1) We have audited the Balance Sheet of M/s Stelco Strips Limited as at
31st March, 2012 and Profit and Loss Account and also the Cash Flow
Statement for the year ended on that date annexed thereto. These
financial statements are the responsibility of Company''s management.
Our responsibility is to express an opinion on these financial
statements based on our audit.
2) We have 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 the 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 issued
by the Department of Company Affairs Government of India in terms of
Section 227 (4A) of the Companies Act,1956,and on the basis of that
checks as we considered appropriate and according to information and
explanations given to us, we annexure hereto 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 in paragraph 3
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 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 examinations of
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
as referred to in this report are in agreement with the books of
account produced before us;
(d) In our opinion, the Balance Sheet, Profit and Loss Account & Cash
Flow Statement of the Company 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 representations received from the directors
and taken on record by the Board of Directors, we report that none of
the directors is disqualified as on 31.03.2012 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
explanations given to us ,the said accounts read together with Notes to
Accounts 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;
(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 Profit & Loss Account, of the Loss for the year
ended on that date;
(iii)In the case of Cash Flow Statement, of the Cash flows for the year
ended on that date.
(Referred to in paragraph 3 of our report of even date)
1.(a) The Company has maintained proper records showing full
particulars including quantitative details and situation of Fixed
(b) The Company has a phased programme of physical verification of its
fixed assets which in our opinion is reasonable having regard to the
size of the Company and the nature of its assets. No material
discrepancies were noticed on such verification.
(c) In our opinion and according to the information and explanation
given to us, no substantial part of fixed assets has been disposed off
by the Company during the year, and therefore it does not effect the
going concern assumption.
2.(a) The inventories have been physically verified during the year by
the management. In our opinion, the frequency of verification is
(b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) On the basis of our examination of the records of inventory, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of stocks as compared to
the book records were not material.
3. The Company has not granted or taken any loans, secured or
unsecured to and from Companies, firms or other parties as covered in
the register maintained under Section 301 of the Companies Act,1956.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal procedures commensurate with
the size of the company and the nature of its business for the purchase
of the inventory, fixed assets and for sale goods. Further on the basis
of our examination of the books & records of the Company & according to
information & explanations given to us, we have neither come across nor
have been informed of any continuing failure to correct major weakness
in the aforesaid internal control procedures.
5. We are informed that there are no transactions made in pursuance of
contracts or arrangements entered in the register maintained under
section 301 of the Companies Act,1956 & aggregating during the year to
Rs. 500000/- or more in respect of any party.
6. According the records of the company & the information &
explanations given to us, the Company has not accepted deposits within
the meaning of the provisions of Section 58-A and 58AA of the Companies
Act,1956 and the rules made hereunder.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. The Central Govt. has prescribed for the maintenance of cost
records under Section 209 (1) (d) of the Companies Act, 1956 for the
products manufactured by the company to which The Companies (Cost
Accounting Record), Rules 2011 are applicable. The Company maintains
the same, we have however not made a detailed examination of records
with a view to determine whether they are accurate or complete.
9.(a)According to the records of the Company and the information and
explanations given to us, in our opinion , the Company is generally
regular in depositing with appropriate authorities undisputed statutory
dues including sales Tax , wealth Tax, custom Duty, excise duty , cess
and other statutory dues applicable to it except the following payment
of dues /demands outstanding for a period of more than 6(six) months
from the date they became payable :
Name of Statute /Authority Nature of dues Amount (Rs)
The Employees Provident Fund Provident Fund 13,99,133/-
& Misc. Provisions Act ,1952 dues/contributions
Employees State Insurance Employees state 1,54,362/-
Act,1948 Insurance dues/contributions
Punjab Labour Welfare
Act ,1948 Welfare fund 4,155/-
(b) According to the records of the Company and the information and
explanations given to us, the details of disputed statutory dues that
have not been deposited on account of matters pending before the
appellate authorities in respect of income tax ,excise tax, service tax
are as follows:
Nature of dues/name of Disputed Amount Forum where dispute
the statute (in Rs.) is pending
Income Tax Act ,1961 2,81,10,200/- Income Tax
Central Excise Act , 1944 2,65,867/- Deputy Commissioner
Central Excise Act , 1944 35,75,264/- Central Excise &
Service Tax Appellant
Central Excise Act , 1944 2,03,175/- Commissioner (Appeals)
10. The Company has accumulated losses as at 31st March, 2012
amounting to Rs.4540.19 Lacs i.e., more than its net worth and has
incurred cash losses amounting to Rs.259.72 Lacs during the financial
year ended on that date and also incurred cash losses in the previous
11. According to the records of the Company and the information and
explanations given by the management, the Company has defaulted in
repayment of dues to a financial institution, banks (State Bank of
Patiala, The Saraswat Cooperative Bank Ltd and IDBI Bank ) as at the
Balance Sheet date.
12. According to information & explanations given to us, the Company
has not granted any loans and advances on the basis of security by way
of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit
fund/nidhi/mutual benefit fund/societies are not applicable to the
14. According to the records & the information & explanations given to
us, the Company is not a dealer or trader in shares, securities,
debentures, and other investments.
15. According to the information & explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
16. According to the records of the Company & the information &
explanations given to us, no term loans/Working Capital Term Loans were
raised during the year.
17. According to information and explanations given to us and as per
the books and records of the Company, as on the date of balance sheet,
the funds raised by the Company on short term basis have not been
applied for long term investments.
18. According to the records & the information & explanations given to
us, the Company has not made any preferential allotment of shares to
parties and Companies covered in the register maintained under section
301 of the Companies Act, 1956.
19. According to records of the Company & the information &
explanations given to us, no debentures have been issued by the
20. The company has not raised any money by public issues during the
21. During the course of our examination of the books and records of
the company carried out in accordance with the generally accepted
auditing practices in India and according to the information and
explanations given to us., we have neither come across any instance of
fraud on or by the company noticed or reported during the year, nor
have we been informed of such case by the management.
For M.P. Goyal & Co.
Place: Ludhiana (Rajnish Goyal,F.C.A)
Date : 05.09.2012 Partner