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Prabhu Steel Industries Ltd.

BSE: 506042 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE821R01015
BSE 05:30 | 01 Jan Prabhu Steel Industries Ltd
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Prabhu Steel Industries Ltd. (PRABHUSTEELIND) - Auditors Report

Company auditors report

To the Members of

PRABHU STEEL INDUSTRIES LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of PRABHU STEEL INDUSTRIES LIMITED (the company bearing Corporate Identification No. L28100MH1972PLC015817) which comprise the Balance Sheet as at 31st March 2 019 the Statement of Profit and Loss The Statement of Cash Flow & the Statement of Changes in Equity for the year then ended and a summary of the significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31 2019 and of profit changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act 2013. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act 2013 and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibility of Management for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act 2013 (the Act) with respect to the preparation of these financial statements that give a true and fair view of the financial position financial performance changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India including the accounting Standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate implementation and maintenance of accounting policies; making judgments and estimates that are reasonable and prudent; and design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the financial statement that give a true and fair view and are free from material misstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing the Company's ability to continue as a going concern disclosing as applicable matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.

That Board of Directors are also responsible for overseeing the company's financial reporting process Auditor's Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement whether due to fraud or error and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if individually or in the aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Report on Other Legal and Regulatory Requirements

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 of the Companies Act 2013 we give in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

As required by Section 143(3) of the Act we report that:

We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

a. In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

b. The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account

c. In our opinion the aforesaid standalone financial statements comply with the Accounting Standards 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 31st March 2019 taken on record by the Board of Directors none of the directors is disqualified as on 31st March 2019 from being appointed as a director in terms of Section 164 (2) of the Act.

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls refer to our separate Report in Annexure B.

g. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the best of our information and according to the explanations given to us:

1. The Company does not have any pending litigations which would impact its financial position.

2. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses hence has made no provision as required under the applicable law or accounting standards.

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

Lalit Jham & Co.
Chartered Accountants
Firm Registration No: 114158W
Place: Nagpur
Date: 24th May 2019.
Lalit Jham
Partner
Membership No: 040501

ANNEXURE A REFERRED TO IN THE AUDITORS REPORT ON THE ACCOUNTS OF PRABHU STEEL INDUSTRIES LIMTED FOR THE YEAR ENDING 31st MARCH 2019

As required by the Companies (Auditor s Report) Order 2016 issued by the Central Government of India in term of sub-section (11) of section 143 of the Companies Act 2013 taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit and to the best of our knowledge and belief we report the following:

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Sr. Particulars No.Auditors Remark
(i) (a) whether the company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets;Yes the company is maintaining proper records as required under the act.
(b) whether these fixed assets have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so whether the same have been properly dealt with in the books of account;As explained to us all the fixed assets have been physically verified by the management during the year at reasonable intervals which in our opinion is reasonable having regard to the size of the company and the nature of assets. No material discrepancies were noticed on such physical verification.
(c) whether the title deeds of immovable properties are held in the name of the company. If not provide the details thereofYes the title deeds of immovable properties are held in the name of the company.
(ii) (a) whether physical verification of inventory has been conducted at reasonable intervals by the management;As explained to us the inventory of stocks of trading goods has been physically verified by the management at regular intervals during the year.
(b) whether the company is maintaining proper records of inventory and whether any material discrepancies were noticed on physical verification and if so whether the same have been properly dealt with in the books of account;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 has maintained proper records of inventory and there were no material discrepancies noticed on physical verification of inventory as compared to the book records.
(iii) (iii) whether the company has granted any loans secured or unsecured to companies firms Limited Liability Partnerships or other partiesThe company has granted loan to a party covered in the register maintained under section 189 of the Companies Act 2013.
covered in the register maintained under section 189 of the Companies Act 2013. If so
(a) whether the terms and conditions of the grant of such loans are not prejudicial to the company's interest;The terms and conditions of the grant of such loans are not prejudicial to the company's interest
(b) whether the schedule of repayment of principal and payment of interest has been stipulated and whether the repayments or receipts are regular;Since the loan is repayable on demand the question of repayment doesn't arise. Interest has been recovered on the loan so granted.
(c) if the amount is overdue state the total amount overdue for more than ninety days and whether reasonable steps have been taken by the company for recovery of the principal and interest;Since the loan is repayable on demand by the company question of overdue amounts doesn't arise.
(iv) in respect of loans investments guarantees and security whether provisions of section 185 and 186 of the Companies Act 2013 have been complied with. If not provide the details thereof.In our opinion and according to the information and explanations given to us the provisions of section 185 and 186 of the Companies Act 2013 have been complied with.
(v) in case the company has accepted deposits whether the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framed there under where applicable have been complied with? If not the nature of contraventions should be stated; If an order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal whether the same has been complied with or not?In our opinion and according to the information and explanations given to us the Company has not accepted deposits from the public during the year and therefore the provisions of Section 73 to 76 of the Companies Act 2013 and Rules made there under are not applicable to the Company
(vi) where maintenance of cost records has been specified by the Central Government under sub-section (1) of section 148 of the Companies Act whether such accounts and records have been made and maintained;The maintenance of cost record has not been prescribed by the Central Government under subsection (1) of section 148 of the Companies Act 2013.
(vii) (a) is the company regular in depositing undisputed statutory dues including provident fund employees' state insurance income-tax sales-tax wealth tax service tax duty of customs duty of excise value added tax cess and any other statutory dues with the appropriate authorities and if not the extent of the arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable shall be indicated.According to the information and explanations given to us the company was generally regular in depositing dues in respect of Employees Provident Fund Employees State Insurance Fund and other statutory dues
(b) in case dues of income tax or sales tax or wealth tax or service taxAccording to the records
or duty of customs or duty of excise or value added tax or cess have not been deposited on account of any dispute then the amounts involved and the forum where dispute is pending shall be mentioned. (A mere representation to the concerned Department shall not constitute a dispute).examined by us and the information and explanations given to us there are no undisputed amounts due in respect of income tax sales tax wealth tax excise duty Employees provident fund Employee state insurance fund and other statutory dues at the end of the year outstanding in the books.
Details Of Taxes which have not been deposited as at 31.3.2019 on account of dispute are given below:

