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Orissa Sponge Iron Ltd.

BSE: 504864 | NSE: | Series: NA | ISIN: INE228D01013 | SECTOR: Steel - Sponge Iron

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Orissa Sponge Iron is not traded on BSE in the last 30 days

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Orissa Sponge Iron is not listed on NSE

Annual Report

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

Auditor's Report

1. We have audited the accompanying. financial statements of Orissa Sponge Iron & Steel Limited (the Company) which comprise the Balance Sheet as at March 31, 201 5, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of the sign financial year ending exploratory information MANAGEMENTS Responsibility FOR THE FINANCIAL STATEMENTS 2. 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 and presentation of these financial statements on a going concern basis 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 include maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies and making judgment and estimates that are reasonable and prudent; and design, Implementation and maintenance of adequate Internal financial controls, that operate 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. AUDITORS'' RESPONSIBILITY 3. Our responsibility is to express an opinion on these financial statements based on our audit. 4. 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 there under. 5. 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 the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from materials misstatements. G. 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 controls 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 on adequate Internal financial control system over financial reporting and 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. 7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide the basis for our audit opinion on the financial statements. OPINION 8. In our opinion and to the best of our information and according to the explanations given to us, 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, if the state of affairs aft the Company as at 31st March, 201 5 and its loss and its cash flows for the year ended on the date. EMPHASIS OF MATTER 9. Without qualifying our opinion we draw attention on the following: (a) The Company has suspended the production in June 2012; incurred a net loss of Rs, 8,013.13 lacs during the year ended 31st March, 201S and the accumulated losses as of that date amount to Rs, 3S.072.70 lacs, the Company''s net worth has become negative: the current liabilities exceeded Its current assets by Rs 33,734.02 lacs; the company defaulted in repayment of term loan and cash credit facilities and SBF, B01 and PNB have taken possession of all the assets at the plant under Section 13(4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI); These conditions indicate the existence of material uncertainly that may cause significant doubt about the company to continue as a going concern. (b) Referring to Note No. 12(1} of Notes on Accounts to the financial Statement wherein the company has considered deferred tax assets of Rs, 12730.82 lacs including Rs. 1676.54 lacs for the current year on the assumption that the Company will be able to earn sufficient profit in future In future years to recoup the carry forward of losses, when, Iron ore will be available from captive mines. We cannot comment on the certainty of the future profits. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS 10. As required by the Companies (Auditor''s Report) Order 201 S issued by the Central Government of India in terms of sub-section 143(11) of the Act (here in under referred to as the order), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraph 3 and 4 of the order. 11. As required by Section 143(3) of the Act, we report that; a) We how sought and obtained all the Information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit. b) 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 the Cash Flow Statement dealt with by this Report are in agreement with the books of account d) In our opinion, the aforesaid financial statement comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. e) On the basis of the written representations received from the directors as on 31 March, 201S, taken on the record by the Board of Directors, none of the directors is disqualified as on 31 March, 2015 from being appointed as a director In terms of Section 16M2) of the Act. f) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 201 4, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us ; (I) The Company has disclosed the impact, If any, of pending litigations as on 31st March 201S on Its financial positions in Its financial statements as referred to in Mote 30(A) of the Motes on Accounts to the Financial Statements. (H) The Company did not have any long term contracts including derivative contract for which there were any material foreseeable losses. (iil) There were no amounts, which were required to be transferred during the year to the Investor Education and Protection Fund by the Company. ANNEXURE TO THE AUDITORS'' REPORT Referred to in paragraph 10 of the Independent Auditors'' Report of even date to the members of Orissa Sponge Iron & Steel Limited (the Company'') on the financial statements as of and for the year ended 31st March, 2015. We report that: 1. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of its fixed assets. (b) The Company has a regular programme of physical verification of its fixed assets, by which a II fixed assets are verified in a phased manner over a period of three years. In our opinion this periodicity of physical verification Is reasonable having regard to the size of the Company and the nature of its assets. Accordingly, certain fixed assets have been physically verified by the management during the current year and no material discrepancies were noticed upon such verification. 