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Kusum Iron & Steel Ltd.

BSE: 513625 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE397E01014
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Kusum Iron & Steel Ltd. (KUSUMIRON) - Auditors Report

Company auditors report

AUDITORS' REPORT TO THE MEMBERS OF M/SKUSUM IRON& STEEL LIMITED

We have audited the accompanying financial statements of M/S KUSUM IRON & STEELLIMITED SILIGURI which comprise the Balance Sheet as at 31st March 2017 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary 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 preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes the maintenance of adequate accountingrecords in accordance with the provision of the Act for safeguarding of the assets of theCompany and for preventing and detecting the frauds and other irregularities; selectionand application of appropriate accounting policies; making judgments and estimates thatare reasonable and prudent; and design implementation and maintenance of adequateinternal financial control that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

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 there under.

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 materia) misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment 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 financial control relevant to the Company's preparation of thefinancial statements that give true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by Company's Directors as well as evaluating the overall presentation ofthe financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial 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 BlstMarch 2017 Loss 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 2017("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 in paragraphs 3and 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 purpose of our audit

b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books

c) The Balance Sheet Statement of Profit and Loss and cash flow dealt with by thisReport 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 written representations received from the directors as on March

31 2017 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2017 appointed as a director in terms of Section 164(2) ofthe 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) In our opinion and to the best of our information and according to the explanationsgiven to us we report as under with respect to other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014:

i. The Company does not have any pending litigations which would impact its financialposition

ii. The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses

iii. There were no amounts which required to be transferred by the Company to theInvestor Education and Protection Fund.

iv. The Company has provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8 November2016 to 30 December 2016 and these are in accordance with the books of accountsmaintained by the Company

SILIGURI FOR R.K.BIHANI & ASSOCIATES
Chartered Accountants
Dated: 7th August 2017
PROPRIETOR
Membership Number: 054997
PAN: ADXPB7679Q
FRN: 320078E

Annexure-A to the Auditors' Report

[Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'of our Report of even date to the members of M/S KUSUM IRON& STEEL LIMITED on theaccounts of the company for the year ended 31st March 2017]

On the basis of such checks as we considered appropriate and according to theinformation and Explanations given to us during the course of our audit we report that:

(i) In respect of its fixed assets:

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

(b) As explained to us fixed assets have been physically verified by the managementduring the year in accordance with the phased programme of verification adopted by themanagement which in our opinion provides for physical verification of all the fixedassets at reasonable intervals. According to the information and explanations given to usno 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 title deeds of immovable properties areheld in the name of the company.

(ii) As explained to us the inventory has been physically verified at reasonableintervals during the year by the management. In our opinion the frequency of verificationis reasonable. The discrepancies noticed on verification between the physical stocks andthe book records were not material. (The discrepancies have been properly dealt with inthe books of accounts)

(iii) According to the information and explanations given to us the Company hasgranted loans to the parties covered in the Register maintained under Section 189 of theCompanies Act 2013;

(iv) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.

(v) In our opinion and according to the information and explanation given to us thecompany has complied with (the Directives of the Reserve Bank of India- applicable toNBFC) the provisions of section 73 to 76 and other relevant provisions of the CompaniesAct and the Companies (Acceptance of Deposit) Rules 2014 as applicable with regards tothe deposits accepted from members. No order has been passed by the Company Law Board orNational Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunalwith regard to the Deposits.

(vi) As informed to us the Central Government has not prescribed maintenance of costrecords under sub-section (1) of Section 148 of the Act in respect of the activitiescarried on by the Company.

(vii) In respect of statutory dues:

(a) According to the records of the company and information and explanations given tous the Company has generally been generally regular in depositing undisputed statutorydues including Provident Fund Employees State Insurance (ESI) Income- tax Tax deductedat sources Professional Tax Sales Tax value added tax (VAT) Service Tax Custom DutyExcise Duty Cess and other material statutory dues applicable to it with the appropriateauthorities.

According to the information and explanations given to us there were no undisputedamounts payable in respect of Income-tax Wealth Tax Custom Duty Excise Duty sales taxVAT Cess and other material statutory dues were outstanding as at 31 March 2017 for aperiod of more than six months from the date they became payable.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of dues to financial institutions banksgovernment and debenture holders.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans. The term loans taken by thecompany have been applied for the purpose for which they were raised.

(x) According to the information and explanations given to us no 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 and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V of the Act.

(xii) 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.

(xiii) According to the information and explanations given to us and based on ourexamination of the Company transactions wjthJjTe related parties are in compliance

with the sections 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.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the year.

(xv) 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 noncashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

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

SILIGURI FOR R.K.BIHANI & ASSOCIATES
Chartered Accountants
Dated: 7th August 2017
PROPRIETOR
Membership Number: 054997
PAN: ADXPB7679Q
FRN:320078E

Annexure-B to the Auditors' Report

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 M/S KUSUMIRON& STEEL LIMITED ("the Company") as of 31st March 2017 in conjunctionwith our audit of the financial statements of the Company for the year 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". 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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence l/we have obtained is sufficient and appropriate toprovide a basis for my /our audit opinion on the Company's internal financial controlssystem over 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 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 March 31 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

SILIGURI FOR R.K.BIHANI & ASSOCIATES
Chartered Accountants
Dated: 7th August 2017
PROPRIETOR
Membership Number: 054997
PAN: ADXPB7679Q
FRN: 320078E