| We have audited the accompanying financial statements of Facor Steels
Limited ("the Company"), which comprise the Balance Sheet as at 31st
March, 2015 the Statement of Profit and Loss, 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
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 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 the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating 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.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. 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 thereunder.
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 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 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 control 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. 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.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the financial
statements.
Opinion
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, of the state of affairs of the Company as
at 31st March, 2015 and its loss and its cash flows for the year ended
on that date.
Emphasis of Matter
Without qualifying our opinion, we draw our attention to Note 1 (b) of
the financial statement. The company's operating results has been
materially affected due to various factors and as on 31st March, 2015
the company's accumulated losses has fully eroded the net worth of the
company The appropriateness of the going concern assumption is
dependent on the company's ability to establish consistent profitable
operations as well as raising adequate finance to meet it short term
and long term obligations. Based on the mitigation factors discussed in
the said note, management believes going concern assumption is
appropriate and no adjustment have been made in the financial statement
for the year ended 31st March, 2015.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of Section
143 (11) of the Act, we give in the Annexure, a statement on the
matters specified in the paragraph 3 and 4 of the Order, to the extent
applicable.
2. As required by Section 143 (3) of the Act, we report that:
(a) We have 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 statements 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 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act.
(f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to be best of our information and
according to the explanations given to us
i) the Company has disclosed the impact of pending litigations on its
financial position in financial statements - refer note 42 (b) to the
financial statements;
ii) the Company did not have any long term contracts including the
derivative contracts for which there were any material foreseeable
losses;
iii) there was no amount required to be transferred to the Investor
Education and Protection Fund by the Company.
ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT
The Annexure referred to in our report to the members of Facor Steels
Limited ('the Company'), for the year ended 31st March, 2015.
We report that :
i) a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of
fixed assets.
b) All the fixed assets have been physically verified by the Management
at reasonable intervals and no material discrepancies were noticed on
such verification.
ii) a) Physical verification of inventory has been conducted at
reasonable intervals by the Management.
b) In our opinion, the procedures of physical verification of inventory
followed by the Management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed by the Management on physical
verification.
iii) 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 ('the Act').
iv) 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 the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services and during the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.
v) The Company has not accepted any deposits from the public.
vi) We have broadly reviewed the cost records maintained by the company
pursuant to Company's (Cost Records and Audit) Rules 2014 read with
Company's (Cost Records and Audit) Amendment Rules, 2014 prescribed by
the Central Government under Section 148 of the Companies Act, 2013 and
are of the opinion that prima facie, the prescribed cost records have
been maintained. We have, however, not made a detailed examination of
the cost records with a view to determine whether they are accurate or
complete.
vii) (a) According to the information and explanations given to us, the
Company is regular in depositing the undisputed statutory dues including
provident fund, employees' state insurance, income-tax, sales-tax,
wealth tax, service tax, duty of customs, duty of excise, value added
tax, cess and any other statutory dues with the appropriate authorities.
(b) On the basis of our examination of the documents and records, there
are no dues of Sales Tax, Income Tax, Wealth Tax, Service Tax, Excise
Duty, Value Added Tax, Customs Duty and Cess which have not been
deposited on account of any dispute except the following:
Nature of Rs./ Forum where the Period to
dues Lacs dispute is pending which the amount
related (various Years
covering
the period)
Excise Duty 30.67 Hon'ble High court Mumbai. Jan' 96 to
Feb' 2000
Excise Duty 185.41 To be filed before Hon'ble Sep' 01 to
High court Mumbai. Nov' 03
(c) According to the information and explanations given to us no amount
was required to be transferred to the investor education and protection
fund in accordance with the relevant provisions of the Companies Act,
1956 (1 of 1956) and rules there).
viii) The accumulated losses at the end of the financial year are more
than 100% of its net worth and company has incurred cash losses during
the current and also in the immediate preceding financial year.
ix) In our opinion and according to the information and explanations
given to us, and keeping in view the Master Restructuring Agreement
executed on 30th March,2013 there is no default in repayment of the
dues of Financial Institutions, Bankers or Debenture holders except in
case of cash credit facility availed from Consortium Banks. The amount
of Rs.3664.30 Lakhs shown under short term borrowings have been
classified by the Bankers as Non Performing Assets during the year
under review.
x) The Company has not given any guarantee for loans taken by others
from bank or financial institution, the terms and conditions whereof
are prejudicial to the interest of the Company.
xi) The Company has not taken any term loans during the year.
Accordingly the provisions of clause 3 (xi) of the order are not
applicable to the Company.
xii) According to the information and explanations given to us, no
material fraud on or by the Company has been noticed or reported during
the year.
For SALVE & Co.
Chartered Accountants
(Firm's Registration No.109003W)
C.A. S.D. PARANJPE
Place : Nagpur Partner
Date : 29th May, 2015 (Membership No. 41472) |