Kirloskar Ferrous Industries
BSE: 500245 | NSE: KIRLOSFERR | ISIN: INE884B01025 | Steel - Pig Iron
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| Auditor's Report | Year End : Mar '09 |
1. We have audited the attached Balance Sheet of KIRLOSKAR FERROUS
INDUSTRIES LIMITED (the Company) as at 31st March, 2009, the Profit
and Loss Account and also the Cash Flow Statement of the Company 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.
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 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
our opinion.
3. 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 enclose in the Annexure a
statement on the matters specified in paragraph 4 and 5 of the said
Order.
4. Furtherto ourcomments in the Annexure referred to in paragraph 3
above, we report that:
(i) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of
ouraudit;
(ii) 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 such
books;
(iii) The Balance Sheet, the Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the Books of
Account;
(iv) In our opinion, the Balance Sheet, Profit and Loss Account 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;
(v) On the basis of the written representations received from the
Directors as on 31st March, 2009, and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st March, 2009 from being appointed as a Director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956 on the
said date;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the Accounts, read together with the
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 India:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2009;
(b) In the case of the Profit and Loss Account of the profit for the
year ended on that date; and
(c) In the case of the Cash Flow Statement, of the Cash Flows for the
year ended on that date.
ANNEXURE TO THE AUDITORSREPORT
STATEMENT REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT OF EVEN
DATE TO THE MEMBERS OF KIRLOSKAR FERROUS INDUSTRIES LIMITED ON THE
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 st MARCH, 2009
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As informed to us, the fixed assets have been physically verified
by the Management at reasonable intervals. The discrepancies noticed on
such verification were not material and have been properly dealt with
in the Books of Account.
(c) According to the information and explanation given to us, the
Company has not disposed off substantial part of fixed assets during
the year.
(ii) (a) The inventory was physically verified during the year by the
Management. In our opinion, the frequency of verification is
reasonable.
(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. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
(iii) The Company has neither granted, nor taken any loans, secured or
unsecured, to or from companies, firms or other parties covered in the
register maintained as per Section 301 of the Companies Act, 1956.
Accordingly, paragraphs 4(iii)(a),(b),(c),(d),(e),(f) & (g) of the
Order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there were adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and for the sale of goods and
services. During the course of audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.
(v) (a) In our opinion and according to the information and
explanations given to us, there are no transactions that need to be
entered in the register maintained under Section 301 of the Companies
Act, 1956.
(b) As there are no transactions that need to be entered in to the
register maintained under Section 301 of the Act, paragraph 4(v)(b)of
the order is not applicable.
(vi) The Company has not accepted deposits from public and hence the
provisions of Clause vi are not applicable.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the Company
pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 209 (1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of records with a view to
determine whether they are accurate or complete.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, income tax, sales tax, wealth
tax, service tax, custom duty excise duty, cess and other material
statutory dues applicable to it. As informed to us, Employees State
insurance Act is not applicable to the Company.
(b) According to information and explanation given to us, no undisputed
amounts payable in respect of statutory dues were in arrears, as at 31
st March, 2009 for a period of more than six months from the date they
became payable,except the following
Name of the statute Nature of the dues Amount(Rs.)
Government of Karnataka
(Electricity Board) Interest on delayed payment 707,970
According to information and explanation given to us, there are amounts
of excise duty and saies tax, which have not been deposited on account
of dispute as listed below:
Name of the
statute Nature of the dues Amount(Rs.) Forum where dispute is
pending
Central Excise
Act, 1944 Interest on refund 341,496 Assistant Commissioner
of Central Excise
Central Excise
Act, 1944 Duty on pattern
development charges 342,068 Commissioner of Central
Excise
Central Excise
Act, 1944 Cenvat Credit
utilised for
payment of Service
tax 7,585,734 Commissioner of Central
Excise
Central Excise
Act, 1944 Penalty on excise
duty 100,000 CESTAT, Bangalore
Central Excise
Act, 1944 Interest /Penalty 3,127,237 CESTAT, Mumbai
Maharashtra
Sales Tax Act Interest on tax
dues 1,558,043 Sales Tax Appellate
Tribunal
Central Excise
Act, 1944 Cenvat Credit
availed 424,984 Assistant Commissioner,
Central Excise
Central Excise
Act, 1944 Interest on Cenvat
Credit reversal 27,319 Assistant Commissioner,
Central Excise
Central Excise
Act, 1944 Cenvat Credit
availed 5,584,499 Additional Commissioner
of Central Excise
Karnataka Vat
Act, 2003 Interest on refund 211,311 Joint Commissioner of
Commercial Taxes,
Davangere
The Karnataka
Sales Tax Act,
1957 Levy of Sales Tax 1,851,250 Joint Commissioner of
Commercial Taxes,
Davangere
Income Tax
Act, 1961 Minimum Alternate
Tax 20,491,056 Additional Commissioner
of Income Tax, Pune -
disallowed.Appeal filed
in ITAT
Income Tax
Act, 1961 Minimum Alternate
Tax 29,553,560 Commissioner of Income
Tax (A), Pune
The Bombay
Provincial
Muncipal
Corporation
Act, 1949 Octroi 9,425,295 Commissioner of Solapur
Municipal Corporation
(x) The Company does not have accumulated losses as at the date of
Balance Sheet. The Company has not incurred cash losses during the
financial year and in the immediately preceding financial year.
(xi) In our opinion and according to information and explanations given
to us, the Company has not defaulted in repayment of dues to banks.
Repayment to financial institutions / debentureholders is not
applicable as the Company has not borrowed from financial institutions
/ issued debentures.
(xii) According to information and explanation given to us, the Company
has not granted loans and advances on the basis of security byway of
pledge of shares, debentures and other securities.
(xiii) The Company is not a chit fund or a nidhi/mutual benefit
fund/society.
(xiv) According to information and explanation given to us, the Company
is not dealing in or trading in shares, securities, debentures.
However, the Company had made investments in mutual funds, for which
proper records have been maintained of the transactions and contracts
and timely entries have been made therein.
(xv) As informed to us, the Company has not given guarantees for loans
taken by others from banks or financial institutions.
(xvi) In our opinion, the term loans have been applied forthe purpose
for which they were raised.
(xvii) According to information and explanation given to us, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) According to information and explanation given to us, the
Company has not made any preferential allotment of any shares to
parties and companies covered under Section 301 of the Companies Act,
1956.
(xix) Since the Company has not issued any debentures during the year,
para 4(xix) of the order regarding creation of security is not
applicable.
(xx) According to information and explanation given to us, the Company
has not made any public issue to raise money.
(xxi) According to information and explanation given to us, no fraud on
or by the Company has been noticed or reported during the course of our
audit.
For M/s P. G. BHAGWAT
Chartered Accountants
S. B. Pagad
Partner
Pune : 9th June, 2009 Membership No.: 206124 |
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