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Rathi Steel & Power Ltd.

BSE: 504903 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE336C01016
BSE 00:00 | 03 Dec Rathi Steel & Power Ltd
NSE 05:30 | 01 Jan Rathi Steel & Power Ltd
OPEN 2.10
PREVIOUS CLOSE 2.10
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Mkt Cap.(Rs cr) 7
Buy Price 0.00
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Sell Price 0.00
Sell Qty 0.00
OPEN 2.10
CLOSE 2.10
VOLUME 1
52-Week high 2.10
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 7
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Rathi Steel & Power Ltd. (RATHISTEEL) - Auditors Report

Company auditors report

TO THE MEMBERS OF

RATHI STEEL AND POWER LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Rathi Steel AndPower Limited (‘the Company') which comprise the balance sheet as at 31st March2019 the statement of profit and loss and the cash flow statement for the year thenended and a summary 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 standalone financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

Auditor's 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 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 material misstatements.

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 internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating 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 on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements read along with Notes toaccounts give the information required by the Act in the manner so required and give atrue and fair view in conformity with the accounting principles generally accepted inIndia of the state of affairs of the Company as at 31st March 2019 and its loss and itscash flows for the year ended on that date.

Emphasis of Matter

1. We draw attention to note no. 16 to the financial statements regarding thepresentation of the same on-going concern basis. The company has incurred a net loss ofRs. 833233635.00 during the year ended on March 31 2019 and as on that date thecompany's current liabilities exceed its current assets by Rs. 2057863288.00 andcompany's net worth has been fully eroded.

Post assignment of substantial Debts to ARCs Company is making all efforts to initiatean alternative resolution plans by restructuring the debts as well as to maxmise theoperating levels/minimize the costs. Pending the resolution of the above measures thesefinancial statements have been prepared on a going concern basis on the strength ofcontinued support disqualified of the promoters bankers / other lenders and signs ofrecovery in general economic scenario. Our opinion is not qualified in respect of thismatter.

2. Lenders to the Company have since exited the approved CDR scheme in view of defaultsbeing made by the Company in meeting its debt obligations as per restructuring schemeapproved by CDR EG hence not considered any obligation as current liability. Interests onsecured loans have been provided in the books of accounts to the extent provided by thelenders.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order2016 ("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' statement on the matters specified in theparagraph 3 and 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 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 the statement of profit and loss and the cash flow statementdealt with by this Report are in agreement with the 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;

e. The matters mentioned in Emphasis of Matter above in our opinion may have anadverse effect on the functioning of the Company.

f. On the basis of the written representations received from directors as on 31st March2019 taken on record by the Board of Directors none of the directors is as on 31st March2019 from being appointed as a director in terms of Section 164 (2) of the Act;

g. 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" and

h. 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:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements Refer Note 2 to the Notes to Accounts attached tofinancial statements;

j. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any; and

k. There was no amount required to be transferred to the Investor Education andProtection Fund in accordance with the relevant provisions of the Act and rules made thereunder.

For H. G. & CO.

Chartered Accountants Firm Registration Number: 013074C

Sd/-
Himanshu Garg
Place : New Delhi Proprietor
Dated : 30.09.2019 M. No.: 403482

Annexure –A to the Independent Auditors' Report the Annexure referred to in ourIndependent Auditors' Report to the members of the Company on the standalone financialyear ended 31st March 2019 we report that: -

1. In respect of fixed assets:

a. The company has been maintaining details showing full particulars includingquantitative details of fixed assets.

b. We have been informed that physical of fixed assets has been conducted by themanagement at reasonable intervals and no material discrepancies were noticed by them.

c. According to the information and explanations given to us the title deeds ofimmovable properties as disclosed in the Financial statements are held in the name ofthe company

2. In respect of inventories:

According to the information and explanations verification given to us the physical ofinventory (excluding stocks lying with third parties) has been conducted by the managementat verification reasonable intervals. The physical of finished goods and raw material hasbeen done on estimation basis from time to time due to the nature of the business andthe cost involved and discrepancies if any were properly dealt with in the accounts. Inrespect of goods inventory lying with third parties these have substantially beenconfirmed by them.

3. The Company has not granted any loans secured or unsecured to companies firmslimited liability partnership or other parties covered in the register maintained undersection 189 of the Companies Act 2013 (‘the Act'). Accordingly paragraph 3 (iii)(a) (b) and (c) of the order is not applicable to the Company.

4. In our opinion and according to the information and explanations given to us theCompany has not granted any loans made any investment given any guarantee or securitysecured or unsecured to any companies firms or other parties as covered under section185 and 186 statements for the of the Act over and above the limits prescribedunder these sections.

5. The Company has not accepted any deposits from the public and therefore thedirectives issued by Reserve Bank of India and provisions of Section 73 to 76 or any otherrelevant provisions of the Companies Act 2013 and rules framed there under do not applyto the Company.

6. As informed to us the Central Government has prescribed maintenance of cost recordsunder section 148(1) of the Companies Act 2013 in respect of manufacturing activities ofthe Company. We have broadly reviewed accounts and records of the Company in thisconnection and are of the opinion that prima facie the prescribed accounts and recordshave been made and maintained. We have not however made a detailed examination of thesame.

