To,
The Members of SIDDHARTHA TUBES LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of SIDDHARTHA TUBES LIMITED
("the Company"), which comprise the Balance Sheet as at 31st March 2015, the
Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a
summary of the significant accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements
The Companys 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 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, read with Rule 7 of the Companies (Accounts) Rules, 2014. This
responsibility also includes maintenance of adequate accounting records in accordance with
the provisions of the Act for safeguarding the assets of the Company and for preventing
and detecting frauds and other irregularities; selection and application of appropriate
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 statements that
give a true and fair view and are free from material misstatement, whether due to fraud or
error.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our
audit.
We have taken into account the provision of the Act, the accounting and auditing
standards and matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under
Section 143(10) of the Act. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain responsible assurance about whether
the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
the disclosures in the financial statements. The procedures selected depend on the
auditors judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, the
auditor considers internal financial control relevant to the Companys preparation of the
financial statements that give a true and fair view in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Companys internal financial control. An audit also
includes evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Management, as well as evaluating
the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the financial statements.
Basis for Qualified Opinion
1. As stated in Note No. 10: - Fixed Assets. Company has made provision of depreciation
following straight line method, which is not in accordance with the useful life mentioned
in the Schedule II of Co. Act, 2013. The financial impact is that the Fixed Assets are
overstated, Depreciation is understated and loss is understated to an extent of Rs.10.82
crore each.
2. As stated in Note No. 13 Note, the Company has concluded negotiated settlement dues
with several lenders, and several installments have been paid to them till end March 2015.
However, further installments remain payable as per the agreed schedule, and these lenders
remain outstanding on the Company’s Books. The said payments made upto 31/03/2015,
viz Rs. 28.89 crore (Previous year Rs.25.97 crore) has been accounted for under Other Non
Current Assets, and these will be adjusted / accounted for against the corresponding
outstanding in Secured Loans after full repayment of the NSD amount, and receipt of No
Dues Certificate from the respective Lender.
3. As stated in Note No. 36(b), the accounts of the Company have been prepared on going
concern basis in spite of the fact that the Company has become a Sick Company under Sick
Industrial Companies (Special Provisions) Act, 1985.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations
given to us, except for the effects of the matter described in the Basis for Qualified
Opinion paragraph, the 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
31,2015 and its 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 (Auditors Report) Order, 2015 ("the Order")
issued by the Central Government in terms of Section 143(11) of the Act, we give in the
Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.
2 As required by Section 143(3) of the Act, we report that: (a) We have obtained all
the information and explanations which to the best of 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 the
Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss, and Cash Flow Statement dealt
with by this Report are in agreement with the books of accounts.
(d) In our opinion, the aforesaid 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
31March, 2015, and taken on record by the Board, none of the Director is disqualified as
on 31 March, 2015 from being appointed as a Director in terms of Section 164 (2) of the
Act.
(f) With respect to the other matters to be included in the Auditors 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 explanation given to us: (i) The
Company has disclosed the impact of pending litigations on its financial position in its
Financial Statements at Note no.31.
(ii) The Company has not entered into any long-term contracts including derivative
contracts for which there is any material foreseeable losses; (iii) There has been no
delay, in transferring amounts, if any required to be transferred, to the Investor
Education and Protection Fund by the Company.
|
For and on behalf of |
|
For Rakesh K. Jain & Associates |
|
CHARTERED ACCOUNTANTS |
|
FRN - 011019C |
|
RAKESH JAIN |
| PLACE: INDORE |
PROPRIETOR |
| DATE: 19th September, 2015 |
M.NO.401098 |
ANNEXURE TO INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph 1 under "Report on Other Legal and Regulatory
Requirement"section of our report of even date) (i) In respect of Fixed Assets:
(a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of Fixed Assets.
(b) Some of the Fixed Assets were physically verified during the year by the Management
in accordance with a programme of verification, which in our opinion, provides for
physical verification of all the Fixed Assets at reasonable intervals. According to the
information and explanations given to us no material discrepancies were noticed on such
verification.
