|
HARYANA STEEL AND ALLOYS LIMITED
ANNUAL REPORT 2006-2007
AUDITORS REPORT
To
The Members,
Haryana Steel & Alloys Limited,
Murthal, (Sonepat)
Report on the Accounts for the year ended on 31st March, 2007 In compliance
with section 227(2) of the Companies Act, 1956
1. We have audited the attached Balance Sheet of M/s. Haryana Steel &
Alloys Limited as at 31st March, 2007 and the Profit and Loss Account and
also the Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the CSP responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based en our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free from material mis statement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by the
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 issued by
Central Government of India in terms of Sub-Section(4A) of Section 227 of
the Companies Act, 1956. we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said order.
4. Further to our comments In the Annexure referred to above, we report
that:
i) We have obtained all the information and explanations, which to the best
of our, knowledge and belief were necessary for the purpose of our audit;
ii) In our opinion, proper books of accounts as required by the Law hove
been kept by the Company, so far as appears from our examination of the
books;
iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by the report are in agreement with the books of accounts;
iv) In our opinion, the Balance Sheet and Profit & Loss Account and Cash
Flow statement dealt with by this report comply with the Accounting
Standards referred to in section 211(3C) of the Companies Act, 1956;
v) On the basis of the written representations received from the Directors
as on 31st March, 2007 and taken on/record by the Board of Directors, we
report that none of the Directors is disqualified as on 31st March, 2007
from being appointed as Director in terms of clause (g) of Sub-section(1)
of Section 274 of the Companies Act, 1956;
VI. Attention is drawn to the under mentioned notes of Schedule S:
a) Note B-2 regarding total contingent liability amounting to
Rs. 72,37,63,371.
b) Note B-3 regarding non-provision of interest on unsecured loans.
c) Note B-6 regarding the non-compliance of the provisions of Small Scale
and Ancillary Industrial Undertakings Act, 1993 and Schedule VI of the
Companies Act, 1956.
d) Note B-7(a) regarding provisioning for non-moving inventory for more
than two year.
e) Note B-7(b) regarding provisioning for bad & doubtful debts.
Note B-12 regarding preparation of accounts on a going concern basis even
though total liabilities exceeds its total assets. These accounts do not
include any adjustments in case the Company ceases to be a going concern.
g) Note B-13 regarding secured loan from Financial Institutions & others
amounting to Rs. 2971.60 Lac become unsecured as on 31st March, 2007 due to
inadequate security.
h) Note B-21(a) regarding confirmation of balances from debtors, creditors,
loans and advances and other parties.
i) Note B-21 (b) regarding material prices and sales realisation.
j) Note B-22 regarding purchase from sister concerns without approval from
Central Government.
k) Note B-25 (c) regarding no system for allocation of expenses into each
segment.
VII. Subject to our commencements in para (1) to (vi) above and their
consequential effective on the net assets end/or losses of any report
that, In our opinion and to the best our information and according to the
explanations given to us, the said accounts read with the notes there on
give on the information required by the Companies Act, 1956, for the manner
so required and give a true and fair view:
a) In the case of Balance sheet of the state of affairs of the Company as
at 31st March 2007;
b) In so far as it relates to the profit and Loss Account, of the loss for
the year ended on that date; and
c) In the case of the Cash flow statement of the cash flows for the year
ended en that day.
FOR P.C. BINDAL & CO
Chartered Accountants
C. A. K.C. Gupta
Place : Murthal (Sonepat) Partner
Dated : 27-8-2037 M. No. 088638
ANNEXURE REFERRED TO IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATE TO THE
MEMBERS OF HARYANA STEEL & ALLOYS LIMITED FOR THE YEAR ENDED ON 31ST MARCH,
2007
1. a) The Company has maintained proper records showing full particulars
Including quantitative details and situation of Fixed assets.
b) The Fixed Assets have been physically verified by the management during
the year. No material discrepancies were noticed on such verification.
c) During the year, the Company has not disposed off substantial/major part
of fixed assets.
2.a) As explained to us, the inventory has been physically verified during
the year by the Management. In our opinion, the frequency of verification
is reasonable.
b) In our opinion and according to the information and explanations given
to us the procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of the
company and the nature of its business.
c) In our opinion and according to the information and explanations given
to us and on the basis of our examination of the records of inventory, the
Company is maintaining proper records of Inventory. The discrepancies
noticed on verification between the physical stocks and the books records
were not material and have been proper' dealt with in the books of
accounts.
3. According to the information and explanation given to us, the company
has not taken/granted any loan from/to parties covered in the register
maintained under section 301 of the Companies Act, 1956, Accordingly,the
provisions of clause 4(iii) of the Companies (Auditor's Report) Order, 2003
are not applicable to the company.
4. In our opinion and according to the information and explanation given to
us, there are adequate internal control procedures commensurate with the
size of the company and the nature of its business with regard to purchases
of inventory, fixed assets and with regard to the sale of goods. During the
course of our audit, we have not observed any major weakness in Internal
controls.
