1. We have audited the accompanying financial statements of
Electrosteel Steels Limited (the Company), which comprise the Balance
Sheet as at 31 March 2015, the Statement of Profit and Loss, the Cash
Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Financial Statements
2. 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 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 (as amended). 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
3. Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
4. 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.
5. 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 standalone financial
statements are free from material misstatement.
6. 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 controls 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.
7. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion on the
financial statements.
8. 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, of the state of affairs of the Company as
at 31 March 2015, and its loss and its cash flows for the year ended on
that date.
Emphasis of Matters
9. Without qualifying our opinion, we draw attention to Note 40 to the
financial statements, regarding the preparation of the same on a going
concern basis. The Company incurred a net loss of Rs. 62,404.23 lacs
during the year ended March 31,2015 and, as of that date, the Company''s
current liabilities exceeded its current assets by Rs 163,669.48 lacs,
further the Company''s net worth has also been substantially eroded as
at the balance sheet date. However, in view of operationalisation of
the other project facilities together with the increase in release of
the working capital limits and the committed infusion of funds, these
financial statement have been prepared on a going concern basis and no
adjustment has been made to the carrying value of the assets and
liabilities.
Report on Other Legal and Regulatory Requirements
10. As required by the Companies (Auditor''s Report) Order, 2015 (the
Order) issued by the Central Government of India in terms of Section
143(11) of the Act, we give in the Annexure a statement on the matters
specified in paragraphs 3 and 4 of the Order.
11. As required by Section143(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
purpose 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.;
c. the financial statements dealt with by this report are in agreement
with the books of account;
d. in our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014 (as amended);
e. the matter described in paragraph 9 under the Emphasis of Matters,
may not have an adverse effect on the functioning of the Company.
f. on the basis of the written representations received from the
directors as on 31 March 2015 and taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March 2015
from being appointed as a director in terms of Section164(2) of the
Act;
g. with respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. the Company does not have any pending litigations which would
impact its financial position;
ii. the Company, as detailed in Note 39 to the financial statements,
has made provision, as required under the applicable law or accounting
standards, for material foreseeable losses, if any, on long-term
contracts including derivative contracts.
iii. there were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
Annexure to the Independent Auditor''s Report of even date to the
members of Electrosteel Steels Limited, on the financial statements for
the year ended 31st March, 2015
Based on the audit procedures performed for the purpose of reporting a
true and fair view on the financial statements of the Company and
taking into consideration the information and explanations given to us
and the books of account and other records examined by us in the normal
course of audit, we report that
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) As planned, a part of the fixed assets have been physically
verified by the management during the year and no material
discrepancies were noticed on such verification. In our opinion, the
frequency of verification of the fixed assets is reasonable having
regard to the size of the Company and the nature of its assets.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies between physical inventory and book records were
noticed on physical verification.
(iii) The Company has not granted any loan, secured or unsecured to
companies, firms or other parties covered in the register maintained
under Section 189 of the Act. Accordingly, the provisions of clauses
3(iii)(a) and 3(iii)(b) of the Order are not applicable.
(iv) In our opinion, there is an adequate internal control system
commensurate with the size of the Company and the nature of its
business for the purchase of inventory and fixed assets and for the
sale of goods and services. During the course of our audit, no major
weakness has been noticed in the internal control system in respect of
these areas.
(v) The Company has not accepted any deposits within the meaning of
Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits)
Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of
the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
maintenance of cost records under sub-section (1) of Section 148 of the
Act in respect of Company''s products/services and 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
cost records with a view to determine whether they are accurate or
complete. As informed, the cost audit for the year is under progress.
(vii) (a) Undisputed statutory dues including provident fund,
employees'' state insurance, income-tax, sales-tax, wealth tax,
service tax, duty of customs, duty of excise, value added tax, cess and
other material statutory dues, as applicable, have generally been
regularly deposited with the appropriate authorities. Further, no
undisputed amounts payable in respect thereof were outstanding at the
year-end for a period of more than six months from the date they became
payable.
