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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 :
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 4, the Statement of Profit and Loss and 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 2. The Company''s Management is responsible for 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 Standards referred to in Section 211 (3C) of the Companies Act, 1956 (the Act) and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatements, whether due to fraud or error. AUDITORS'' RESPONSIBILITY 3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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 material misstatements. 4. 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 the internal controls relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements. 5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. EMPHASIS OF MATTER 6. 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? 4,129.25 lacs during the year ended 31st March, 2014 and the accumulated losses as of that date ? 27,886.70 lacs, the Company''s current liabilities exceeded its current assets by ? 23,608.83 lacs, the Company defaulted in repayment of term loan and cash credit facilities. These conditions indicate the existence of material uncertainty that may cause significant doubt about the Company to continue as going concern. (b) The Company has considered deferred tax assets of ? 11,054.28 lacs, including? 2,785.19 lacs for the current year, on the assumption that the Company will be able to earn sufficient profit in future years to recoup the carry forward of losses, when the raw materials i.e. iron ore will be available from captive lease mines in future years. We cannot comment on the certainty. OPINION 7. 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. (a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014. (b) In the case of the Statement of Profit and Loss, of the Loss of the Company for the year ended on that date and (c) In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS 8. As required by the Companies (Auditor''s Report) Order 2003 as amended by the Companies (Auditors Report), (Amendment) 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 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 4 and 5 of the order. 9. As required by Section 227(3) of the Act, 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 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 Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211 (3C) of the Act, e) On the basis of the written representations received from the directors as on March 31, 201 4, taken on the record by the Board of Directors, none of the directors is disqualified as on March 31, 201 4 from being appointed as a director in terms of Section 274(1 )(g)of the Act. ANNEXURE TO THE AUDITORS'' REPORT Referred to in paragraph 8 of the Auditors'' Report of even date to the members of Orissa Sponge Iron & Steel Limited (the Company) on the financial statements for the year ended 31 st March, 2014. 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 covered in the register maintained 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 X 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 Act, 1956, 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. 9. (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, no undisputed dues payable in respect of Provident Fund, Investor Education and Protection Fund, Employees State Insurance, IncomeTax, Wealth Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues were outstanding at the year end, for a period of more than six months from the date they become payable. (b) According to the information and explanations given to us, details of dues of Income Tax, Sales Tax, Service tax, Customs duty, Excise Duty and Cess which have not been deposited as at 31 st March, 201 4 on account of any dispute are given below: Name of the Nature of dues Amount Staute In Lacs Income Tax Tax Demand under appeal 3.27 Act 1961 for Assessment Year 2006-07 Tax Demand under appeal 1.00 for Assessment Year 2009-10 Central Sales Non-collection of declaration forms 2,495.87 Tax Act 1956 and enhanced assessment & penalty Orissa Sales Enhanced Assessment & Penalty 634.79 TAX Act 1947 Central Excise Disputed Central Excise demand 155.33 Act 1944 Name of the Staute Forum Where Dispute is Pending Income Tax Acy 1961 Petition u/s 154 Before Assessing Authority Appeal u/s 246 before Appellate Authority Central Sales Act 1956 Sales Tax Appelate Authorities Orissa Sales Tax Act 1947 Sales Tax Appelate Authorities Central Excise Act 1944 Commissiioner of Appeals, Central Excise 10. The Company has accumulated losses at the end of the financial year which are more 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 31st March, 2014 as detailed below : - Bank / Financia Amount of Default Default has Insituation Rs in lacs Started since Term Loan a) State Bank of India 3,635.00 Principal January 2011 2,417.60 Interest April 2011 b) State Bank of Bikaner& Jaipur 1,323.00 Principal March 2011 846.17 Interest April 2011 c) Punjab National Bank 760.30 Principal October 2011 939.20 Interest August 2011 d) Bankof India - WCTL 12.00 Principal April 2013 23.46 Interest November 2012 e) Indian Renewable Energy DevelopmentAgencyLtd.(IREDA) 1,968.32 Principal June2011 2,086.03 Interest June 2011 Cash Credit (excluding interest not charged by Bank) f) State Bank of India 6,714.14 Balance April 2011 outstanding on 31.03.2014 g) State Bank of Bikaner& Jaipur 855.91 Balance July 2011 Outstanding on 31.03.2014 h) Bank of India 552.85 Balance March 2013 Outstanding on 31.03.2014 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 given guarantee for loans taken by associated companies from banks or financial institutions, terms and conditions whereof are not prejudicial to the interest of the Company. 16. In our opinion and according to the information and explanation given to us, the term loan taken by the Company during the year have been applied for the purpose for which it was raised. 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 during the year. 19. The Company has received X 2,000 lakhs during the year as advance towards issuance of Redeemable Preference Share. 20. According to the information and explanations given to us, the Company has not issued debentures during the year. 21. During the course of our examination of the books & 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 Partner Membership No. 011485 Place: Bhubaneswar Dated: 30th May, 2014