ended onthat date.

Emphasis of Matter

We draw attention to the matters detailed in the Note 35 of the audited financialstatements in respect of basis and circumstances for the preparation of the financialstatements on a going concern basis for the financial year despite the accumulated lossesand their impact on net worth at the balance sheet date.

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 of India in terms of subsection (11) ofSection 143 of the Act we give in the "Annexure-1" a statement on thematters 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 Standalone financial statements dealt with by this report are in agreement withthe 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.; and

(e) On the basis of the written representations received from the directors as on 31stMarch 2016 and 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 of section164(2) of the Act.

(f) With respect to the adequacy of the internal financial control over financialreporting of the company and operating effectiveness of such controls refer to ourseparate report in "Annexure -2"; and

(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 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 19 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 MUKESH M. SHAH & CO.
CHARTERED ACCOUNTANTS
Firm Registration No. 106625W
PARTNER
Place : Mumbai Chandresh S. Shah
Date :20th May 2016 Membership No. 42132

Annexure - 1 to in the Independent Auditors’ Report of even date to the members ofSTEELCO GUJARAT LIMITED for the year ended 31st March 2016.

Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit we report that:

1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets; however

the same is required to be updated.

(b) Some of the fixed assets were physically verified during the year by the managementin accordance with programme of verification which in our opinion provides for physicalverification of all the fixed assets at reasonable intervals. According to the informationand explanations given to us no material 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 titles deeds of immovable properties areheld in the name of the company.

2. (a) The inventories have been physically verified by the management during the year.In our opinion the frequency of such verification is

reasonable having regard to the size of the Company and nature of its business.

(c) In our opinion and according to the information and explanation given to us thecompany has maintained proper records of inventory. No material discrepancies were noticedon physical verification of inventory.

3. The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Companies Act2013. Accordingly clause (iii)(a) and (iii)(b) of paragraph of the Order are notapplicable to the company for the current year.

4. In our opinion and according to the information and explanations given to us theCompany has not given any loans guarantees or security or made any investments to whichprovisions of section 185 and 186 of the Act is applicable and accordingly paragraph 3(iv) of the Order is not applicable to the Company.

5. The Company has not accepted any deposits from the Public within the meaning of theprovisions of section 73 to 76 or any other relevant provisions of the Act and the rulesframes thereunder. Further according to the information and explanations given to us noorder has been passed by the Company Law Board or National Company Law Tribunal or ReserveBank of India or any court or any other Tribunal in this regard.

6. We have broadly reviewed the books of accounts maintained by the Company pursuant tothe rules made by the Central Government for maintenance of cost records under sub-section(1) of section 148 of the Company Act 2013 and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However we have not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.

7. (a) According to the information and explanations given to us and on the basis ofour examination of the books of account the company has

been generally regular in depositing undisputed statutory dues including ProvidentFund Employees' State Insurance Income-tax Sales- tax Service tax Custom duty Exciseduty Value added Tax Cess and any other material statutory dues during the year with theappropriate authorities. Moreover as at 31st March 2016 there are no such undisputeddues payable for a period of more than six months from the date they became payable exceptTax deducted at source amounting to ' 0.06 lakhs which has since now been deposited.

(b) According to the information and explanations given to us the particulars of duesof Income tax Sales tax Excise duty and Service tax and other material statutory dues asat 31st March 2016 which have not been deposited on account of any dispute are asfollows:

Name of the Statute Nature of dues Amounts involved (' in Lakhs) Period to which the amount relates Forum where dispute is pending
The Income Tax Act 1961 Income Tax 24.45 1991-92 H'nable Gujarat High Court
Income Tax 26.03 1992-93 H'nable Gujarat High Court
Income Tax 61.55 1993-94 H'nable Gujarat High Court
Income TaxPenalty 268.02 2007-08 Commissioner of Income Tax - Appeal Baroda
Income TaxPenalty 142.42 2008-09 Commissioner of Income Tax - Appeal Baroda
Income Tax 393.53 2010-11 Commissioner of Income Tax - Appeal Baroda
Income Tax 240.50 2012-13 Commissioner of Income Tax - Appeal Baroda
Custom Act Custom Duty 32.66 2008-09 CESTAT Ahmedabad
Gujarat Stamp Act 1958 Stamp Duty 45.44 2008-12

8. According to the information and explanations given to us and on the basis of ourexamination of the books of account the company has generally been regular in payment ofinterest and instalments of loans or borrowings from any financial institution banksgovernment or due to debenture holders during the year except some delayed paymentobserved during the year.

9. The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) and term loans during the year. Accordingly paragraph3 (ix) of the Order is not applicable to the Company

10. According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of our audit.

11. According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company had paid excess remuneration of ' 21.06lakhs to its Managing Director than approved by Central Government as mandated by theprovisions of section 197 (with schedule V) of the Act however the Company has alreadyinitiated the process to recover such amount from the Managing Director and has beenappropriately recorded and disclosed in the financial statement.

12. In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable to the Company.

13. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with section 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

14. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

15. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable to the Company.

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

For MUKESH M. SHAH & CO.
CHARTERED ACCOUNTANTS
Firm Registration No. 106625W
PARTNER
Place : Mumbai Chandresh S. Shah
Date :20th May 2016 Membership No. 42132

Annexure - 2 to in the Independent Auditors’ Report of even date to the members ofSTEELCO GUJARAT LIMITED for the year ended 31st March 2016.

Report on the Internal Financial Control Clause (I) Of Sub-Section 3 of Section 143 ofthe Companies Act 2013 ("The Act")

We have audited the internal financial controls over financial reporting of SteelcoGujarat Limited ("the company") as of March 312016 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management Responsibility for Internal Financial Controls

The company's management is responsible for establishing and maintaining internalfinancial control 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe act.

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 Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial control 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 Judgement including the assessment of the materialmisstatement 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 is a process designedto provide 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material 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 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 internal financial controlssystem over financial reporting which is required to be strengthened so as to make thesame commensurate with the size and nature of business of the Company and operativeeffectiveness of such internal financial controls over financial reporting requiresimprovement and need to be made effective as at March 31 2016 based on the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For MUKESH M. SHAH & CO.
CHARTERED ACCOUNTANTS
Firm Registration No. 106625W
PARTNER
Place : Mumbai Chandresh S. Shah
Date :20th May 2016 Membership No. 42132