1. We have audited the attached Balance Sheet of EASTCOAST STEEL
LIMITED (the Company) as at 31st March 2012, the Statement of
Profit and Loss and the Cash Flow Statement for the year ended on that
date. These financial statements are the responsibility of the
Company''s management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. 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 prepared 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 management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Companies (Auditor''s Report) Order, 2003
(Order) 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 paragraphs 4
and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
(a) We have obtained all the information & explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
(b) In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appears from our examination of the
(c) The Balance Sheet, Statement of Profit and Loss and the Cash flow
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash flow dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956;
(e) On the basis of written representation received from the directors
as on 31st March 2012, and taken on the record by the board of
directors , we report that none of the directors are disqualified as at
31s1 March, 2012 from being appointed as a director u/s 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 read together with the
significant accounting policies and notes thereof give the information
required by the Companies Act, in the manner so required and present 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 Statement of Profit and Loss , of the Loss for
the year ended on that date; and-
iii. In the case of Cash flow Statement, of the cash flows for the year
ended on that date.
ANNEXURE TO THE AUDITOR''S REPORT RE : EASTCOAST STEEL LIMITED
REFERRED IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATE
1. In respect of Fixed Assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified by the management during
the year. No material discrepancies were noticed during such
(c) The Company has not disposed off significant amount of fixed assets
during the year and therefore do not affect the going concern status of
2. In respect of Inventory :
The Company does not hold any physical inventories. Thus provision of
clause (ii) of paragraph 4 of the Order is not applicable .
3. In respect of the loans, secured or unsecured, granted or taken by
company to/from Companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act,1956: .
(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 requirement of clause
(iii) (b) (c) and clause (iii) (d) of the paragraph 4 of the Order are
(b) The Company has taken unsecured loan from a Company 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 and the year end balance is Rs.2,25,40,313/-.
(c) In our opinion and according to information and explanation given
to us, the rate of interest and other 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, where the interest is payable annually at the discretion of the
company, However company has able to obtain waiver of interest for
current and previous financial year.
4. The Company has not carried on any activities during the year.
Hence in our opinion clause (iv) and (v) of the paragraph 4 of the
Order are not applicable,
5. In our opinion and according to 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 Companies Act, 1956 does not arise.
8. In case of Statutory dues:
(a) According to the records of the Company, the Company is regular in
depositing with appropriate authorities undisputed statutory dues
including provident fund, employees'' state insurance, income-tax,
sales tax, customs duty, and other statutory dues applicable to it.
According to the information and explanations given to us, no
undisputed amounts payable in respect of the aforesaid dues were
outstanding as at 31st March, 2012 for a period of more than six months
from the date they became payable.
(b) According to the information and explanations given to us, there
are no statutory dues outstanding on account of disputes.
9. The accumulated loss of the Company at close of the year is more
than fifty percent of its net worth. The Company has incurred cash
losses during the financial year covered by our audit and in the
immediately preceding financial year.
10. The Company has not borrowed any money by way of loan from
financial Institutions, banks and debenture holders; hence there is no
question of repayments of dues or default on this account.
11. 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.
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.
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.
15. The Company has not taken any term loans during the year.
Therefore, the provision of clause (xvi) of paragraph 4 of the order
are not applicable.
16. According to the information and explanation given to us and on an
overall examination of the Balance Sheet of the Company, the funds
raised on short-term basis have not been used for long-term investment.
17. The Company has not made any preferential allotment of shares to
any party listed in the register maintained under Section 301 of the
Companies Act, 1956.
18. The Company has not issued any secured debentures during the year
covered by our audit.
19. The Company has not raised any money by way of public issue during
20. According to information and explanation given to us, no fraud on
or by the Company has been noticed or reported during the year.
For Chaturvedi and Shah
Firm Registration No. 101720 W
Place : Mumbai Partner
Date : 1st December, 2012 Membership No.103141