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Bihar Sponge Iron Ltd.

BSE: 500058 | NSE: BIHARSPONG | Series: NA | ISIN: INE819C01011 | SECTOR: Steel - Sponge Iron

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Nov 26, 16:00
1.56 0.00 (0.00%)
Volume
AVERAGE VOLUME
5-Day
12,649
10-Day
22,994
30-Day
17,889
360
  • Prev. Close

    1.56

  • Open Price

    1.56

  • Bid Price (Qty.)

    1.56 (4000)

  • Offer Price (Qty.)

    0.00 (0)

NSE Live

Dec 27, 11:22
1.65 0.15 (10.00%)
Volume
No Data Available
31,610
  • Prev. Close

    1.50

  • Open Price

    -

  • Bid Price (Qty.)

    - (0)

  • Offer Price (Qty.)

    - (0)

Bihar Sponge Iron is not listed on NSE

Annual Report

For Year :
2015 2014 2013 2012 2011 2010 2009 2008 2007

Auditor's Report

Report on the Financial Statements We have audited the accompanying financial statements of BIHAR SPONGE IRON LIMITED (the Company), which comprise the Balance Sheet as at 31st 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 Financial Statements 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 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. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 Our responsibility is to express an opinion on these financial statements based on our audit. 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. 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 financial statements are free from material misstatement. 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 control 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 control system over the 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the financial statements. Basis for Qualified Opinion The management has prepared the financial statements on the basis of going concern perhaps based on the facts that the Modified Draft Rehabilitation scheme has been submitted by the company on 03.12.2012 and the same is under the consideration BIFR. In our opinion the going concern concept is likely to be appropriate only if the modified rehabilitation scheme referred to above is approved by the BIFR with or without modifications. In the mean while following liabilities may or may not materialised depending upon the final outcome of the dispute, have not been provided:- i. Non recognition of liability on account of currency fluctuations on foreign currency loan and interest thereon (as required under Accounting Standard - 11, Revised) amounting to Rs. 2,32,381 thousand as provided in the BIFR Scheme dt. 29.07.2004 and also confirmed by AAIFR/ Single Bench of Jharkhand High Court, Ranchi since the company against the order of Single Bench of High Court, has filed Letters Patent Appellate Jurisdiction (LPA) before the Divisional Bench of High Court of Jharkhand, Ranchi (refer other note no. 3(II) appearing in Annexure-1) ii. Non recognition penalty of Rs. 21,528 thousands recovered by South Eastern Coal Fields Ltd. On account of short lifting of coal quantity in terms of Fuel Supply Agreement since the matter has been disputed by the Company under writ petition filed before the Hon''ble High Court of Chhattisgarh (refer other note no 5 of Annexure I) iii. No provision has been made in the books of accounts in respect of the undernoted items of expense in view of Shutdown of the Plant & Suspension of operations since 10th August, 2013 as well as other reasons contented by the company:- a. Interest on unsecured loan taken from Promoters and other parties from 10.08.2013 to 31.03.2015( amount unascertained) (refer note 10 (a) of Annexure I). b. Interest on Soft Loan taken from the Government of Jharkhand under the Industrial Rehabilitation Scheme 2003 amounting to Rs. 81,331 thousands from 10.08.2013 to 31.03.2015 which is subject to representation for waiver(refer note 10(b) of Annexure I) and approval thereof by the lender. c. Salaries, Wages, Allowances, Contribution to PF including interest on overdue amount as well as employee benefit expenses w.e.f. 10.08.2013 to 31.03.2015, (amount unascertained) (refer note 10(c) of Annexure I) Taking into consideration non provision of likely liabilities mentioned paragraph I, II and III(b) above. a) Loss for the year would have been more by Rs. 3,35,240 thousand as compared to the disclosed loss of Rs. 73,614 thousand. b) Accumulated losses would have been Rs.26,55,564 thousand as compared to disclosed losses of Rs. 23,20,324 thousand. c) The above losses is however subject to ascertainment of liabilities as mentioned in Para iii (a) and iii(c). Qualified Opinion In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis of Qualified Opinion paragraph above, 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: a. in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015; b. in the case of the Statement of Profit and Loss, of the loss 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. Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor''s Report) Order, 2015 (the Order) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable to the company. 2. As required by section 143(3) of the Act, we report that: a. We have sought & obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; b. Except for the effects of the matter described in the Basis for Qualified Opinion Paragraph above, 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 Balance Sheet, the Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account: d. Except for the effects of the matter described in the Basis of Qualified Opinion paragraph above, 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. e. The matter described in the basis for Qualified Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the company. f. On the basis of written representations received from the Directors as on 31st March, 2015 taken on record by the Board of Directors, we report that none of directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of section 164(2) of the Act. g. The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above. h. 