5. a) According to Information and explanations given to us, we are of the
opinion that the transactions that reed to be entered into the register
maintained under section 301 of the Companies Act, 1956 have been so
entered.
b) In our opinion and according to the information and explanations given
to us. the transactions made in pursuance of contracts or arrangements
entered in the register maintained under section 301 of the Company Act,
1956 have been made at prices which are reasonable having regard to
prevailing market prices at the relevant time.
6.In our opinion according to the information and explanations given to
us,the company has not accepted any deposits from public to which
provisions of section 58A and 58AA or any other relevant provisions of the
Act, apply. We are informed by the management that no order has been passed
by the Company Law Board, National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal.
7. In our opinion, the company has an internal audit system commensurate
with the size and nature of its business.
8. We have broadly reviewed the books of account relating to materials,
labour and other items of cost maintained by the Company pursuant to the
rules made by the Central Government for the maintenance of cost records
under section 209(l)(d) of Companies Act, 1956 and we are of the opinion
that prima-facie, the prescribed accounts and records have been made and
maintained. We have not, however, made a detailed examination of the
records with a view to determining whether they are accurate or correct.
9. a) According to the information and explanations given to us and
according to the books and records produced before us, the company is
generally regular in depositing with appropriate authorities undisputed
statutory dues including provident fund, investor education and protection
fund,employees state insurance, income tax, sales tax, wealth tax. service
tax, custom duty, excise duty, cess and other material statutory dues
applicable to it.
b) According to the Information and explanations given to us no undisputed
amounts payable in respect of income tax, sales tax, wealth tax, service
tax, customs duty, excise duty and cess were in arrears, as at 31st March,
2007 for a period of more than six months from the date they become
payable.
c) According to the information and explanations given to us and the
records of the Company examined by us, dues of sales tax, income tax,
custom duty, wealth tax, excise duty and cess which have not been deposited
on account of disputes and the forum where the dispute is pending as under:
Name of the Statute Nature of Dues Amount Period to which Forum where
(Rs.) Amount dispute is
relates pending
Central Excise Act Excise Duty & 20413799 01.12,93 to Commissioner
Penalty 04.10.94
Central Excise Act Excise Duty & 6532659 01.06.99 to Commissioner
Penalty 07.02.2000
Central Excise Act Excise Duty 372849 2005-2006 Dy.Commissioner
Central Excise Act Excise Duty 246165937 01.05.2002 to Settlement
31.08.2005 Commission
H.S.E.B. Service line 13742223 Aug. 97 to Arbitration
Charges March, 2007
10. In our opinion, the net-worth of the company is negative. The Company
has Incurred cash loss during the financial year covered by our audit, as
well as in the immediately preceding financial year.
11. Based on our audit procedures and on the basis of the information and
explanation. given to us. there is continuous default in repayment of dues
to financial Institutions & bank since 1998. However, dues of original
lenders have been taken over by other Banks/ARC as stated hereunder:
Name of the original Lender Name of the Assignee Date of Assignment
Panjap National Bank Dhir & Dhir Assets Recon. 28.03.2006
Securitisation Co. Ltd.
IFCI ltd. Kotak Mahendra Bank Ltd. 06.12.2006
IIBI ltd. Yes Bank Ltd 25-04-2007
Total outstanding as on 31st March 2007 is Rs. 2971.60 lac excluding
interest not provided (Refer to note no. 2(e) of Schedule (`S').
12. According to the information and explanations given to us, the company
had not granted loans and advances on the basis of the securities way of
pledge of shares, debentures and other/securities.
13. In our opinion, the provisions of any special statute applicable to
Chit Fund, Nidhi or Mutual Benefit fund/society are not applicable to the
company.
14. a) Based on the records examined of by us and according to the company
is maintaining proper, record of the transactions and contracts of dealing
in shares and securities and those timely entries have been made in these
record.
b) Based on our audit procedures and to the best of our knowledge and
belief and according to the information and explanation given to us,the
Shares and securities have been held by the Company in its own name except
to the extent of the exemption granted under section 49 of the companies
Act, 1956.
15. The company has not given guarantees for loans taken by others from
bank/financial Institutions.
16. According to the information and explanations given to us, the company
has not availed any term loan during year under audit.
17. According to the information and explanations given to us and an
overall examination of the balance sheet of the company, we report that no
funds raised on short-term basis have been used for long-term investment.
18. According to the information and explanations given to us, the company
has not made preferential allotment of shares to parties and companies
covered in the register maintained under section 301 of the act.
19. According to the information and explanations given to us, the company
had not issued any debentures during the year.
20. According to the information and explanation given to us, the company
had not raised by public Issue during the year.
21. According to the information and explanations given to us, no fraud on
or by the company has been noticed or reported during the course of our
audit.
For P.C. BINDAL & CO
Chartered Accountants
CA. K.C. GUPTA
PLACE : Murthal (Sonepat) Partner
M. NO.: 088638
DATED : 27-08-2007
|
