THE MEMBERS OF
SUPER FORGINGS & STEELS LIMITED
REPORT ON IND AS FINANCIAL STATEMENTS
We have audited the accompanying financial statements of SUPER FORGINGS & STEELSLIMITED ("the Company") which comprise the Balance Sheet as at 31st March 2018the Statement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of changes in Equity for the year then ended and a summary ofsignificant accounting policies and other explanatory information.
MANAGEMENT'S RESPONSIBILITY FORTHE IND AS FINANCIAL STATEMENTS
The Management is responsible for the matters stated in Section 134 (5) of theCompanies Act 2013 (The Act) with respect to the preparation of these FinancialStatements that give a true and fair view of the financial position and financialperformance including other comprehensive income the statement of changes in equity andcash flows of the Company in accordance with the accounting principles generally acceptedin India including the Accounting Standards (Ind AS) specified under Section 133 of theAct read with Rule 7 of the Companies (Accounts) Rules 2014.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities selection and application ofappropriate accounting policies making judgement and estimate that are reasonable andprudent; design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.
In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and the matters which are required to be included in theaudit report under the provision of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act and other applicable authoritative pronouncements issued by theInstitute of Chartered Accountants of India. Those Standards and pronouncements requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind AS financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in thefinancial 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 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 theCompany's Directors as well as evaluating the overall presentation of thefinancialstatements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
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 including the Ind AS of the state of affairs ofthe Company as at 31st March 2018its carry forward loss total comprehensive income itscash flows and changes in equity for the year ended on that date.
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.
(a) In the case of Balance Sheet of the State of Affairs of the Company as at 31stMarch 2018.
(b) In the case of the statement of Profit & Loss of the loss for the year ended onthat date and
(c) In the case of the Cash Flow Statements of the cash flow of the Company for theyear ended on that date.
The effect of "Impairment of Assets"as required by AS-28 has been consideredon the profitability of the Company: In this case please refer point No. 10 of Note No.20 of"Notes of Accounts" where it is stated that the Company has recalculateddepreciation as per new schedule II of the Companies Act 2013 of all old assets beyondthe life which were written off keeping only 5% of the residual value.
The Company is not required to provide depreciation on fixed assets of Dankuni Unit as95% of assets whose life were expired as per revised Companies Act 2013 has been writtenoff keeping 5% of the residual value and the Unit is under closure.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditors'Report) order 2017 (the "Order")issued by the Central Government in terms of Sub- Section (ii) (11) of Section 143 of theAct we give in the Annexure"A" a statement of the matters specified in theorder 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 Accounts as required by law have been kept by theCompany so far as it appears from our examination of those books.
(c) The reports on the accounts of the branch of the Company audited under Section 143(8) of the Act by branch Auditor have been sent to us. We did not audit the financialstatement of Chennai Branch included in these financial statement of company. The branchauditor's report was furnished to us and our opinion is solely based on the report of thebranch auditor.
(d) The Balance Sheet the statement of Profit & Loss and the cash flow statementdealt with by this Report are in agreement with the books of account;
(e) 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;
(f) In our opinion proper Books of Accounts as required by the law have been kept bythe Company so far as it appears from our examination of those books.
(g) On the basis of the written representations received from the Directors as on March31 2018 taken on records by the Board of Directors none of the Directors isdisqualified as on March 312018 from being appointed as a Director in terms of Section164 (2) of the Act.
(h) 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".
(i) With respect of the other matters to be included in the Auditor's Reports inaccordance with Rule 11 of the Company's (Audit and Auditor's) Rules 2014 in our opinionand to the best of our information and according to the explanations give to us.
(i) The Company has disclosed the impact of pending litigations in its financialstatements (refer Point No. 3 of Note No.
(ii) The Company did not have any long term contracts including derivative contractsfor which there were any material foreseeable losses.
(iii) The amount required to be transferred to Investor Education and Protection Fundis not applicable as the Company has incurred loss.
For GORA& COMPANY
(Firm Registration No. 330091E) sd/-
Gora Chand Mukherjee
(Membership No. 017630)
Date: 28th May 2018
ANNEXURE'A'TO THE INDEPENDENT AUDITORS'REPORT
(Referred to in Paragraph 1 under the head Report on Other Legal and RegulatoryRequirements of our report of even date)
We report that :-
(i) (a) The Company is maintaining proper records showing full particularsincludingquantitative details and situation of fixed assets
(b) The fixed assets except fixed assets of Dankuni unit were physically verified bythe management in accordance with the programme of verification which in our opinionprovides for physical verification of all major items of fixed assets at reasonableinterval during the year and no material discrepancies were noticed on such verification.
(c) The Title Deeds of immovable properties are held in the name of the Company.
(ii) (a) As explained to us inventories were physically verified during the year bythe management at reasonable intervals except for Dankuni Unit no material discrepancieswere noticed on such verification.
(b) In our opinion and according to the information and explanations given to us theprocedure of physical verification of inventories followed by the management appear to bereasonable and adequate in relation to the size of the Company and nature of its business.
(c) In our opinion the Company is maintaining proper records of inventory and nomaterial discrepancies were noticed on physical verification.
(iii) According to the information and explanations given to us the Company has notgranted loans secured or unsecured to Companies Firms or other Parties covered in theregister maintained under section 189 of the Companies Act.
(iv) The Company has not made any loans or investments during theyear as per provisionof Section 185 & 186 of the Companies Act 2013.
(v) The Company has not accepted any deposits during the year.
(vi) We have broadly reviewed the books of accounts maintained by the company pursuantto the rules prescribed by the Central Government for maintenance of cost records u/s148(i) of the Act and are of the opinion that prima facie the prescribed accounts andrecords have been kept and maintained.
