Krishna Ferro Products Ltd Auditor Reports

KRISHNA FERRO PRODUCTS LIMITED ANNUAL REPORT 2011-2012 AUDITORS REPORT The Members Krishna Ferro Products Limited 1. We have audited the attached Balance Sheet of M/S KRISHNA FERRO PRODUCTS LIMITED, MANDIAKUDAR, CHUNGIMATI-770034, as at 31st March 2012, the Profit & Loss Account and Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted the audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis of our opinion. 3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in the paragraphs 4 and 5 of the said Order. 4. Further to our comments in the Annexure referred to in paragraph (3) above, 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 purpose of our audit; (b) In our opinion, proper Books of Account as required by Law have been kept by the Company so far as appears from our examination of those books; (c) The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of Account; (d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in section 211(3C) of the Companies Act, 1956 to the extent applicable. (e) On the basis of the written representation, received from the directors taken on record by the board of directors as on 31st March 12. We report that none ofthe Directors is disqualified as on 31st March 12 from being appointed as a Director in terms of Section-274(1)(g) of the Companies Act 1956. (f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012 ii. In the case of the Profit and Loss Account, of the profits for the year ended on that date. iii. In the case of Cash Flow Statement, of the cash flows for the year ended on that date. For K. D. LATH & COMPANY Chartered Accountants sd/- Place: Rourkela SUDHIR LATH, Partner Dated: 22nd June, 2012 Membership No. 59396 FRN. 306011 E ANNEXURE TO THE AUDITORS REPORT: Referred to in Paragraph (3) of our report of even date on the accounts for the year ended 31st March, 2012 of Krishna Ferro Products Limited. i. a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets. b) Fixed Assets of the company were physically verified by the management during the year at reasonable intervals and no material discrepancies were noticed on verification. c) There is no disposal of a substantial part of fixed assets during the year; therefore, the effect, if any, as going concern does not arise. ii. a) The stock of finished goods, stores, spare parts and raw materials have been physically verified by the management at reasonable intervals. b) In our opinion and according to the information and explanation given 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) No discrepancies were noticed on verification of physical stock as compared to book records. iii. a) The Company has not granted unsecured loans to Companies/Firms or Other parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore, the provisions of clause 4(iii) (a) to (d) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company. b) The company has taken unsecured loans from Companies/Firms or Other parties covered in the register maintained under section 301 of the Companies Act, 1956. No. of Opening balance of Maximum amount involved Year end balance Parties Loan (Rs. In Lacs) in the transaction of loan 5 653.34 670.63 30.62 c) The rate of interest and other terms and conditions on which unsecured Loans have been obtained from Companies and other parties are not, prima- facie, prejudicial to the interest of the Company. d) Payment of the Principal amount and interest wherever is applicable, are regular. iv. In our opinion and according to the information and explanations given to us there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business, for the purchase of raw materials including components, stores, plant and machinery, equipments and other similar assets and with regard to sale of goods & services. To the best of our knowledge, we noticed no major weaknesses in internal control during the course of our audit. v. a) In our opinion and according to the information given to us, the transactions that need to be entered into the register in pursuance of section 301 of the Companies Act, 1956, have been entered. b) In our opinion and according to the information and explanation given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of Rupees Five Lakhs have been entered into during the financial year at price which are reasonable having regard to the prevailing market price at the relevant time. vi. In our opinion and according to information and explanations given to us, the Company has not accepted any deposits from public as per the provisions of section 58A, 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975, where applicable, with regard to deposits accepted from the public. vii. In our opinion the company has an internal audit system commensurate with its size and nature of its business. viii. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. ix. a) According to the records of the Company, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities. According to the information & explanation given to us, no undisputed statutory dues were in arrear as at 31st March, 2012, for a period of more than six months from the date they became payable. b) The disputed statutory dues aggregating Rs 15.05 Lacs that have not been deposited on account of disputed matters pending before appropriate authorities are as under: Name of Nature of Year Amount Forum where the Status Dues (in Rs.) pending ESI Act ESI Mar 01 to 1,54,728/- Regional Director Mar 03 ESI Corporation BBSR Entry Tax Entry Tax 2002-03 1,94,874/- Asst. Commissioner Act 2001-02 1,25,484/- of Sales Tax Sundergarh Range, Rourkela 2003-04 3,04,676/- Addl/Commissioner S.T Cuttack Sales Tax & CST 2005-06 5,17,365/- Joint Commissioner VAT Law of Sales Tax Sundergarh Range, Rourkela Sales Tax & VAT 2005-07 2,07,654/- Deputy Commissioner VAT Law of Sales Tax Sundergarh Range, Rourkela x. The Company has no accumulated losses and has not incurred cash losses in the financial year covered by our audit and immediately preceding financial year. xi. On the basis of the verification of records and information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions, banks and debenture holders. xii. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. xiii. The Company does not carry on the business of a chit fund. xiv. The Company does not deal or trade in shares, securities, debentures and other investments. xv. According to information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. xvi. According to the records of the company, term loans have been applied for the purpose for which they were obtained. xvii. According to the information and explanations given to us, the cash flow statement examined by us and on an overall examination of the balance sheet of the company, we report that funds raised on short-term basis have not been used for long term investment. xviii. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act. xix. The Company has issued 0% unsecured Non Convertible Debenture to M/S Krishna Re-Rollers Pvt. Ltd. during the year. The said debentures are unsecured and no charge or security is required to be created in respect of debenture issued. xx. During the year, the Company has not raised any money by public issues. xxi. Based on the audit procedure performed and the representation obtained from the management, we report that no case of fraud on or by the Company has been noticed or reported during the year under audit. For K. D. LATH & COMPANY Chartered Accountants sd/- Place: Rourkela SUDHIR LATH, Partner Dated: 22nd June, 2012 Membership No. 59396 FRN. 306011E