We have audited the accompanying financial statements of Eastcoast
Steel Limited (the Company), which comprise the Balance Sheet as at
March 31, 2014, 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.
Management''s responsibility for the Financial Statements
Management is responsible for 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 Standards notified under the Companies Act, 1956 (the
Act) read with the General Circular 15/2013 dated 13th September 2013
of the Ministry of Corporate Affairs in respect of Section 133 of the
Companies Act, 2013. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and fair presentation of the financial statements that give
a true and fair view and are free from material misstatement, whether
due to fraud or error.
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. 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 disclosures in the financial statements. The procedures
selected depend on the auditor''s judgement, 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 control relevant to the Company''s preparation and
fair presentation of the financial statements 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 entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by 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.
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid 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 :
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2014;
(ii) in the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor''s Report) Order 2003 (the
Order) issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by sub-section (3) of section 227 of the Act, we report
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
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
c. 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.
d. In our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
notified under the Companies Act, 1956 read with the General Circular
15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs
in respect of Section 133 of the Companies Act, 2013;
e. On the basis of the written representations received from the
directors and taken on record by the Board of Directors, none of the
directors is disqualified as on 31st March, 2014, from being appointed
as a director in terms of clause (g) of sub-section (1) of section 274
of the Act.
Annexure referred to in paragraph 1 under the heading of Report on
other legal and regulatory requirements of our Report of even date Re:
Eastcoast Steel Limited (the Company)
1. In respect of its Fixed Assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of f ixed assets.
(b) Fixed assets have been physically verified by the management in a
phased periodical manner as per regular programme of verification,
which in our opinion is reasonable, having regard to the size of the
Company and nature of its assets. No material discrepancies were
noticed on such physical verification.
(c) There are no substantial disposals of fixed assets during the year.
2. In respect of its Inventory:
The Company does not hold any physical inventories. Thus, provision of
clause(ii) of paragraph 4 of the Order is not applicable to the
3. In respect of the loans. secured or unsecured, granted or taken by
the Company to / from companies , f irms or other parties covered in
the register maintained under section 301 of the Act:
(a) The Company has not given any loan during the year to companies,
firms or other parties covered in the Register maintained under Section
301 of the Companies Act, 1956. Consequently, the requirements of
Clauses (iii) (a) to (iii) (e) of paragraph 4 of the Order are not
(b) The Company has taken interest free unsecured loans from two
companies covered in the Register maintained under section 301 of the
Companies Act, 1956. In respect of the said loan, the maximum amount
outstanding at any time during the year is Rs. 29,816,393/- and the
year-end balance is Rs. 25,541,393/-.
(c) In our opinion and according to the information and explanation
given to us, terms and conditions of the loan taken by the Company are
not prima facie prejudicial to the interest of the Company.
(d) The principal amounts are payable over the period of three to five
years. In respect of the said loans, there are no overdue amounts.
4. The Company has not carried on any activity during the year. Hence,
in our opinion clause (iv) and (v) of the paragraph 4 of the Order is
not applicable to the Company.
5. In our opinion and according to the information and explanation
given to us the Company has not accepted any deposits from the public
within the meaning of Section 58A & 58AA of the Companies Act, 1956 and
the Companies (Acceptance of Deposit) Rules, 1975.
6. The Company does not have a formal internal audit system,
Management does not think necessary, establishing an internal audit
system in view of suspension of production. However, according to
information and explanation given to us, its internal control systems
provide reasonable internal checking of its financial transactions.
7. The Company has not carried on any manufacturing operation during
the year. Hence the question of cost record required to be maintained
under section 209 (1)
(d) of the Companies Act, 1956 does not arise.
8. In respect of statutory dues:
(a) According to the information and explanations given and records
produced and examined by us, the Company is regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, investor education and protection fund, employees'' state
insurance, income-tax, professional tax, sales-tax, wealth-tax, service
tax, customs duty, cess and other statutory dues applicable to it.
According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, professional
tax, income-tax, wealth-tax, service tax, sales-tax, customs duty, cess
and other undisputed statutory dues were outstanding, as at 31st March,
2014 for a period of more than six months from the date they become
(b) According to the information and explanation given to us, there are
no dues of sales tax, income tax, wealth tax, service tax, custom duty,
excise duty and Cess which have not been deposited on account of any
9. The Company''s accumulated losses at the end of the financial year
are more than fifty percent of its net worth. The Company has incurred
cash losses in the current and immediately preceding financial year.
10. The Company has not borrowed any money by way of loan from
Financial Institutions, Banks, Debenture holders; hence there is no
question of repayments of dues or default on this account.
11. According to the information and explanations given to us and
based on the documents and records produced 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.
12. In our opinion, the Company is not a chit fund or a nidhi/ mutual
benefit fund/ society. Therefore, the provisions of clause (xiii) of
paragraph 4 of the Order are not applicable to the Company.
13. The Company is not dealing or trading in shares, securities,
debentures and other investments. Therefore, the provisions of clause
(xiv) of paragraph 4 of the Order are not applicable to the Company.
14. According to information and explanation given to us the Company
has not given any guarantee for loans taken by others from bank or
financial institutions. Therefore, the provisions of Clause (xv) of
paragraph 4 of the Order are not applicable to the Company.
15. The Company has not taken any term loan during the year. Therefore,
the provisions of clause (xvi) of paragraph 4 of the Order are not
applicable to the Company.
16. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
17. The Company has not made any preferential allotment of shares to
parties and companies covered under Register maintained under section
301 of the Act.
18. The Company did not have any outstanding debenture during the
19. The Company has not raised any monies by way of public issue
during the year.
20. Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no material fraud on or by the Company has been noticed or
reported during the year.
For Chaturvedi & Shah
Firm Registration No. 101720W
Place : Mumbai Partner
Date : 12th May, 2014 Membership No.: 103141