(vii) According to the information and explanation given to us in respect of statutoryand other dues:
(a) The Company has been depositing undisputed statutory dues including ProvidentFund Sales Tax Excise Duty GST and other material statutory dues in time. The Companyhas not paid deferred Sales Tax liability.
(b) The details of claims made by statutory authorities which have not been depositedon account of disputes are given below:
|Particulars ||Financial year to which the matter pertains ||Forum where the matter is pending ||Amount Rs. (In Lac) |
| ||EarlierYear ||Deputy Commissioner Central Circle Kolkata (Referred to I.T.O) ||24.91 |
|Income Tax ||-- do-- ||Deputy Commissioner Central Circle Kolkata (Referred to I.T.O) ||16.84 |
| ||-- do-- ||Deputy Commissioner Central Circle Kolkata (Referred to I.T.O) ||57.95 |
| ||-- do-- ||Asst. Commissioner Commercial Taxes Chow ringhee Circle ||113.68 |
|Sales Tax || ||Asst. Commissioner Commercial Taxes Chowringhee Circle ||0.99 |
| ||-- do-- ||Asst. Commissioner Commercial Taxes Chowringhee Circle ||48.25 |
|Entry Tax ||-- do-- ||Asst. Commissioner Commercial Taxes Chowringhee Circle (under Judicial consideration of Kolkata High Court) ||14.99 |
| ||-- do-- ||Asst. Commissioner Commercial Taxes Chowringhee Circle (under Judicial consideration of Kolkata High Court) ||30.81 |
|Excise Duty ||-- do-- ||Custom Excise & Service Tax Applt. Tribunal Eastern Zonal Bench Kolkata (under Judicial consideration of Kolkata High Court). ||303.54 |
| ||Current Year ||Commisioner of Central Excise (under Judicial consideration of Kolkata High Court). ||973.53 |
(viii) The accumulated losses of the Company are more than its net worth as at the endof the year. The Company has incurred cash losses during the current year as well as inthe previous year.
(ix) The Company did not raise any money by way of public offer.
(x) The default in non-payment of dues to Financial Institutions and Non-ConvertibleDebentures dues does not arise as the Company has entered into negotiated settlement withM/s. Life Insurance Corporation of India for NCD of Rs.300.00 lacs and Unsecured Loan ofRs.175.00 lacs as principal value to be repaid over a period of 5 (five) years withinterest @12.5% on reducing balance method. Similarly the Company has entered intonegotiated settlement with SASF (IDBI) for Term Loan of Rs.450.00 lacs at their principalvalue to be repaid over a period of 5 (five) years with interest @ 12.5% on reducingbalance method in both cases the Company is regular in making payment of itsobligations. The Company has also arrived at One Time Settlement (OTS) with State Bank ofIndia (formerly State Bank of Bikaner & Jaipur - SBBJ). As per compromise settlementthe amount payable to SBBJ stood at Rs. 5.56 crores and the chargeable interest thereuponshall be 10% p a from February 2016. The prinicipal amount shall be paid in a period of 3years.
In case of Canara Bank the account has become NPA and hence the Company is notproviding interest and the same is explained in Point No. IV of Note No. 20.
(xi) According to the informations given to us the Company has paid/provided formanagerial remuneration in accordance with the requisite approvals of the provisions ofSection 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company and as such Paragraph 3 (xii) of the Order is notapplicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in point no. 9 A & B of note no. 20 as required bythe applicable accounting standards.
(xiv) The Company has not made any preferential allotment or private placement ofshares 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 the Company has not entered into non-cash transactions withDirectors or persons connected with them. Accordingly Paragraph 3 (xv) of the Order isnot applicable.
(xvi) The Company is not required to be registered under Section 45-1A of the ReserveBank of India Act 1934.
For GORA& COMPANY
(Firm Registration No. 330091E)
Gora Chand Mukherjee
Membership No. 017630
Date: 28th May 2018
ANNEXURE'B'TOTHE INDEPENDENT AUDITORS'REPORT
Annexure"B"to the Independent Auditors'Report of even date on the StandaloneFinancial Statement of SUPER FORGINGS & STEELS LIMITED.
[Referred to in Paragraph 2 (h) under the heading (Report on Other Legal and RegulatoryRequirements'of our Report of even date to the financial statements of the Company for theyear ended on 31st March 2018.]
Report on the Internal Financial Controls under Clause (i) of Sub-Section 143 of theCompanies Act 2013 ("the Act").
We have audited the internal financial controls over financial reporting of SUPERFORGINGS & STEELS LIMITED ("the Company") as on the 31st March 2018 inconjunction with our audit of the financial statements of the Company for the year endedon that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial control based on "the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal controlstating 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 fraud and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's financial control overfinancial reporting based on our audit. We conducted our audit in accordance with theGuidance Note on audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143 (10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControl and both issued by the Institute of Chartered Accountants of India. ThoseStandard and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial control over financial reporting was established and maintained and if suchcontrol operate effectively in all material respects.
Our audit involves performing procedure to obtain audit evidence about the adequacy ofthe internal financial control system over financial reporting and their operatingeffectiveness. Our audit of internal financial control over financial reporting includesobtaining and understanding of the internal financial control over financial reportingassessing the risk that a material weakness exists and testing evaluating the design andoperating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the Auditors'judgement including the assessment of the risks of thematerial 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 controls systemover 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 the 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 ofthe records 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 statement inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorizations 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 would have a material effect on the financial statements.
Inherent Limitations of Internal Financial Control Over Financial Reporting
Because of the inherent limitation of internal financial control 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 projection 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 the changes in conditions orthat the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31st March 2018 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.
For GORA& COMPANY
(Firm Registration No. 330091E)
Gora Chand Mukherjee
Membership No. 017630
Date: 28th May 2018