We have audited the attached Balance Sheet of KANISHK STEEL INDUSTRIES
LIMITED (the Company) as at 31st March 2012 and also the Statement of
Profit & Loss and the Cash Flow Statement for the year ended on that
date annexed thereto. 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.
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 are free of material misstatement. 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
As required by the Companies (Auditor''s Report) Order, 2003, (as
amended) issued by the Govt. of India in terms of sub-section (4A) of
Sec.227 of the Companies Act, 1956, we report on the matters specified
in paragraphs 4 and 5 of the said order to the extent applicable.
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative
details and situation of Fixed Assets.
(b) The Fixed Assets have been physically verified by the management at
reasonable intervals and no material discrepancies have been noticed on
(c ) The Company has not disposed off substantial part of the Fixed
Assets during the year which could affect the going concern status of
(ii) (a) Inventories have been physically verified during the year by
the management at reasonable
(b) In our opinion and according to the information and explanation
given to us, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and nature of its business.
(c ) The Company is maintaining proper records of inventory and the
discrepancies noticed on physical verification between the physical
stock and book records which were not material having regard to the
size of the company and nature of its business have been properly dealt
with in the books of account.
(iii) As per the information and explanation given to us and as per the
records produced to us, the company has not granted any unsecured loans
to company covered in the register maintained under section 301 of the
Companies Act, 1956.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems 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, we have not observed any
major weaknesses in the internal controls system.
(v) (a) We are of the opinion that particulars of contracts or
arrangements referred to in Section
301 of the Companies Act, 1956 have been entered into the register
maintained under the said section;
(b) In our opinion and according to the information and explanations
given to us, transactions made in pursuance of such contracts or
arrangements have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
(vi) The Company has not accepted any deposit from the public.
(vii) In our opinion, the company''s in-house internal audit system is
commensurate with the size and nature of its business.
The Central Government under Section 209(1)(d) of the Companies Act,
1956 has not prescribed the maintenance of cost records in respect of
the activities of the company.
(viii) (a) The Company is regular in depositing undisputed statutory
dues including Provident Fund,
Investor Education and Protection Fund, Employees State Insurance,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise
Duty, Cess and other statutory dues with the appropriate authorities,
wherever applicable and no dues are pending for a period of more than
six months from the date they become payable.
(b) According to the information and explanations given to us and the
records of the Company, there were no dues of sales tax, income tax,
customs duty, wealth tax, service tax, excise duty and cess which have
not been deposited on account of any dispute except as follows: (also
refer Note: 28(iii)).
Amount in Forum where dispute
Statute Name Nature of dues Rs. is pending
Law Dispute relating
to deemed 234,094/- Commissioner of
2268/95 Credit Central Excise
25.07.1995 (Appeals) Chennai.
Excise Law Dispute relating
to refixation of 3,566,000
Plus Honb''le High Court
of erstwhile OP equal amount of Madras.
Steels Limited penalty
Law Dispute relating
to differential 5,238,000/- Honb''le High Court
(SCN No. 2/06
dt duty on depot sales. Madras.
Law Dispute relating
to reification of 900,000/- Plus Hon''ble High Court
Annual capacity equal amount of Madras
(ix) The Company has no accumulated losses. The Company has also not
incurred cash losses during this financial year and the immediately
preceding financial year.
(x) The company has not defaulted in repayment of loans availed from
Banks. The company has no borrowings from financial institution and has
not issued debentures.
(xi) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
(xii) The Company is not a chit fund, nidhi, mutual benefit fund or
society and therefore the requirements pertaining to such class of
companies is not applicable.
(xiii) The Company is not dealing or trading in shares, securities,
debentures and other invest- ments. The Investments in shares has been
held by the company in its own name.
(xiv) In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken
by others from Bank or Financial Institu- tions the terms and
conditions whereof are prejudicial to the interest of the Company.
(xv) On the basis of review of utilization of funds on an overall
basis, in our opinion, the term loans taken by the company during the
year were applied for the purposes for which the loans were obtained.
(xvi) According to the information and explanations given to us and on
an overall examination of the Balance Sheet and Cash Flow Statement of
the Company, we are of the opinion that there are no funds raised on
short-term basis which have been used for long term investment by the
(xvii) The Company has not made any preferential allotment of shares
during the year.
(xviii) The Company has not issued any debentures during the year.
(xix) The company has not raised any money by way of public issue
during the year.
(xx) Based on the audit procedures performed and the information and
explanations given to
us, we report that no fraud on or by the company has been noticed or
reported during the course of our audit.
Further to our comments above, we report that:
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 those
c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement 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 the written representations received from the
directors as on 31st March 2012, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March 2012 from being appointed as a Director in terms of clause
(g) of sub section (1) of Section 274 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 and
subject to notes thereon, give the information required by the
Companies Act, 1956 in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
(i) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012 and
(ii) In the case of the Statement of Profit and Loss, of the Profit of
the company for the year ended on that date.
(iii) In the case of the Cash Flow Statement, of the Cash flows of the
Company for the year ended on that date.
For CHATURVEDI & COMPANY,
(FRN 302137E )
Date: 28th May, 2012