TO THE MEMBERS OF
AML STEEL LIMITED
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of AML Steel Limited("theCompany") which comprise the Balance Sheet as at 31st March 2014 the Statementof Profit and Loss and the Cash Flow Statement for the year then ended and a summary ofthe significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Management is responsible for the preparation of these financialstatements that give a true and fair view of the financial position financial performanceand cash flows of the Company in accordance with the Accounting Standards referred to insub-section (3C) of section 211 of the Companies Act 1956 ("the Act"). Thisresponsibility includes the design implementation and maintenance of internal controlrelevant to the preparation and presentation of the financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withthe ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free from material misstatement.
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 the internal control relevant to the Company's preparation and fairpresentation of the financial statements in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made by theManagement as well as evaluating 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.
In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner 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 2014;
(b) in the case of the Statement of Profit and Loss of the profit of the Company forthe year 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 2003("the Order")issued by the Central Government of India in terms of sub-section (4A) of section 227 ofthe Act we give in the Annexure a statement on the matters specified in paragraphs 4 and5 of the Order.
2. As required by Section 227(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 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 Statement of Profit and Loss and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account.
(d) In our opinion the Balance Sheet Statement of Profit and Loss and the Cash FlowStatement comply with the Accounting Standards referred to in sub-section (3C) of section211 of the Act.
(e) On the basis of the written representations received from the directors as on 31stMarch 2014 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2014 from being appointed as a director in terms of clause(g) of sub-section (1) of section 274 of the Act.
For K P Jain & Co.
CA.Kishore Kumar P Jain
Sole Proprietor Membership No.027236
Place: Chennai Date: May 30 2014
ANNEXURE TO THE AUDITORS' REPORT
[Referred to in paragraph (1) of our report of event date]
In the terms of the information and explanations given to us and the books and recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe state that:
1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has phased program of physical verification of its fixed assets whichin our opinion is reasonable having regard to the size of the Company and the nature ofits assets. Management has physically verified certain fixed assets during the year.Discrepancies noticed on such verification as compared to book records which were notmaterial have been properly adjusted in the books of account.
(c) During the period the Company has not disposed off any major part of the plant ormachinery affecting the going concern status of the Company.
2. (a) The inventory except material lying with third parties and in transit has beenphysically verified by the management during the year and we have relied on theircertificate.
(b) The procedure for the physical verification of inventory followed by the managementis in our opinion reasonable and adequate in relation to the size of the company andnature of its business.
(c) In our opinion the Company is maintaining proper records of inventory. Thediscrepancies noticed on physical verification of inventory as compared to book recordswere not material and have been properly dealt with in the books of account.
3. (a) The Company has taken loans from companies covered in the Register maintainedunder section 301 of the Companies Act 1956.
(b) According to the information and explanation given to us Interest free loans havebeen taken from companies/firms or other parties listed in the Register maintained undersection 301 of the Companies Act 1956. The year ended balance of loan taken from suchparties was 68.22 Crores
(c) In our opinion and according to explanation and information given to us the Companyfrom whom the interest free loan is taken is repayable on demand. The Question of overduedoesn't arise.
(d) The company has granted loans secured or unsecured to companies firms or otherparties covered under section 301 of the Companies Act 1956 to the extent of 11.18 crs tosubsidiary companies.
4. In our opinion and according to the information and explanations given to us duringthe course of audit there are adequate internal control procedures commensurate with thesize of the company and the nature of its business with regard to purchase of inventoryfixed assets and with regard to the sale of goods. Further on the basis of ourexamination of the books and records of the company carried out in accordance with thegenerally accepted auditing practices in India we have neither come across nor haveinformed of any instance of major weakness in the aforesaid internal control procedures.
5. In respect of contracts or arrangements entered in the register maintained inpursuance of section 301 of the Companies Act 1956 to the best of our knowledge andbelief and according to the information and explanations given to us:
a) The particulars of contracts or arrangements referred to section 301 that needed tobe entered in the register required to be maintained under that section have been soentered.
b) The transactions have been made at prices which are prima facie reasonable havingregard to the prevailing market prices at the relevant time except in respect of certainpurchases for which comparable quotations are not available and in respect of which we areunable to comment.
6. The Company has not accepted any deposits from the public.
7. In our opinion the Company has an internal audit system commensurate with the sizeand nature of its business.
8. As explained to us the Company is not required to maintain books of accounts undersection 209 (1) (d) of the Companies Act 1956.
9. (a) According to the information given by the company that there are no statutorydues except Income Tax amounting to Rs. 124.62 Lacs. The Provident Fund Sales Tax WealthTax Custom Duty Excise Duty Cess and Other statutory dues have been regularly depositedwith the appropriate authorities during the year.
|Nature of dues ||Amount of Demand ||Period to which the amount relates ||Forum where the dispute is pending |
|Income Tax ||1270852/- ||A.Y: 2006-2007 ||Income Tax Appellate Tribunal |
| ||5649780/- ||A.Y: 2007-2008 ||Income Tax Appellate Tribunal |
| ||4454896/- ||A.Y: 2008-2009 ||Income Tax Appellate Tribunal |
| ||1087150/- ||A.Y: 2010-2011 ||CIT Appeals |
(b) According to the information given to us there are no dues of Income Tax CustomTax Wealth Tax and Cess which have not been deposited on account of any dispute.
10. There are no accumulated losses of the company at the end of the financial year.There are no Cash losses during the financial and the immediately preceding financialyear.
11. According to the information and explanations given to us and as per the books andrecords examined by us the company has not defaulted in repayment of dues to anyfinancial institution or bank.
12. According to the information and explanations given to us the company has notgranted any loans and advances on the basis of security by way of pledge of sharesdebentures and other securities.
13. The company does not fall within the Category of Chit Fund / Nidhi Mutual BenefitFund / Society and hence related reporting requirements are not applicable.
14. According to the information and explanations given to us Company is not dealingor trading in Share Securities Debentures and other investments and hence the relatedreporting requirements are not applicable.
15. The company has not given any guarantees against loans taken by others from banksor financial institutions except the guarantee given to its subsidiaries i.e.; Ankit Ispat(P) Ltd. AML steel & Power Limited and to Ashok Steel Industries Private Limited.
16. In our opinion and according to the information and explanations given to us onover all basis the term loans have been applied for the purpose for which purpose theyare obtained.
17. According to the information and explanation given to us and overall examination ofthe Balance Sheet of the Company we report that no funds raised on short term basis havebeen used for long term investment. No long term funds have been used to finance shortterm assets except permanent working capital.
18. The company has not made any preferential allotment of shares to parties orcompanies covered in the Registered maintained under section 301 of the Companies Act1956.
19. The company has not issued any debentures and therefore creation of securities onits issue does not arise.
20. The company has not raised any money by public issue during the year.
21. During the course of our examinations of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India we haveneither come across any instance of fraud on or by the company noticed and reportedduring the year nor have we been informed of such case by the management.
For K P Jain & Co.
CA.Kishore Kumar P Jain
Sole Proprietor Membership No.027236
Date: May 30 2014