1. We have audited the attached Balance Sheet of M/s INDIA STEEL WORKS
LIMITED (Formerly known as ISIBARS LIMITED), as at 31st March, 2012 and
also the statement of Profit & Loss Account for the year ended on that
date annexed thereto and the cash flow statement for the year ended on
that date. 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.
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 misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosure 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
3. As required by the Companies [ Auditors Report ) Order, 2003 as
amended by companies (Auditors'''' Report) (Amendment) Order 2004,
(together the ''Order''), issued by the Central Government of India in
terms of sub-section (4A) of section 227 of the Companies Act, 1956
(''the Act''), and on the basis of such checks of the books and records
as we considered necessary and appropriate and according to the
information and explanations given to us during the course of the
audit, we enclose in the Annexure, 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 above :-
a. We have obtained all the information and explanations which are to
the best of our knowledge and belief were necessary for the purposes of
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
c. The company''s Balance Sheet, Statement of Profit and Loss and Cash
flow statement dealt with by this report are in agreement with the
books of accounts.
d. In our opinion, the Balance Sheet, Statement of Profit & 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 declarations made by the Directors as on 31st March
2012, none of the directors are, as at 31st March 2012 prima facie
disqualified from being appointed as a Director under clause (g) of
sub-section (I) 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 account, subject to points
mentioned in above, read together significant accounting policies and
other notes there on, give the information required by the Companies
Act, 1956, in the manner so required and give a true and fair view.
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 & Loss, of the LOSS 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.
ANNEXURE TO THE AUDITORS'' REPORT
Referred to in paragraph 3 of Auditors'' Report of even date to the
members of INDIA STEEL WORKS LTD on the financial statements for the
year ended 31st March 2012.
1 a. The Company has maintained records of fixed assets upto 31st
March 2001, however quantitative details in respect of assets added
afterwards are under compilation.
b. The Company has a regular 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. In accordance with
this programme, certain fixed assets were physically verified by
management during the year.
c. During the year, in our opinion, substantial part of the fixed
assets has not been disposed off by the Company.
2. a. The inventories (excluding stock with third parties and
materials in transit) have been physically verified by the management
during the year, at reasonable intervals;
b. The procedures of physical verification of the inventories followed
by the management are reasonable and adequate in relation to the size
of the Company and nature of its business.
c. The Company has maintained proper records of inventories and
discrepancies noticed on physical verification of inventories as
compared to book records were not material and have been properly dealt
with in the books of accounts.
3. a. The Company has granted unsecured loans to parties covered
under section 301 of the Act. The loans have been advanced to 7 parties
amounting to Rs. 91.72 Lacs.
b. The Loans advanced by the Company are interest free loans and as
such are prejudicial to the interest of the Company;
c. There is no prescribed stipulation for repayment of principal and
d. The Company has taken interest free loans from 13 parties covered
in the register maintained under Section 301 of the Companies Act,
1956. The total amount of such loans received and outstanding as of
31st March 2012 was Rs. 4160.57 Lacs-.
e. The Company has taken interest free loans as such the terms and
conditions on which these loans are taken are not prejudicial to the
interest of the Company.
f. There is no predetermined schedule of repayment of principal;
4. There are adequate internal control procedures commensurate with
the size of the Company and the nature of its business with regard to
purchase of inventories, fixed assets and for the sale of goods.
5. a. On the basis of the audit procedures performed by us and
according to the information and explanations given to us on
our enquiries on this behalf and the records produced to us for our
verification, the transactions required to be entered into the register
in pursuance of section 301 of the Companies Act, 1956 have been so
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of
contracts/arrangements entered in the Register maintained under Section
301 of the Companies Act 1956 & exceeding the value of Rs 5 Lakhs in
respect of some of the items purchased and Labour charges paid are of
special nature and suitable alternative sources do not exist for
obtaining comparable quotations. There is adequate internal control
system commensurate with the size of the Company and the nature of its
business for the purchase of inventories and fixed assets and for the
sale of goods and services and we have not observed any continuing
failure to correct major weaknesses in such internal control system.
6. The Company has not accepted any deposit from the public and
consequently the provision of Section 58A and 58AA of the Companies
Act, 1956 and the Companies [Acceptance of Deposits] Rules, 1975 are
7. In our opinion the company has an internal audit system
commensurate with the size and nature of its business
8. We have broadly reviewed the Books of Accounts 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 are of opinion that prima facie the prescribed accounts
and records have been made and maintained. We have, however, not made a
detailed examination of the records with a view to determine whether
they are accurate.
9 a. The Company has been generally regular in depositing undisputed
dues of Provident fund, Employees State Insurance, Income Tax,
Profession Tax, except Property Tax of Rs. 63.45 Lacs, Cess of Rs. 7.75
Lacs & VAT payable of Rs. 76.07 Lacs outstanding for more than six
months, as at 31st March 2012.
b. Details of dues of Sales Tax, Excise Duty & Service Tax which have
not been deposited as on 31st March 2012 on account of disputes are
Nature of Amount in Period for Forum where dispute
Dues Rs. Lacs which dispute dispute is pending
Sales Tax 11.24 FY 2002-03 Asstt Comm of Sales Tax
Excise Duty 33.53 FY 2005-06 ESTAT
Excise Duty 5.94 FY 2007-08 Comm of Central Excise
Excise Duty 4.30 FY 2004-05 Comm of Central Excise
Excise Duty 40.98 FY 2003-04 CEGAT
Excise Duty 38.00 FY 2005-06 Comm of Central Excise
Service Tax 1.91 FY 2008-09 Comm of Central Excise
10. The accumulated losses of the Company exceeded fifty percent of
its net worth at the end of the financial year. The Company has not
incurred cash loss during the financial year under review and in the
year immediately preceding the financial year.
11. In our opinion and according to the Information and explanations
given to us, the company had delayed in repayment of dues to financial
institutions during the financial year, but as on 31st March 2012 there
is no overdue.
12. The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures or other securities.
13. The provisions of any Special Statute applicable to Chit Fund,
Nidhi or Mutual Benefit Fund / Societies are not applicable to the
14. The Company is not dealing or trading in shares, securities,
debentures or other investments and hence the requirements of Para
4(xiv) are not applicable to the Company.
15. According to the information and explanations given to us. the
Company has not given any guarantee for loans taken by others from
banks and financial institutions.
16. In our opinion and according to the information and explanations
given to us, the Company has not raised any term loan during the year.
17. 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 report that no funds raised on short-term basis have
been used for long-term investment.
18. The Company has not made preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Companies Act, 1956 during the year.
19. The Company has not raised any monies by way of public issue
during the year.
20. On the basis of our examination and according to the information
and explanations given to us, no fraud, on or by the company, has been
noticed or reported during the year.
For and on behalf of -
THANAWALA & COMPANY
FirmREg. No 110948W
( V.K. Thanawala )
Membership No. 1563
Place : Mumbai