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 has disclosed the possible impact of pending litigations on its financial position in its financial statements -Refer other notes III of Annexure I (1) (i) to (ix) to the financial statements; ii. The company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses. iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the company. Annexure referred to in paragraph 1 under the heading Report on Other Legal and Regulatory Requirements of Independent Auditors'' Report of even date on the financial statements for the year ended March 31, 2015 i) Fixed Assets a) The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets. b) The Company has a programme of verifying all of the fixed assets over a period of three years, which in our opinion is reasonable, having regard to the size of the Company and nature of assets. Since the plant is under shut down from the previous year, hence no physical verification of Fixed Asset has been carried out by the management during the year as such we are unable to comment on the discrepancies, if any,between the physical balance and book balance and their adjustment in the books of accounts at the year end. ii) Inventories a) The stock of finished goods, stores, spare parts and raw materials have not been physically verified by the management at reasonable intervals during the year since the plant has been under shut down and operations suspended w.e.f. 10.08.2013. b) The company has the procedures of physical verification of inventories followed by the management which are reasonable and adequate in relation to the size of the Company and nature of its business, however no physical verification has been carried out during the year ended 31.03.2015 in view of the fact stated at (ii) a) above. c) The company has maintained proper records of inventory showing full details regarding quantity of receipts, issues, balances and dates of transactions. Since no physical verification of inventories were carried out during the year hence the question of discrepancies, if any, observed and their adjustment in the books of account does not arise. iii) Transactions with parties u/s 189 of the Companies Act, 2013 The company has not granted any loans secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Act as such Para (a) & (b) of clause 3 (iii) are not applicable. iv) Internal Control In our opinion and according to the information and explanations given to us, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets, and for sale of goods and services. However, there is a need of strengthening internal control with respect to obtaining of confirmation of balances from major parties. There are no continuing failures to correct matters in respect of lack of adequacy of internal controls brought to the notice. v) Deposits The Company has not accepted any deposits from the public which are covered under the directives issued by the Reserve Bank of India and the provisions of section 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder. vi) Cost Records The maintenance of Cost Records has been specified by the Central Government under sub section (1) of Section 148 of the Companies Act, 2013. Since there have been no operations during the Financial year 2014-15, no records have been made & maintained by the company. vii) Statutory Dues a) According to the books and records, examined by us and information and explanations given to us, the company has not been regular in depositing the undisputed Statutory dues with the appropriate authorities including Provident Fund, Income Tax(TDS &TCS), Sales Tax, Service Tax, Excise duty, Value Added Tax, Cess & other applicable statutory dues during the year except that, the amount of excise duty of earlier year has been deposited by the company during the financial year along with interest. The arrears on account of such statutory dues as at the end of the financial year 31st March 2015 for a period of more than six month from the date they become payable are Service Tax: Rs 2,348 thousand, Provident fund: Rs 5,123 thousand: Family Pension Scheme: Rs. 703 thousand, Income Tax (TDS/TCS)Rs. 4054 thousand, Electricity Duty: 320 thousand and Cess Rs. 100 thousand. b) The details of dues of sales tax, custom duty, excise duty, trade tax and cess etc. which have not been deposited on account of dispute are given hereunder: Name of the Statute Forum where Dispute pending 1. The Customs Act, 1962 CESTAT, Kolkata 2. JVAT Act, 2005 Jt. Commissioner of Commercial Taxes (Appeals) Jamshedpur, who has recommended case on 08.10.2013 to DCIT to verify and allow credit for taxes, if any, paid earlier. 3. The Central Sales Tax Act, 1956 Jt. Commissioner of Commercial Taxes (Appeals). 4. JVAT Act, 2005 Disputed demand for JVAT for the F.Y. 2010-11 u/s 70(5)(b) under appeal before the Jt. Comm. of Commercial Taxes (Appeals), Jsr. However stay has been granted on 20.01.2012 (Amount paid on appeal Rs. 5.88 lacs) Demand raised by DCCT, Jsr for tax due and/penality imposed or interst payable under JVAT Act, 2005 of the F.Y. 2010-11 under dispute before JCCT, Jsr (Amount paid on appeal Rs. 15 lacs on 19.10.2012) 5. Finance Act, 1994 The Commissioner of Appeals Central Excise & Service Tax, Ranchi 6. Income Tax Act, 1961 The Commissioner of Income Tax (Appeals), JSR Name of the Statute Nature of dues Period of Amount Dispute Rs. Thousand 1. The Customs Act, 1962 Custom Duty & Demurrage 1981-92 10,427 Charges and interest on imported Stores & spare parts 1994-95 5,032 2. JVAT Act, 2005 Tax on non-submission of JVAT Forms 2006-07 2,397 3. The Central Sales Tax Act, 1956 Tax on non-submission of ''C'' Forms 2006-07 311 4. JVAT Act, 2005 Tax on JVAT 2010-11 5,879 Tax on JVAT 2010-11 24,786 5. Finance Act, 1994 Recovery of Irregular Cenvat Credit, Cess 2009-10 123 availed and Penalty thereon 6. Income Tax Act, 1961 Short deduction/ 2004-05 to 8,334 collection of Tax at 2008-09 Source with interest and penalty The above does not include the amount of assessed tax & penalty demand for JVAT of Rs. 22,117 thousand, CST Rs. 73,645 thousand and Electricity Duty of Rs.2,281 thousand for which the company is contemplating to file appeals before the appropriate authorities (refer note on contingent liabilities (Annexure I/ para III on the Basis of Qualified Opinion of our report ). c) The Company is not required to transfer any amount to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act 2013 and rules made thereunder. viii) The accumulated losses of the company at the end of the financial year March 31,2015 substantially exceeds its net worth and the company was declared as Sick industrial undertaking in 1996. Further the Company has incurred cash losses during the current financial year and in the immediately preceding financial year ix) The company has not defaulted in payment of dues to financial institutions/Banks. There has been no debenture in the company. x) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year. xi) The term loans taken by the Company have been applied for the purpose for which they were obtained, however there has been no term loans obtained during the year under audit. xii) Based upon the audit procedures performed and on the basis of information and explanations provided by the management, we report that no fraud on or by the Company has been noticed or reported during the year under audit. For Thakur, VaidyanathAiyar& Co. Chartered Accountants [FRNo. 000038N] M.P. Thakur Place : New Delhi (Partner) Dated :12th May, 2015 Membership No. 052473