To
The Members of Southern Ispat & Energy Ltd.
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Southern Ispat
& Energy Ltd ("the Company"), which comprise the Balance Sheet as at
March 31, 2015, and the Statement of Profit and Loss and Cash Flow Statement for the year
then ended, and a summary of significant accounting policies and other explanatory
information in which the returns for the year ended on that date audited by the branch
auditors of the company s branches at Jabalpur(M.P.) and Mumbai (M.H.) are incorporated.
Management’s Responsibility for the Standalone Financial Statements
The Company s 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
and presentation of these standalone 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.
Auditor’s Responsibility
Our responsibility is to express an opinion on these standalone financial statements
based on our audit. We have taken into account the provisions 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 reasonable 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 auditor
s 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 Company s 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 whether the Company has in place an adequate internal financial controls system
over financial reporting and the operating effectiveness of such controls. An audit also
includes evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Company s Directors, 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 standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid standalone 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 31 March 2015 and its profit and its cash flows for the year ended on that date.
Emphasis of Matters
We draw attention to the following matters in the notes to the financial statements:-
a. Note No.3 to the financial statements which describes regarding certain disclosure
relating to Micro / Small / Medium Enterprises.
b. Note No.4 to the financial statements which describe regarding non provision on
Loans & advances which seems to be irrecoverable/ doubtful.
c. Note No.7 to the financial statements which describes regarding confirmations of
debtors, creditors, loans & advances, Secured Loans subject to reconciliation if any.
d. Note No.10 (b) to the financial statements which describe gratuity calculation is
not as prescribed in AS 15.
e. Note No.16 to the financial statements which describes regarding non provision on
Interest on over dues of pending statutory dues.
f. Note No. 17 to the financial statements which describes non compliance and non
filing of e-forms related to capital increase and share allotment to members
Our opinion is not modified in respect of these matters.
Other Matter
We did not audit the financial statements / information of two branches included in the
standalone financial statements of the company whose financial statements reflect total
assets of Rs 5721.63 Lacs as at 31stMarch 2015 and total revenues of Rs
12584.67 lacs for the year ended on that date, as considered in the standalone financial
statements. The Financial statements / Information of these branches have been audited by
the branch auditor whose report have been furnished to us, and our opinion in so far as it
relates to the amount and disclosure included in respect of these branches, is based
solely on the report of such branch auditors.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor s Report) Order, 2015 ("the Order")
issued by the Central Government of India in terms of sub-section (11) of section 143 of
the Act, we give in the Annexure a statement on the matters specified in the paragraph 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 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 and proper returns
adequate for the purposes of our audit have been received from the branches not visited by
us.
(c) The reports on the accounts of the branch offices of the company audited under
section 143(8) of the Act by the branch auditors have been sent to us and have been
properly dealt with by us in preparing this report.
(d) In our opinion the balance sheet, the statement of profit and loss and the cash
flow statement dealt with by this Report are in agreement with the books of account and
with the returns received from the branches not visited by us;
(e) In our opinion, the aforesaid standalone financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014;
(f) On the basis of the written representations received from the four directors as on
31 March 2015 taken on record by the Board of Directors, none of the above directors is
disqualified as on 31 March 2015 from being appointed as a director in terms of Section
164 (2) of the Act; Further we are unable to comment on disqualification of remaining two
directors as at 31 March 2015 from being appointed as a director in terms of Section 164
(2) of the Act, as board has not received any written representations from them and
(g) In our opinion and to the best of our information and according to the explanations
given to us, we report as under with respect to other matters to be included in the
Auditor s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules,
2014:
(i) The Company has disclosed the impact of pending litigations on its financial
position in its financial statements Refer Note no 2 to the financial statements
(ii) The Company did not have any long-term contracts including derivative contracts
including derivative contracts for which there were any material foreseeable losses
(iii) There were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the company.