2. (a) The inventory of the Company has been physically verified by the management during the year. In our opinion the frequency of such verification is reasonable. (b) The procedures of physical verification of inventories followed by management are reasonable and adequate in relation to the size of the Company and the nature of the business. (c) On the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory. The discrepancies noted on physical verification between the physical stocks and the book records were not material. 3. 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 Companies Act 2013. Therefore the provisions of Clause (3) (iii) (a) and (b) of the said Order are not applicable to the Company. 4. In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and nature of its business with regard to purchases of inventory and fixed assets and with regard to sale of goods and services. 5. The Company has not accepted any deposits from the Public within the meaning of Section 73 to 76 of the Act or any other relevant provisions of the Act and Rules framed there under. 6. 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 148 (1) of the Companies Act, 2013 and are of the opinion that prima facie, the prescribed accounts and records have been maintained. However we have not made a detailed examination of such records. 7. (a) According to the information and explanations given to us and except Central Sales Tax, Orissa Sales Tax and Entry Tax liability totaling Rs, 30.91 lakhs, and Provident Fund dues to the extent of Rs, 199.54 lacs no undisputed dues payable in respect of Provident Fund, Employees State Insurance, Income Tax, Wealth Tax. Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax and other material statutory dues were outstanding at the year end. for a period of more than six months from the date they became payable. (b) There are no disputed dues which have remained unpaid as on 311 March. 2015 on account of Income Tax, value added tax, duty of exudes of customs, sales tax. wealth tax, service tax. cess except as follows: Name Due Amount (Rs, in lacs) Period to which the amount relates Forum where Dispute is pending Income Tax 3.27 2006-07 Petition u/s 154 before Assessing Authority Income Tax 1.00 2009-10 Appeal u /s. 246 before Commissioner of Income Tax (Appeals), Bhubaneswar Central Excise 96.08 2005-06 to 2010-11 Commissioner of Appeals Central Excis Control Excise 59.25 2004-05 to 2007-06 Additional Commissioner Central Excise Qri5sa Sales Tax & VAT 817.44 1985-86 to 2006-07 Various Authorities Central Excise Tax 2495,87 1985-86 to 2006-07 Various Authorities (c) Based on the information and explanation obtained, the company has no liability or requirement to transfer any amount to the Investor Education and Protection Fund in accordance with the relevant provisions of the Act and the Rules framed there under. 3. The Company has accumulated loss at the end of the financial year which has eroded the entire net worth. It has incurred cash loss in the current financial year and the year immediately preceding the current financial year. 9. The Company has defaulted in repayment of dues to Its bankers and financial institutions as on 31st March, 2015 as detailed below: - Term Loan from Banks Details Rs. in lakhs Default has Rs. in Lakhs Name of Bonk Amount of Amount of Default Started since Default as on 31.03.2015 as on 31.03.2014 State Bank of India (5BT) Principal 3635.00 January-11 3635.00 Interest 3380.31 April-11 2417.60 Punjab National Bank (PNB) Principal 1672.77 October-11 760.30 Interest 1138.51 Aggust-11 939.20 Bank of India (BOI)-WCTL Principal 94.45 April-13 12.00 Interest 47.73 November-12 23.46 Term Loan from Other Parties: Indian Renewable Energy Principal 2989.67 June-11 1968.32 Development Agency Interest 3231.17 June-11 2036.03 Limited (IREDA) Edelweiss Asset Recons truction Principal 1323.00 March-11 1323.00 Company Limited (EARC) Interes 1425.05 April-11 846.17 Cash Credit from Banks : State Bank of India 6814.82 April 2011 6714.13 Bank of India 552.85 March 2013 552.85 Cash Credit from Other Parties Edelweiss Asset Recons truction 855.91 July-2011 Term Loan from Banks Default Has Name of Bank Started since State Bank January-11 of India (5BT) Punjab April-11 National Bank (PNB) Bank of October -11 India (BOI)-WCTL Term Loan from Other Parties: Indian August-11 Renewable Energy Development Agency April-13 Limited (IREDA) Edelweiss March-11 Asset Recons truction Company April-11 Limited (EARC) Cash Credit from Banks : State Bank April-2011 of India Bank of India March-2013 Cash Credit from Other Parties Edelweiss July -2011 Asset Recons truction Company Limited SBI, BOl, PUB and EARC have is sued notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 for recall of their outstanding dues. 10. According to the information and explanations given to us, the Company has given guarantee for loans taken by an associate company from banks or financial institutions, terms and conditions whereof are not prejudicial to the interest of the Company. 11. In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which it was raised. 12. During the course of our examination of the books of records of the Company, carried out in accordance with the generally accepted auditing practice In India, and according to the information and explanations given to us, we have neither come across any Instance of material fraud on or by the Company, noticed or reported during the year nor have we been informed of any such case by the management For L N. More & Company Chartered Accountants FRN 307042E L N. More Place: Bhubaneswar Partner Dated: 29th August, 2015 Membership No. 011485