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Orissa Sponge Iron Ltd.

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

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Sep 12, 16:00
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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 :
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Auditor's Report

We have audited the attached Balance Sheet of Orissa Sponge Iron & Steel Limited as at March 31, 2010, and the Profit and Loss Account and the Cash Flow Statement 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. We have conducted our audit in accordance with the 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. 1. As required by the Companies (Auditors Report) Order, 2003,(the Order) 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 paragraphs 4 and 5 of the said Order. 2. Further to our comments in the Annexure referred to 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 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 appears from our examination of those books; (c) The Balance Sheet and Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; (d) On the basis of written representations received from the directors of the Company, as on March 31, 2010, and taken on the records by the Board of Directors, we report that none of the director of the Company is disqualified as on March 31, 2010 from being appointed as a director in terms of Section 274(1 )(g) of the Companies Act,1956. 3. We report that, (i) No Provision has been made for diminution in value of long term investments in a listed Company {Bilati (Orissa) Ltd.} amounting to Rs. 142 lacs, (refer schedule 6 B [i]) (ii) According to us, advances recoverable from Nilachal Ispat Nigam Ltd. amounting to Rs. 274 lacs (Rs. 274 lacs) and from Bilati (Orissa) Ltd. amounting to Rs. 1,789 lacs (including advance of Rs. 89 lacs for the year) (Previous year Rs. 1700 lacs) are doubtful of recovery against which provision has not been made. (Refer Schedule No. 14B [5 & 6]). Had the provision been made in respect of (i) and (ii) the net assets of the company would have decreased by Rs. 2205 lacs and the accumulated losses would have increased by the same amount and loss for the year would have increased by Rs. 89 lacs. k. Subject to 3 above, in our opinion and to the best of our information and according to the explanations given to us: a) The Balance Sheet and 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 Act to the extent applicable. b) The said accounts 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. (i) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010. (ii) In the case of the Profit and Loss Account, of the loss for the year ended on that date; and (iii) In the case of Cash Flow Statement, of the cash flows for the year ended on that date. ANNEXURE TO THE AUDITORS REPORT With reference to the Annexure referred to in paragraph 1 of the Auditors Report to the members of Orissa Sponge Iron & Steel Limited (the Company) on the financial statements for the year ended 31 st March, 2010 we report that: 1. (a) The Company has maintained 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 all 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. (c) Fixed assets disposed off during the year were not substantial and therefore do not affect the going concern assumption. 2. (a) The inventory of the Company has been physically verified by the management during the year. In our opinion, the frequency of such physical 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 its 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. According to the information and explanations given to us, the Company has not granted or taken any loans, secured or unsecured, to/from Companies, Firms or other parties listed in the register pursuant to the Section 301 of the Companies Act, 1956. 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. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under the section. (b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs.5 lacs with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time. 6. The Company has not accepted any deposits under the provisions of Section 58(A) and 58(AA) of the Act, and the Rules framed there under. 7. In our opinion the Company has an Internal Audit System commensurate with the size and nature of the business. 8. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 209(1 )(d) of the Companies Art, 1956, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However we have not made a detailed examination of such records. 9. (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Customs duty, Excise duty, Cess and other material statutory dues are generally deposited during the year by the Company with the appropriate authorities. As explained to us, the Company does not have any dues on account of investor education and protection fund. According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Customs duty, Excise duty, Cess and other material statutory dues were in arrears, as at 31 st March, 2010, for a period of more than six months from the date they became payable except the following: Nature of Dues Amount (Rs. In Lacs) Central Sales Tax 1.37 Orissa Sales Tax 0.58 Sales Tax Contractors 0.03 Provident Fund (Contractors) 53.58 (b) According to the information and explanations given to us, there are no dues of Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited with the appropriate authorities on account of dispute other than those mentioned as follows. Name of the statute Nature of dues Amount (Rs. in lacs) Forum where Dispute is pending Income Tax Act, 1961 Tax Demand under appeal 85.22 CIT (Appeal), Bhubaneswar For Assessment Year 2006-2007 Central Sales Tax Act, 1956 Non-collection 2,473.00 Sales Tax Appellate Authorities of declaration forms Orissa Sales Tax Act, 1947 Enhanced Assessment & Penalty 500.63 -do- Central Excise Act, 1944 Disputed Central Excise demand 44.76 Commissioner of Appeals, Central Excise 10. The Company has accumulated losses at the end of the financial year which are less than fifty percent of its net worth. It has incurred cash losses in the current financial year and the year immediately preceding financial year. 11. The Company has defaulted in repayment of dues to its bankers and financial institutions as on 31 st March, 2010 as detailed below: - Bank / Financial Institution Amount of Default Default since Remakrs a) State Bank of India A/c -1 Rs. 2,43,345 (Interest) 31.03.2010 Since paid b) State Bank of India A/c - II Rs. 4,00, 00,000 (Principal) 28.02.2010 Since paid Rs. 66,93,592(Interest) 31.03.2010 Since paid c) Punjab National Bank Rs. 63,22,000 (Principal)01.01.2010 Since paid Rs. 26,97,847 (Interest) 28.02.2010 Since paid d)State Bank of Bikaner & Jaipur Rs. 76,00,000 (Principal)28.02.2010 Since paid Rs. 47,74,674 (Interest) 28.02.2010 Since paid Amount payable to IREDA has been rescheduled subsequent to close of the year. 12. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 13. In our opinion and according to the information and explanations given to us the Company is not a chit fund/nidhi/mutual benefit fund/society. Accordingly, the provisions of clause 4(xiii) of the Order are not applicable to the Company. 14. According to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of paragraph 4(xiv) of the Order 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 or financial institutions. Accordingly the provisions of caluse 4(xv) of the order are not applicable to the Company. 16. According to the information and explanations given to us, no term loans have been taken by the Company during the year. 17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the funds raised during the year on short term basis have not been used for long term investment. 18. According to the information and 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. The Company has not raised any money by issue of shares during the year. 20. According to the information and explanations given to us, the Company has not issued debentures during the year. 21. According to the information and explanations given to us and to the best of our knowledge, no fraud on or by the Company was noticed and reported during the year. Place: Kolkata For L. N. More & Company Date: 10th November, 2010 Chartered Accountants FRN 307042E L N. More Partner Membership No. 011485