(b) The dues outstanding in respect of income-tax, sales-tax, wealth
tax, service tax, duty of customs, duty of excise, value added tax and
cess on account of any dispute, are as follows:
Name of the statute Nature of Amount Period to
dues (Rs.Lacs) which the
amount
relates
Central Excise Act, Excise Duty 75.97 2009-10
1944
Service Tax under Service Tax 2,215.62 2007-08 &
Finance Act,1994 2008-09
Service Tax under Service Tax 1,510.34 2009-10
Finance Act,1994
Service Tax under Service Tax 317.72 2009-10
Finance Act,1994
Service Tax under Service Tax 1,071.40 2007-08 to
Finance Act,1994 2011-12
Custom Act, 1962 Custom duty 5,974.73 2008-09 to
2011-12
Jharkhand VAT Value Added Tax 101.61 2010-11
Act, 2015
Jharkhand VAT Value Added Tax 273.16 2012-13
Act, 2015
Jharkhand VAT Value Added Tax 138.94 2013-14
Act, 2015
Jharkhand VAT Value Added Tax 9.11 2008-09 to
Act, 2015 2010 11
Name of the statute Forum where dispute
is pending
Central Excise Act, CESTAT
1944
Service Tax under CESTAT
Finance Act,1994
Service Tax under Order Awaited.
Finance Act,1994
Service Tax under Order Awaited.
Finance Act,1994
Service Tax under CESTAT
Finance Act,1994
Custom Act, 1962 Additional Director
General, Directorate of
Revenue Intelligence,
New Delhi
Jharkhand VAT Commissioner
Act, 2015 Commercial taxes
Jharkhand VAT Deputy Commissioner
Act, 2015 of Commercial Taxes
Jharkhand VAT Commissioner Commercial
Act, 2015 taxes
Jharkhand VAT Commissioner
Act, 2015 Commercial taxes
(c) There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company in accordance
with the relevant provisions of the Companies Act, 1956 (1 of 1956) and
rules made thereunder
(viii) In our opinion, the Company''s accumulated losses at the end of
the financial year are not less than fifty percent of its net worth.
The Company has incurred cash losses in the current and the immediately
preceding financial year.
(ix) The Company has defaulted in payment of interest dues to the
following banks and Financial Institutions:
Name of the bank Amount Due date Delay in days
(in crores)
Allahabad Bank 2.60 31-Mar-2015 Not yet paid
Andhra Bank 1.20 31-Mar-2015 Not yet paid
Bank of Baroda 1.50 31-Mar-2015 Not yet paid
Bank of India 1.79 31-Mar-2015 Not yet paid
Bank of Maharashtra 1.15 31-Mar-2015 Not yet paid
Canara Bank 4.67 31-Mar-2015 Not yet paid
Central Bank of India 1.24 31-Mar-2015 Not yet paid
Corporation Bank 1.67 31-Mar-2015 Not yet paid
Dena Bank 1.03 31-Mar-2015 Not yet paid
ICICI Bank Ltd 0.45 31-Mar-2015 Not yet paid
Indian Bank 1.51 31-Mar-2015 Not yet paid
Indian Overseas Bank 3.79 31-Mar-2015 Not yet paid
J&K Bank 0.54 31-Mar-2015 Not yet paid
Oriental Bank of Commerce 3.88 31-Mar-2015 Not yet paid
Punjab & Sind Bank 1.09 31-Mar-2015 Not yet paid
Punjab National Bank 5.22 31-Mar-2015 Not yet paid
State Bank of Hyderabad 4.31 31-Mar-2015 Not yet paid
State Bank of India 18.11 31-Mar-2015 Not yet paid
State Bank of Mysore 2.12 31-Mar-2015 Not yet paid
State Bank of Patiala 3.60 31-Mar-2015 Not yet paid
State Bank of Travancore 2.87 31-Mar-2015 Not yet paid
Syndicate Bank 1.70 31-Mar-2015 Not yet paid
UCO Bank 4.45 31-Mar-2015 Not yet paid
Union Bank of India 2.57 31-Mar-2015 Not yet paid
United Bank of India 2.98 31-Mar-2015 Not yet paid
Vijaya Bank 1.85 31-Mar-2015 Not yet paid
Total 77.89
Name of Financial Amount Due date Delay in days
Institution (in crores)
HUDCO 2.73 31-Mar-2015 Not yet paid
Life Insurance
Corporation of
India 1.57 31-Mar-2015 Not yet paid
IL&FS 0.16 31-Mar-2015 Not yet paid
Total 4.46
(x) The Company has not given any guarantees for loans taken by others
from banks or financial institutions. Accordingly, the provisions of
clause 3(x) of the Order are not applicable.
(xi) In our opinion, the term loans were applied for the purpose for
which the loans were obtained, though surplus funds which were not
required for immediate utilization were temporarily used for the
purpose other than for which the loan was sanctioned.
(xii) No fraud on or by the Company has been noticed or reported during
the period covered by our audit.
For B Chhawchharia & Co.
Chartered Accountants
Firm''s Registration No.: 305123E
S K Chhawchharia
Place : Kolkata Partner
Date : May 11,2015 Membership No.:008482 |
-0.13 (-4.26%)