7. (a) The Company has not been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Goods and Service TaxCustom Duty Cess and other material statutory dues with the appropriate authorities tothe extent applicable and undisputed amounts of approx. Rs. 13.00 Crores is payable inrespect of provident fund income tax sales tax GST service tax Excise Duty EntryTax value added tax cess and other material statutory dues as at 31 March 2019 for aperiod of more than six months from the date they became payable.

(b) According to the information and explanations given to us the particulars of duesof income tax excise duty service tax value added tax which have not been deposited onaccount of any dispute are as follows:

Name of the Statute Nature of Dues Amount Period to which (in lacs) the amount relates Forum where the dispute is pending
Income Tax Act 1961 Addition in Income 140.00 2009-10 & 2010-11 Income Tax- Appellate Tribunal –New Delhi
Central Excise Act1944 Excise Duty 317.15 2005-06 to 2007-08 High Court of Odisha
91.21 2008-09 to 2012-13 Under Appeal with CESTAT
52.03 2011-12 & 2012-13 Commissioner Appeals Bhubaneshwar
13.63 2014-15 & 2015-16 Custom Excise and Service Tax Appellate Tribunal- Allahabad
4.17 2014-15 Commissioner (Appeal) Ghaziabad
77.21 2006-07 Supreme Court of India
239.61 2014-15 DGCEI New Delhi
Finance Act1994 Service Tax Provisions Service Tax 21.79 2012-13 Additional Commissioner. Sambalpur / Rourkela
Sales Tax Act of Various States Sales Tax 13.70 2010-11 to 2013-14 Before Addl. Commissioner Northern Zone Sambalpur
4554.28 1994-95 to 2013-14 Commercial Tax Tribunal UP
2294.99 1994-95 to 2014-15 Additional Commissioner Grade-2 Appeal-1UP
424.78 2011-12 & 2012-13 Jt. Commissioner Appeal Haryana
810.42 2013-14 Jt. Commissioner Appeal Haryana
438.15 2008-09 to 2010-11 High Court of Odisha
Odisha Entry Tax Act1999 Entry Tax 6.02 2005-06 to 2009-10 Commercial Tax Tribunal Cuttack
23.75 2008-09 to 2010-11 High Court of Odisha

8. The Company had been defaulting in repayment of dues to banks since 2014-15. Theentire outstanding balance has been called by the banks.

9. According to the information and explanations given to us during the year theCompany has not raised any fresh share capital and term loans and hence clause 3 (ix) isnot applicable.

10. According to the information and explanations given to us no fraud on or by theCompany has been noticed or reported during the course of our audit.

11. According to the information and explanations given to us and based on ourexamination of the records the Company has paid / provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of section 197 readwith schedule V to the Act.

12. In our opinion and according to the information and explanation given to us theCompany is not a Nidhi company.

13. According to the information and explanations given to us and based on ourexaminations of the records of the Company transactions with the related parties are incompliance with section 177 and 188 of the Act where applicable and the details have beendisclosed in the financial statements as required under applicable Accounting Standard.

14. According to the information and explanations given to us and based on ourexaminations of the records the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder report.

15. According to the information and explanations given to us and based on ourexaminations of the records the Company has not entered into non-cash transaction withdirectors or person connected with them.

16. The Company is not required to be registered under Section 45 IA of the ReserveBank of India Act 1934. Accordingly the provision of the Clause 3 (xvi) of the order isnot applicable to the Company.

For H. G. & CO.

Chartered Accountants

Firm Registration Number: 013074C

Sd/-
Himanshu Garg
Place : New Delhi Proprietor
Dated : 30.09.2019 M. No.: 403482

Annexure-B to the Independent Auditors' Report the Annexure referred to in ourIndependent Auditors' Report to the members of the Company on the standalone financialstatements for the year ended 31 March 2019 we report that: -

Report on the Internal Financial Controls under Clause (i) of Sub-Section 3 of Section143 of the Companies Act 2013.

We have audited the internal financial controls over financial reporting of Rathi Steeland Power Limited ("the Company") as of 31 March 2019 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal controls over financial reporting criteriaestablished by the Company considering the essential components of internal controlsstated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India ("ICAI").These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and timely preparation of reliablefinancial information as required under the Companies Act 2013 ("the Act")

Auditor's 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 Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") and the Standard on Auditing issued by ICAI and deemed to beprescribed under section 143 (10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ACAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 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 controls based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks 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 toprovide a basis for our audit opinion on the Company's internal financial control systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial controls over financial reporting is a process designedto provided 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 controls 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 authorization 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 material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitation 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 controlsover financial reporting may become inadequate because of the changes in the conditionsor that the degree of compliance with the policies if procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial control system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2019 based on theinternal controls over financial reporting criteria established by the Company consideringthe essential components of internal controls stated in the Guidance Note on audit ofInternal Financial Controls Over Financial Reporting issued by ICAI.

For H. G. & CO.

Chartered Accountants

Firm Registration Number: 013074C

Himanshu Garg
Place: New Delhi Proprietor
Dated : 30.09.2019 M. No.: 403482