 

Nature of StatuteNature of DuesForum where dispute pendingPeriod to which amount relatesAmount
Maharashtra Value Added Tax Act.Asst. under the act.Comm. (Appeals)2011-121315421/-
Maharashtra Value Added Tax Act.Asst. under the act.Comm. (Appeals)2012-13876725/-

 

(viii) whether the company has defaulted in repayment of loans or borrowing to a financial institution bank Government or dues to debenture holders? If yes the period and the amount of default to be reported (in case of defaults to banks financial institutions and Government lender wise details to be provided).Based on our audit procedures and on the basis of information and explanations given by the management the Company has not defaulted in the repayment of dues to banks financial institutions during the year.
(ix) whether moneys raised by way of initial public offer or further public offer (including debt instruments) and term loans were applied for the purposes for which those are raised. If not the details together with delays or default and subsequent rectification if any as may be applicable be reported;The Company has not raised any money by way of initial public offer or further public offer further the term loans have been applied for the purpose for which they were raised.
(x) whether any fraud by the company or any fraud on the Company by its officers or employees has been noticed or reported during the year; If yes the nature and the amount involved is to be indicated;As per the explanation given to us and information provided no fraud on or by the company has been noticed or reported.
(xi) whether managerial remuneration has been paid or provided inAs per the information
accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act? If not state the amount involved and steps taken by the company for securing refund of the same;provided managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.
(xii) whether the Nidhi Company has complied with the Net Owned Funds to Deposits in the ratio of 1: 20 to meet out the liability and whether the Nidhi Company is maintaining ten per cent unencumbered term deposits as specified in the Nidhi Rules 2014 to meet out the liability;Since the company is not a Nidhi Company this clause is not applicable.
(xiii) whether all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act2013 where applicable and the details have been disclosed in the Financial Statements etc. as required by the applicable accounting standards;As per the explanation given to us and information provided transactions with the related parties are in compliance with sections 177 and 188 of Companies Act2013
(xiv) whether the company has made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and if so as to whether the requirement of section 42 of the Companies Act 2013 have been complied with and the amount raised have been used for the purposes for which the funds were raised. If not provide the details in respect of the amount involved and nature of non-compliance;As per the explanation given to us and information provided the company has not made preferential allotment & private placement of shares during the year under review & the requirement of section 42 of the Companies Act 2013 have been complied with
(xv) whether the company has entered into any non-cash transactions with directors or persons connected with him and if so whether the provisions of section 192 of Companies Act 2013 have been complied with;The company has not entered into any noncash transactions with directors or persons connected with him with regards to section 192.
(xvi) whether the company is required to be registered under section 45-IA of the Reserve Bank of India Act 1934 and if so whether the registration has been obtained.The company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934

ANNEXURE - B TO THE AUDITORS' REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 (the Act)

We have audited the internal financial controls over financial reporting of Prabhu Steel Industries Limited (the Company) as of 31 March 2019 in conjunction with 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 internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (`ICAI'). These responsibilities include the design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business including adherence to company's policies the safeguarding of its assets the prevention and detection of frauds and errors the accuracy and completeness of the accounting records and the timely preparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the Guidance Note) and the Standards on Auditing issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 to the extent applicable to an audit of internal financial controls both applicable to an audit of Internal Financial Controls and both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgment including the assessment of the risks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition use or disposition of the company'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 financial reporting including the possibility of collusion or improper management override of controls material misstatements due to error or fraud may occur and not be detected. Also projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2019 based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Lalit Jham & Co.
Chartered Accountants
Firm Registration No: 114158W
Place: Nagpur
Date: 24th May 2019
Lalit Jham
Partner
Membership No: 040501