| We have audited the accompanying financial statements of Anil Special
Steel Industries Limited ("the Company"), which comprise the Balance
Sheet as at March 31, 2014, and the Statement of Profit and Loss and
Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
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 Principles generally accepted in India including
Accounting Standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 ("the Act"). This responsibility includes the
design, implementation and maintenance of internal control 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 conducted cur audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. 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 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 control 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. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, 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.
Basis for Qualified Opinion
a) The Company is accounting the bonus & leave pay on cash basis. The
accounting policy not being in consonance with accrual method of
accounting. Accordingly bonus accrued for the year Rs.1,59,038/- and
leave pay accrued up to 31st March'2014 Rs.49,25,602/- as per actuarial
valuation, remain un-provided for. (Refer Note No. 1(J) and 1(1)).
b) Nonpayment/provision of contribution to Gratuity fund with Life
Insurance Corporation of India (up to 31st March,2014)
Rs.2,66,,21,346/-. (Refer Note No. 1(1)).
c) Non ascertainment of diminution in value of unquoted investment of
Rs.34,70,000 and provision required to be made. (Refer Note No.12.1).
d) The addition to Deferred Tax Asset for the year Rs. 37,67,017/- and
Cumulative Rs. 1,17,78,996/- up to 31st March'2014. (Refer Note No.
13.2)
e) The company has changed its depreciation method [ Refer Note No.1
(b).(iii) & (iv) ] during the financial year
2013-14.
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 for Qualified Opinion paragraph, 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 profit 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.
Emphasis of Matter
We draw attention to Note no. 5.1 that company is relocating its
industrial undertaking from Kanakpura, Jaipur and has entered into sale
agreement for sale of land & building and has taken advance amount of
Rs. 1,84,73,920/-. Our opinion is not qualified in respect of this
matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of sub-
section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the
Order.
2. 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 purpose 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, 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 for
Qualified Opinion paragraph, in our opinion, the Balance Sheet,
Statement of Profit and Loss and Cash Flow Statement comply with the
accounting standards referred to in sub-section (3C) of section 211 of
the Act;
e. On the basis of written representations received from the directors
as on March 31,2014, and taken on record by the Board of Directors,
none of the directors are disqualified as on March 31,2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Act.
Annexure to the Auditors' Report
(Referred to in paragraph (3) of our report of even date)
Referred to in paragraph under the heading of "Report on other Legal &
Regulatory Requirements" of our report of even date to the Members of
ANIL SPECIAL STEEL INDUSTRIES LIMITED:
(i) a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets
b) A major portion of the assets has been physically verified by the
Management in accordance with a phased programme of verification
adopted by the Company. In our opinion, the frequency of verification
is reasonable having regard to the size of the Company and the nature
of its assets. To the best of our knowledge, no material discrepancies
have been noticed on such verification.
c) There was substantial disposal of fixed assets during the year
(refer. Note No.11.3 ) The company is relocating its running industrial
undertaking (Unit-1 mfg. Fiat Rolled Products division) from Kanakpura,
Jaipur and entered into sale agreement and has received an advance of
Rs.1,84,73,920/- for sale of land & building.
(ii) a) The inventory of finished goods and work in progress and raw
materials at works have been physically verified during the year by the Management at reasonable intervals. In respect of stores and spare
parts and stocks at branches, the Company has a programme of verifica
-tion of stocks at the end of year.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) In our opinion and according to the information and explanations
given to us, the Company is maintaining proper records of its
inventories. The discrepancies noticed on verification between the
physical stocks and the book records were not material and have been
properly dealt with in the Books of Accounts.
(iii) (a) In our opinion and according to information and explanation
given to us, the Company has not granted any loan secured or unsecured
to the Companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956 during the
year, hence, clause (b),(c),(d) of the order is not applicable to the
company.
(e) In our opinion and according to information and explanations given
to us, the Company has taken unsecured loans from one party covered in
the register maintained under section 301 of the Companies Act, 1956.
The maximum amount outstanding during the year was Rs.3,15,49,768/- and
year ended balance is Rs. nil.
(f) The terms on which such loan is taken, are not prima facie
prejudicial to the interest of the Company as these are interest free.