(ii) In respect of its inventories:
(a) We are informed that physical verification of inventory has been conducted at
reasonable intervals during the year by the management. In our opinion the frequency of
such verification is reasonable.
(b) In our opinion and according to the information give to us, the procedures of
physical verification of inventory followed by the management are reasonable and adequate
in relation to the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. No material discrepancies
were noticed on physical verification of inventory as compared to the book records.
(iii) The Company has not granted any Loans, Secured or Unsecured, to Companies, Firms
or other parties covered in the Register maintained under Section 189 of the Companies
Act, 2013.
(iv) In our opinion and according to the information and explanations given to us,
there are adequate internal control system commensurate with the size of the Company and
the nature of its business for the purchase of inventory and Fixed Assets and for the sale
of goods and services and during the course of our audit we have not observed any major
weakness in such internal control system. (v) In our opinion and according to the
information and explanations given to us, the Company has not accepted any deposits from
the public within the meaning of section 73 to 76 of the Companies Act, 2013 and the rules
framed there under.
(vi) We have broadly reviewed the cost records maintained by the Company pursuant to
the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the
Central Government under sub-section (1) of the Section 148 of the Companies Act, 2013 and
are of the opinion that, prima facie, the prescribed cost records have been made and
maintained. We have, however, not made a detailed examination of the cost records with a
view to determine whether they are accurate or complete.
(vii) According to the information and explanations given to us, in respect of
Statutory Dues;
(a) The Company has generally been regular in depositing undisputed statutory dues,
including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, VAT Tax,
Wealth Tax, Custom Duty, Excise Duty, and any other Statutory Dues with the appropriate
Authorities.
(b) According to the information and explanation given to us, Statutory Dues under
appeal at various forums aggregating to Rs.634.50 lakh are as under:
| S.No |
Name of the Statute |
Nature of the Dues |
Period |
Amount |
Forum where appeal / matter is pending |
| 1 |
CESTA |
Excise & Custom |
1998-99 |
1594141 |
CESTAT, New Delhi |
|
|
|
2006-07 |
10000000 |
Add. DGFT, New Delhi |
|
|
|
2007-08 |
5591632 |
Commissioner Appeal |
|
|
|
2008-09 |
19242228 |
CESTAT, New Delhi |
|
|
|
2009-10 |
1519095 |
Commissioner Appeal |
|
|
|
2010-11 |
502635 |
CESTAT, New Delhi |
| 2 |
Income Tax |
Income Tax |
2009-10 |
25000000 |
Commissioner Income Tax Appeal |
|
|
|
Total |
63449731 |
|
(c) The Company is not required to transfer any amount to the Investor Education and
Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1
of 1956) and Rules made thereunder.
(viii) As at 31st March 2014 the accumulated losses of the Company are more than fifty
percent of its Net Worth. The Company has incurred an operating Cash Loss of Rs.1443.49
lacs for the year ended 31st of March 2015 (previous year loss of Rs.488.48 lacs).
(ix) In our opinion based on our Audit procedures & according to the information
& explanation given to us, the Company has defaulted in repayment of Secured Dues
aggregating to Rs.177.84 crores in respect of Financial Institutions and Banks.
(x) According to the information and explanation given to us, the Company has not given
any Guarantee for loans taken by others from Banks or Financial Institutions.
(xi) In our opinion and according to the Information and explanations given to us, the
Term Loans have been applied for the purposes for which they were raised.
(xii) To the best of our knowledge and according to the information and explanations
given to us, no fraud by the Company and no material fraud on the Company has been noticed
or reported during the year.
|
For Rakesh K. Jain & Associates., |
|
CHARTERED ACCOUNTANTS |
|
FRN - 011019C |
|
RAKESH JAIN |
| PLACE : INDORE |
PROPRIETOR |
|
M.NO.401098 |
| DATE : 19th September, 2015 |
|
+91-9892691696