ANNEXURE TO THE AUDITORS’ REPORT
The Annexure referred to in our Independent Auditors Report to the members of the
Company on the financial statements for the year ended 31st March 2015, we
report that :
i) a) The Company has maintained proper records showing full particulars including
quantitative details and situation of fixed assets.
b) The major assets have been physically verified by the management on a sample basis
during the year and in our opinion, the frequency of verification is reasonable having
regard to the size of the company and the nature of its assets. As informed to us, no
material discrepancies noticed on such verification.
ii) a) The inventory has been physically verified by the management during the year and
in our opinion, the frequency of verification is reasonable.
b) In our Opinion and according to the Information and explanations given to us, the
procedure of physical verification of inventories followed by the management is reasonable
and adequate in relation to the size of the company and the nature of its business.
c) In our opinion the company has maintained proper records of inventory. The
discrepancies noticed on verification between physical stocks and book records were not
material in relation to the operations of the company and have been properly dealt with in
the books of accounts.
iii) The Company has not granted any loan to company 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 procedures commensurate with the size of the company and the
nature of its business with regard to the purchase of inventory, fixed assets and with
regard to the sale of goods & services. Further, on the basis of our examination of
the books and records of the Company, carried out in accordance with the generally
accepted auditing practices in India, we have neither come across nor have we been
informed of any instances of major weakness in the aforesaid internal control procedures.
v) Based on our scrutiny of the company s records and according to the information and
explanation provided by the management, in our opinion, the Company has not accepted any
loans or deposits which are deposits within the meaning of Rule 2(b) of Companies
(Acceptance of Deposit s) Rules,2014.
vi) We have broadly reviewed the records maintained by the Company pursuant to the
rules made by the Central Government for the maintenance of cost records under section
148(1) of the Act and we are of the opinion that, prima facie, the prescribed accounts and
records have been made and maintained. However, we have not made a detailed examination of
the records.
vii) a) On the basis of our examination of records and according to the information and
explanation given to us, the company is regular in depositing with appropriate authorities
undisputed statutory dues including provident fund, employees state insurance, income tax,
sales tax, wealth tax, service tax, custom duty, excise duty, vat, cess and other
statutory dues with the appropriate authorities, except in certain cases where dues have
been deposited after due date along with Interest charged thereon and there are no
undisputed statutory dues as above which are outstanding as at the last day of the
financial year concerned for a period of six months from the date they become payable
except TDS Rs 19.57 Lacs, VAT Rs 0.38 Lacs, Service tax Rs 32.62 Lacs, PF Rs 1.95 Lacs,
ESIC Rs 0.50 Lacs, MCA Filing Fee Rs 143.20 Lacs.
b) However as per records and according to the information and explanation given to us,
the following dues of sales tax, wealth tax, custom duty, excise duty, vat have not been
deposited by the company with the concerned authorities on account of dispute :-
| Name of the statute |
Nature of the dues |
Amount (Rs. In Lacs) |
Period to which the amounts relate |
Forum where pending |
| Kerala Commercial Taxes |
Commercial Taxes, Value Added Tax |
30.74 |
2005-06 |
Sales Tax Appellate Tribunal, Additional Bench, Palakkad |
|
|
120.45 |
2006-07 |
|
|
|
2.80 |
2006-07 |
|
|
|
105.06 |
2007-08 |
Assistant Commissioner (Assessment), Commercial Taxes, Palakkad |
c) According to information and explanation provided by the management, there was no
amount required to be transferred to investor education and protection fund in accordance
with relevant provisions of the Companies Act,1956(1of 1956) and rules made there under.
viii) The Company has neither accumulated losses as at the end of the financial year,
nor it has any cash loss either during the current financial year or in the immediately
preceding financial year.
ix) In our opinion and according to the information and explanations given to us, the
Company has defaulted in repayment of dues to State Bank of India amounting to Rs.319.57
Lacs. Further, State Bank of India has assigned Advances to ARCIL under section 5 of
SARFAESI Act, Vide Assignation Agreement Dated 26.03.2014 together with all underlying
securities, rights, title and interest in respect thereof.
x) As informed to us by the Management of the Company, the company has not given any
guarantee for loans taken by others from banks or financial institutions.
xi) The Company has not obtained any term loans from any banks or Financial
Institutions.
xii) During the course of our examination of the books and records of the Company
carried out in accordance with the generally accepted auditing practices in India, we have
neither come across any instance of fraud on or by the Company, noticed and reported
during the year, nor have we been informed of such case by the Management.
|
For, SUNIL JOHRI & ASSOCIATES |
|
CHARTERED ACCOUNTANTS |
|
FIRM REG. NO. 005960C |
|
Sd/- |
|
SUNIL JOHRI |
| PLACE: RAIPUR (C.G.) |
PARTNER |
| DATED: 30.05.2015 |
MEMBERSHIP NO: 074654 |
+91-9892691696