(g) The repayment of principal is being done as per stipulation.
(iv) 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 for purchases of inventory, fixed assets and sale of goods and
services. During the course of our audit, we have not observed major
weakness in internal control system.
(v) a) To the best of our knowledge and belief and according to the
information and explanations given to us, we are of the opinion that
the contract or arrangements that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so
entered, b) In our opinion and according to the information and
explanation given to us, there were no transactions made in pursuance
of contracts or arrangements entered in the registers maintained under
Section 301 and exceeding the value of five lakh rupees in respect of
any party during the year.
(vi) As per explanation given to us, the company has availed temporary
interest free unsecured loans from the related parties, bodies
corporate and others to maintain margins required by the bankers/
Financial Institutions. In our opinion the company is yet to comply
with the provisions of section 58 A of the Companies Act, 1956 and
Rules made thereunder.
(vii) In our opinion, the Company is having internal audit system;
however same need to be strengthened so as to be commensurate with the
size and nature of its business.
(viii) As per information given to us, the company has maintained cost
records, as prescribed under section 209(1 )(d) of the Companies Act,
1956, as prescribed by the Central Government. Flowever we have not
made detailed examination of such records.
(ix) a) The Company is generally regular in depositing undisputed
statutory dues including Provident Fund,
Investor Education and Protection Fund, Employee State Insurance,
Income tax, Sales tax, Wealth tax, Service tax, Custom duty and other
statutory dues with the appropriate authorities to the extent
applicable, except the amount towards Provident Fund of Rs. 38,58,731/-
which is outstanding for more than 6 months as at the end of financial
year.
b) According to the records of the Company, there are no dues of Income
Tax, Wealth Tax, Custom Duty, Excise Duty, Sales Tax and Service Tax
which have not been deposited on account of any dispute, other than the
following.
Name of the Nature of Amount Forum where dues
Statute thedispute is pending
The Central Sales tax & penalty 1985-86 6,13,340/- Pending with
Sales Tax Act, Tax Board
1956
The Central Sales tax & penalty 1986-87 4,38,845/- Pending with
Sales Tax Act, Tax Board
1956
The Central Export Benefits claim 12,21,097/- Pending with
Excise Act, 2005-06 CESTAT, Delhi
1944
The Central Duty demand on insurance 89,600/- Pending with
Excise Act, claim of Gear Box 2001-02 CESTAT, Delhi
1944
The Central Duty on stock 2012-13 30,08,388/- Pending with
Excise Act, Excise Deptt.
1944 Excise
However, the company has paid Rs.10,52,185/- against the demand of
Central Sales Tax and Rs. 30,08,388/-
against excise duty on stock till 31st March 2014.
(x) The Company has no accumulated losses as on 31st March 2014. The
Company has not incurred any cash losses during the financial year and
in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
Banks as on 31st March 2014.
(xii) 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. Therefore,
the provisions of clause 4(xii) of the Companies (Auditor's Report)
Order, 2003 are not applicable to the Company.
(xiii) In our opinion, the Company is not a chit fund or a nidhi mutual
benefit fund/ society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditor's Report) Order, 2003 are not applicable to the
Company.
(xiv) The Company has maintained proper records of the transactions and
contracts in respect of dealing in mutual funds and timely entries have
been made there in. All the investments have been held by the company
in its own name. As informed to us the Company is not dealing/trading
in shares, debentures and other investments.
(xv) In our opinion, the Company has not given guarantees for loans
taken by others.
(xvi) As per explanation given to us the Company has not raised new
term loans during the year.
(xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, considering
the effect of current maturities of long term borrowings we report that
no funds raised on short-term basis have been used for long-term
assets.
(xviii) According to the information and explanations given to us, the
company has not made any preferential allotment of shares during the
year.
(xix) The company has not issued any debentures during the year.
(xx) During the year covered by our audit report, the Company has not
raised any money by public issues.
(xxi) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
has been noticed or reported during the course of our audit.
For Bansal R, Kumar & Associates
Chartered Accountants
FRN-08186N
Sd/-
(Sanjay Agrawal)
Partner
Membership No. 089796
Place: Jaipur
Date: 14th June, 2014
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