| We have audited the accompanying standalone financial statements of
BHUWALKA STEEL INDUSTRIES 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 STANDALONE FINANCIALSTATEMENTS
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 standalone 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 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 standalone
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, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the 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. We
believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
OPINION
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone 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 31 March, 2015, its Loss and its cash flows for the year ended on
that date.
EMPHASIS OF MATTER
We draw attention to:
1. Note 23 Sl No.7 (i) Other disclosure in respect of Finance cost not
recognized in the books by the company for Rs.42,24,11,280/- in view of
representation by management that they have disputed on account of
unilateral withdrawal of CDR Package by the Banks.
Our opinion is not modified in respect of these matters.
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 in terms of Section 143(11) of
the Act, we give in the Annexure a statement on the matters specified
in paragraphs 3 and 4 of the Order.
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 standalone 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 31 March, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act.
(e) 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 the best of our information and
according to the explanations given to us:
a. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 23 serial
number 01 (iii) and serial number 07 to the financial statements;
b. The Company did not have any long-term contracts including derivative
contracts for which there were any material foreseeable losses;
c. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory
Requirements' section of our report of even date)
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) Some of the fixed assets were physically verified during the year
by the Management in accordance with a programme of verification, which
in our opinion, provides for physical verification of all the fixed
assets at reasonable intervals. According to the information and
explanations given to us, no material discrepancies were noticed on
such verification.
(ii) In respect of its inventories:
(a) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals. Based on
information, explanation and necessary documents pertaining to
inventory like Excise Inventory registers, Physical verification report
conducted by management and other supporting documents provided to us,
we report that the management has conducted physical verification of
Inventory at reasonable intervals.
(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 were 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 has maintained proper records of its
inventories and no material discrepancies were noticed 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.
(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
major weakness in such internal control system.
(v) According to the information and explanations given to us, the
Company has not accepted any deposit during the year.
(vi) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Records and Audit) Rules, 2014,
as amended and prescribed by the Central Government under sub- section
(1) of Section 148 of the Companies Act, 2013, and are of the opinion
that, prima facie, the prescribed cost records have been made and
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) According to the information and explanations given to us, in
respect of statutory dues:
a) The Company has generally been regular in depositing undisputed
statutory dues, except as mentioned in table below including Provident
Fund, Employees' State Insurance, Income-tax, Sales Tax, Service Tax,
Wealth Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other
material statutory dues applicable to it with the appropriate
authorities.
Sl.No Particulars Amount (Rs.)
1 EPF 4138183
2 ESI 1216929
3 TDS
a) TDS CONTRACT 1049217
b) TDS ON SALARY 368090
c) TDS ON RENT 541374
d) TDS ON PROF. & CONST. 1651896
e) TDS ON INTEREST 3194553
f) TDS ON Commission or Brokarage 15395
g) TCS ON Scrap 44243
4 SERVICE TAX Payable on GTA and Others 3001582
5 VAT 8930825
6 Profession Tax 358500
Total Rs. 24510787
(a) There were undisputed amounts payable in respect of Provident Fund,
Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service
Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other
material statutory dues in arrears as at 31 March 2015 for a period of
more than six months.
Nature of dues Period Amount Due date
pertaining to Rs.
