Titagarh Steels Ltd merged Auditor Reports

TITAGARH STEELS LIMITED AUDITORS REPORT TO THE MEMBERS OF TITAGARH STEELS LIMITED We have audited the attached Balance Sheet of TITAGARH STEELS LIMITED (Formerly Titagarh Industries Limited) as at 31st March, 2009 and also the Profit and Loss Account and the 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 have 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 misstatements. 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditors Report) Order, 2003 as amended by Companies (Auditors Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 we annex herewith a statement on the matters specified in paragraphs 3 and 4 of the said order. Further to our comments in the Annexure referred to above, we report that 1. 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. 2. 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. 3. The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account. 4. In our opinion the Balance Sheet, Profit & Loss Account, and Cash Flow Statement, dealt with by this report comply with the accounting standards to the extent applicable referred to in sub-section (3C) of section 211 of the Companies Act, 1956. 5. On the basis of written representations received from the Directors and taken on record by the Board of Directors, none of the Director is disqualified as on 31st March, 2009 from being appointed as a Director in terms of Clause(g) of subsection (1) of section 274 of the Companies Act, 1956. 6. In our opinion and to the best of our information and according to the explanations given to us, the accounts together with Notes thereon give the information required by the Companies Act, 1956 in the manner so required give true and fair view in conformity with accounting principles generally accepted in India. Save and except non-provision of fall in value of long term investment to the extent as stated in point 20 of Schedule 19. i) In the case of Balance Sheet of state of affairs of the Company as at 31st March, 2009. ii) In case of Profit & Loss Account of the Loss for the year ended on that date. iii) In case of Cash Flow Statement of the cash flows for the year ended on that date. ANNEXURE REFERRED TO IN PARAGRAPH 2 OF OUR AUDITORS REPORT OF EVEN DATE OF THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2009 On the basis of such checks as we considered appropriate and in terms of information and explanations given to us, we state that i) a) The Company has generally maintained proper records showing particulars including quantitative details and situation of fixed assets. b) As explained to us, fixed assets according to the practice of the Company are physically verified by the Management at reasonable intervals in a phased manner, which in our opinion is reasonable looking to the size of the Company and the nature of its business. According to the information and explanations given to us, no significant discrepancies were noticed on such verification. c) The Company has not disposed off any substantial part of its fixed assets so as to affect the going concern status of the Company. ii) a) As explained to us, Inventories have been physically verified during the year by the management. b) The procedures explained to us, which are followed by the management for physical verification of inventories are in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business. c) On the basis of our examination of the inventory records of the Company, we are of the opinion that the Company is maintaining proper records of its inventory. Discrepancies which are noticed on physical verification of inventory as compared to their book records have been properly dealt with in the books of account. iii) As per the information and explanation given to us the Company has not taken/granted any secured or unsecured loan from/to Companies, Firms and Other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Hence, the comments in clauses iii(a) to iii(g) of the said order are not applicable to the Company. IV) In our opinion and according to the information and explanations given to us, there is generally adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for sale of goods. During the course of our assessment, so far no weakness in internal control has come to our notice. v) a) On the basis of audit procedures performed by us and according to the information, explanations and representations given to us, we are of the opinion that all transactions in which Directors were interested as contemplated under section 297 and sub-section (6) of Section 299 of the Companies Act, 1956 are entered in the register maintained under section 301 of the said Act. b) In our opinion and according to the information and explanations and representations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 exceeding the value of Rupees five lacs in respect of any party during the year have been made at prices which are reasonable having regard to comparable quotations/contracted rate of principal customers. vi) As per information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section, 58A and 58AA of the Companies Act and the rules framed thereunder. vii) On the basis of the internal audit reports broadly reviewed by us, we are of the opinion that the coverage of Internal audit functions carried out by a firm of Chartered Accountants appointed by the management is commensurate with the size of the Company and the nature of its business. viii) We have broadly reviewed the books of accounts maintained by the Company pursuant to rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of the Companys product to which the said rules are made applicable and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate. ix) a) According to the records of the Company, it has been generally regular in depositing the undisputed statutory dues including Sales Tax, Provident Fund, Employees State Insurance, Income Tax, Customs Duty, Excise Duty, Cess, Service Tax, Investor Education & Protection Fund and other statutory dues with the appropriate authorities and no undisputed amount of statutory dues as mentioned here in above were outstanding for a period of more than six months from the date they became due as at the end of the year. b) On the basis of our examination of the documents and records; the following disputed statutory dues which have not been deposited with the appropriate authorities are as under: Nature of Amount Forum where the Dues (Rs. in Lacs) dispute is pending Excise Duties 246.15 Appellate Authority Sales Tax and 11.34 Deputy Commissioner Turnover Tax Appeal x) The Company has accumulated losses at the end of the financial year but it has not incurred cash losses both in the financial year under report or in the immediately preceding financial year. xi) Based on our audit procedures and on the basis of information and explanations given by the Management, we are of the opinion that the Company has not defaulted in the payment of dues to Financial Institutions, Banks and Debenture holders. xii) As explained to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or any other securities. xiii) The Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of the clause of the said Order are not applicable to the Company. xiv) The Company is not dealing in or trading in Shares, Securities, Debentures and other Investments. Accordingly, the provisions of Clause 4(xiv) of the Order are not applicable to the Company. xv) According to the information and explanations given to us and the representation made by the management, the Company has not given any guarantees for loan taken by other from any bank or financial institutions. xvi) On the basis of records examined by us and relying on the information and explanations obtained by us regarding the end use of different loans, we have to state that, there is no fresh term loan taken by the Company during the year. xvii) According to the information and explanations given to us and on an overall examination of the Financial Statements of the Company and after placing reliance on the reasonable assumptions made by the Company, classification of long term and short term usage of funds, we are of the opinion that the funds raised by the Company on short term basis has not been used for long term investment. xviii) According to information and explanations given to us, the Company has not made any preferential allotment of shares to Companies, Firms and other parties covered in the register maintained u/s. 301 of the Companies Act. xix) According to the information and explanations given to us during the period covered by our Audit Report, the Company has not issued any debenture. xx) The Company has not raised any money by public issue during the year and hence the question of disclosure and verification of end use of such monies does not arise. xxi) According to the information and explanations given to us and to the best of our knowledge and belief, no fraud on or by the Company, has been noticed or reported by the Company during the year. For and on behalf of SAILARPURIA & PARTNERS 7, Chittaranjan Avenue Chartered Accountants Kolkata-700 072 ANAND PRAKASH Partner The 29th day of June, 2009 Membership No. 56485