Maharashtra Elektrosmelt Ltd merged Auditor Reports

MAHARASHTRA ELEKTROSMELT LIMITED ANNUAL REPORT 2009-2010 AUDITORS REPORT To The Members of Maharashtra Elektrosmelt Limited We have audited the attached Balance Sheet of Maharashtra Elektrosmett Limited as at 31st March, 2010, the Profit and Loss Account and Cash Flow Statement 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. We conducted our 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 mis-statement. 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by The Companies (Auditors Report) Order 2003 (as amended) issued by the Central Government of India in terms of section 227 (4A) of the Companies Act 1956, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order. Further to our comments in the Annexure referred to above, we report that: (i) 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. (ii) 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; (iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; (iv) 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 sub-section (3C) of section 211 of the Companies Act, 1956 to the extent applicable. (v) The provisions of Section 274(1)(g) of the Companies Act, 1956 are not applicable to the Government Company in terms of Notification No. GSR 829(E) dated 21st October, 2003 issued by the Department of Company Affairs, Ministry of Finance, Government of India. (vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes thereon, 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 : (a) in the case of the Balance Sheet, of the state of Affairs of the Company as at 31st March, 2010; and (b) in the case of the Profit and Loss Account, of the profit for the year ended on that date and (c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date. For Ghalla & Bhansali Firm Registration Number: 103142W Chartered Accountants Sd/- Yogesh RayjiAmal Partner M. No. 111636 Place: New Delhi Date : 26th May, 2010 Annexure to the Auditors Report (Referred to in our report of even date) 1) a) As per the information and explanations given to us, the Fixed Assets register showing full particulars including quantitative details and situation of Fixed Assets is compiled by the Company. b) As per information and explanations given to us the Fixed Assets, except those held by the employees under Furniture hire scheme have been physically verified by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable having regard to the size of the operations of the Company and on the basis of explanations received no material discrepancies were noticed during the verification. c) In our opinion, fixed assets disposed off during the year were not substantial and therefore do not affect the going concern assumption. 2) a) As per information and explanations given to us the inventory has been physically verified by the management at reasonable intervals. The inventories in transit as at 31.03.2010 have been verified by the management with reference to subsequent receipt of materials. b) In our opinion and according to the information and explanation given to us, the procedures for physical verification of inventories followed by the management are reasonable and adequate in relation tot he size of the Company and nature of its business. c) In our opinion, and according to the information and explanations given to us, the Company has maintained proper records of its inventories. The discrepancies noticed on verfication between the physical stocks and the book records have been adequately dealt with in the books of account. 3 (a) According to the information and explanation given to us, the company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly clause 4(iii) (b) to (d) of the order is not applicable to the Company. (b) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured, from Companies, firms and other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly clause 4(iii) (f) to (g) of the order is not applicable to the Company. 4. In our opinion and according to the information and explanations given to us, the company has adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. Further, on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have we been informed of any instance of continuing failure to correct major weaknesses in internal control. 5. According to the information and explanations given to us, there are no contracts and arrangements referred to in Section 301 of the Companies Act, 1956, particulars of which need to be entered into a register maintained under Section 301 of the Act. Accordingly clause 4(v)(b) of the order is not applicable to the Company. 6. The Company has not accepted any deposits during the year from the public within the meaning of the directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA or any other relevant provisions of the Act and the rules framed there under, other than the amount retained under Employees Family Benefit Scheme for which exemption under Section 58A of the Companies Act, 1956 has been obtained by the Company. 7. In our opinion, the Companys internal audit system, generally commensurate with the size and nature of its business, is required to be strengthened further with regard to enlarging the scope and frequency of the coverage. 8. According to information and explanations given to us the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Act. 9. a) According to the information and explanations given to us, the Comapny is generally regular in depositing with appropriate regulatory authorities undisputed statutory dues including. Provident Fund, Investor Education and Protection Fund, Income-Tax, Sales-Tax, Service Tax, Custom Duty, Excise Duty/Cess and Profession Tax. b) According to the information and explanations given to us, no undisputed dues payable in respect of Provident Fund, Income Tax, Sales Tax, Excise Duty, Service Tax, Profession Tax and Cess were outstanding as at 31st March, 2010 for a period of more than six months from the date they became payable. c) According to the information and explanations given to us, there are no dues of Sales Tax/Income Tax/ Custom Duty/Wealth Tax / Service Tax / Excise Duty / Cess that have not been deposited on account of any dispute, other than those mentioned below: Period Amount Forum where dispute is Pending (Rs.) A) EXCISE DUTY: Financial Year: 1995-96 9,81,200 Commissioner Central Excise (Appeals) - Nagpur 1996-97 2,91,410 Commissioner Central Excise (Appeals) - Nagpur 1997-98 74,89,466 Commissioner Central Excise (Appeals) - Nagpur For the period: Apr 2001 to Mar. 2002 6,20,452 Commissioner, Central Excise - Nagpur July 2000 to Commissioner, Central Excise - Sept. 2001 6892496 Nagpur Apr 2001 to Asstt Commissioner, Central Feb 2004 155,79,066 Excise - Chandrapur B) MUNCIPAL TAX: Financial Year 1983-84 to 2002-03 1,29,98,650 High Court, Nagpur C) GRAM PANCHAYAT/ ZILA PARISHAD CESS: 1973-1974 to 1982-83 5,32,000 Government of Maharashtra D) INCOME TAX: 2005-2006 1,27,45,359 Commissioner Appeals 2006-2007 11,62,102 Commissioner Appeals 10. The company has neither accumulated losses as at March 31, 2010 nor it has incurred any cash loss during the financial year ended on that date and the immediately preceding financial year. 11. According to information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders during the year. 12. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 13. The Company is not a chit or a nidhi/mutual benefit fund/society, therefore, the clause 4(xiii) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company. 14. The Company has not dealt or traded in shares, securities, debentures and other investments. Hence the question of maintenance of proper records of the transactions and contracts and making timely entries in the same does not arise. 15. According to information and explanation given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions and hence the question of terms and conditions being prejudicial to the interests of the Company does not arise. 16. According to information and explanations given to us and the records examined by us, the Company has not availed Term Loans from Banks during the year. 17. According to information and explanation given to us, in our opinion funds raised on short-term basis have not been used for long-term purposes. 18. According to information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. 19. The Company has not issued any debentures in the current year. Hence the issue of creation of charge does not arise. 20. The Company has not raised money by public issue and hence the question of disclosure by management on the end use of money raised by public issue and its verification does not arise. 21. In our opinion and according to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the year. For Ghalla & Bhansali Firm Registration Number: 103142W Chartered Accountants Sd/- Yogesh RayjiAmal Partner M. No. 111636 Place: New Delhi Date : 26th May, 2010