TDS Apr-13 28415 5/7/2013
TDS May-13 58797 6/7/2013
TDS Jun-13 89936 7/7/2013
TDS Jul-13 86793 8/7/2013
TDS Aug-13 60224 9/7/2013
TDS Sep-13 71231 10/7/2013
TDS Oct-13 72516 11/7/2013
TDS Nov-13 144073 12/7/2013
TDS Dec-13 1082579 1/7/2014
TDS Jan-14 159679 2/7/2014
TDS Feb-14 77649 3/7/2014
TDS Mar-14 634670 4/7/2014
TDS Apr-14 101399 5/7/2014
TDS May-14 117374 6/7/2014
TDS Jun-14 175676 7/7/2014
TDS Jul-14 151057 8/7/2014
TDS Aug-14 230919 9/7/2014
Service Tax Mar-14 625158 4/5/2014
Service Tax Apr-14 6251 5/5/2014
Service Tax May-14 130049 6/5/2014
Service Tax Jun-14 150798 7/5/2014
Service Tax Jul-14 134817 8/5/2014
Service Tax Aug-14 161851 9/5/2014
EPF Sep-13 129291 10/15/2013
EPF Oct-13 129926 11/15/2013
EPF Nov-13 130368 12/15/2013
EPF Dec-13 331074 1/15/2014
EPF Jan-14 260505 2/15/2014
EPF Feb-14 258877 3/15/2014
EPF Mar-14 244953 4/15/2014
EPF Apr-14 228728 5/15/2014
EPF May-14 232330 6/15/2014
EPF Jun-14 111297 7/15/2014
EPF Jul-14 210863 8/15/2014
EPF Aug-14 204566 9/15/2014
ESI Oct-13 80407 11/20/2013
ESI Nov-13 82339 12/20/2013
ESI Dec-13 75253 1/20/2014
ESI Jan-14 78675 2/20/2014
ESI Feb-14 81000 3/20/2014
ESI Mar-14 80000 4/20/2014
ESI Apr-14 80530 5/20/2014
ESI May-14 82117 6/20/2014
ESI Jun-14 83118 7/20/2014
ESI Jul-14 84036 8/20/2014
ESI Aug-14 84036 9/20/2014
Profession Tax Mar-14 120475 4/20/2014
Profession Tax Apr-14 23425 5/20/2014
Profession Tax May-14 22400 6/20/2014
Profession Tax Jun-14 20300 7/20/2014
Profession Tax Jul-14 18575 8/20/2014
Profession Tax Aug-14 17575 9/20/2014
KVAT Mar-14 148551 5/20/2014
Total Rs. 8287501
Nature of dues Date of payment Nos. of days
delayed
TDS Pending 693
TDS Pending 662
TDS Pending 632
TDS Pending 601
TDS Pending 570
TDS Pending 540
TDS Pending 509
TDS Pending 479
TDS Pending 448
TDS Pending 417
TDS Pending 389
TDS Pending 358
TDS Pending 328
TDS Pending 297
TDS Pending 267
TDS Pending 236
TDS Pending 205
Service Tax Pending 360
Service Tax Pending 330
Service Tax Pending 299
Service Tax Pending 269
Service Tax Pending 238
Service Tax Pending 207
EPF Pending 532
EPF Pending 501
EPF Pending 471
EPF Pending 440
EPF Pending 409
EPF Pending 381
EPF Pending 350
EPF Pending 320
EPF Pending 289
EPF Pending 259
EPF Pending 228
EPF Pending 197
ESI Pending 496
ESI Pending 466
ESI Pending 435
ESI Pending 404
ESI Pending 376
ESI Pending 345
ESI Pending 315
ESI Pending 284
ESI Pending 254
ESI Pending 223
ESI Pending 192
Profession Tax Pending 345
Profession Tax Pending 315
Profession Tax Pending 284
Profession Tax Pending 254
Profession Tax Pending 223
Profession Tax Pending 192
KVAT Pending 315
(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty, Value Added Tax and Cess which have not been
deposited as on 31 March 2015 on account of disputes are given below :-
Sr. Name of the Statute Nature of Dues Forum where
No. dispute is
pending
1 Central Excise Act, 1944 Excise Duty and Commissioner of
service tax Central Excise
(Appeals)
CESTAT, High
Court,
Supreme Court
2 Income Tax Act, 1961 Income Tax Commissioner of
Income Tax
(Appeals), ITAT
Sr. Name of the Statute Amount
No. (Rs.in lakhs)
1 Central Excise Act, 1944 885.12
2 Income Tax Act, 1961 116.70
(d) The Company has been regular in transferring amounts to the
Investor Education and Protection Fund in accordance with the relevant
provisions of the Companies Act, 1956 (1 of 1956) and Rules made
thereunder within time.
(viii) The Company have accumulated losses at the end of the financial
year is Rs 1004.29Lakhs and the Company has incurred cash losses of Rs
76.69Lakhs during the financial year covered by our audit and in the
immediately preceding financial year for Rs. 2221.26Lacs.
Due to losses the Net Worth of the company has eroded by more than 50%
(without giving effect to the observation in Note 23 (7)(i)). The
company has already filed Form C with BIFR.
(ix) In our opinion and according to the information and explanations
given to us, the Company has defaulted in the repayment of dues to
financial institutions, banks as mentioned in Note 23 (7)(ii).
(x) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company for loans taken by others from banks and financial institutions
are not, prima facie, prejudicial to the interests of the Company.
(xi) In our opinion and according to the information and explanations
given to us, the term loans have been applied by the Company during the
year for the purposes for which they were obtained, other than
temporary deployment pending application.
(xii) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
for ASR Associates
Chartered Accountants
Place : Bangalore (CA A. S. Rafiq)
Date : 11th July, 2015 Proprietor
Membership No.204646
FRN No. 8877S
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