UTTAM GALVA STEELS LIMITED
ANNUAL REPORT 2011-2012
AUDITORS` REPORT
To,
The Shareholders of
Uttam Galva Steels Limited,
Mumbai.
1. We have audited the attached Balance Sheet of UTTAM GALVA STEELS LIMITED
as at 31st March, 2012 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 Company`s Management. Our
responsibility is to express an opinion on these financial statements based
on our audit.
2. We have conducted our audit in accordance with 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.
3. 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.
4. On the basis of written representations received from the directors, as
on 31st March, 2012, and taken on record by the Board of Directors, We
report that none of the directors is disqualified as on 31st March, 2012
from being appointed as a director in terms of clause (g) of sub-section
(1) of Section 274 of the Companies Act,1956;
5. Further to our comments in the Annexure referred to in paragraph 3 & 4
above, we report that:
i) 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;
ii) 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;
iii) The Balance Sheet and the Profit and Loss Account and cash flow
statement dealt with by this report are in agreement with the books of
account;
iv) In our opinion, the Balance Sheet and the Profit and Loss Account and
cash flow statement dealt with by this report comply with the applicable
accounting standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956;
v) In our opinion and to the best of our information and according to the
explanations given to us, the said accounts read together with the
significant accounting policies and 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:
a) In the case of the Balance Sheet, of the state of affairs of the Company
as at 31st March, 2012;
b) In the case of the Profit and Loss Account, of the profit for the year
ended on that date.
c) In the case of the cash flow statement, of the cash flows for the year
ended on that date.
For Prakkash Muni & Associates
Chartered Accountants
Firm Registration No: 111792W
Prakkash R. Muni
Partner
Membership No.: 30544
Place: Mumbai
Date : 9th May, 2012
ANNEXURE TO THE AUDITORS` REPORT
(Referred to in paragraph 3 of our report of even date)
1. In respect of its Fixed Assets:
a) The Company has maintained proper records showing full particulars
including quantitative details and situation of its fixed assets; site
wise/ plant wise. With consideration to significant additions from time to
time such records are being updated periodically.
b) According to the information and explanations given to us, the Company
is formulating / upgrading a programme of verification by which all the
assets of the Company shall be verified in a phased manner, which in our
opinion, is reasonable having regard to the size of the Company and nature
of its assets. According to the information and explanation given to us no
material discrepancies were noticed on such verification. The company is
yet to formulate a verification programme on assets such as furniture,
computers etc.
c) During the year the Company has not disposed of any part of the plant
and machinery, disposal of fixed assets does not constitute a substantial
part of the Company`s fixed assets.
2. In respect of its inventories:
a) The inventory has been physically verified during the year by the
management. In our opinion, the frequency of verification is reasonable.
b) In our opinion and according to the information and explanations given
to us, the procedures of physical verification and inventories followed by
the 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 noticed on verification between physical stocks and book
records were not material and the difference found between physical and
book records are adjusted appropriately.
3. In respect of the loans, secured or unsecured, granted or taken by the
Company to / from companies, firms or other parties covered in the Register
maintained under Section 301 of the Companies Act, 1956:
(a) The Company has given loans to a wholly owned subsidiary of the
Company. In respect of the said loans, the maximum amount outstanding at
any time during the year is Rs. 26.74 crore and the year-end balance is
Rs. 26.74 crore.
(b) In our opinion and according to the information and explanations given
to us, the rate of interest, where applicable and other terms and
conditions, are not prima facie prejudicial to the interest of the Company.
(c) The principal amounts are repayable on demand and there is no repayment
schedule. The interest, where applicable, is payable on demand.
(d) In respect of the said loans, the same are repayable on demand and
therefore the question of overdue amounts does not arise. In respect of
interest, where applicable, there are no overdue amounts.
(e) The Company has not taken any loan during the year from companies,
firms or other parties covered in the Register maintained under Section 301
of the Companies Act, 1956. Consequently, the requirements of Clauses (iii)
(f) and (iii) (g) of paragraph 4 of the Order are not applicable.
4. In our opinion and according to the information and explanations given
to us, the Company`s internal control systems commensurate with the size of
the Company and the nature of its business with regard to purchases of
inventories and fixed assets and with regard to the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weakness in internal control system.
5. In respect of the contracts or arrangements referred to in Section 301
of the Companies Act, 1956:
a) In our opinion and according to the information and explanations given
to us, the transactions made in pursuance of contracts or arrangements,
that need to be entered in 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 explanations given
to us, the transactions made in pursuance of Contracts / arrangements
entered in Register maintained under section 301 Companies Act, 1956 and
exceeding Rs. 5,00,000 in respect of each party during the year have been
made at prices which appear reasonable having regard to the prevailing
market price at the relevant time as per information available with the
Company.
6. The Company has not accepted any deposits from the public to which the
provisions of Section 58A, 58AA or any other relevant provisions of the
Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules, 1975
apply. Therefore, the provisions of clause (vi) of the paragraph 4 of the
order are not applicable to the Company.
7. In our opinion and according to information and explanation given to us,
the Company has an internal audit system commensurate with the size and
nature of its business.
8. We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed
by the Central Government under Section 209(1)(d) of the Companies Act,
1956 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.
9. In respect of Statutory dues:
a) According to the records of the Company, undisputed statutory dues
including Provident Fund, Employees` State Insurance, Income Tax, Sales
Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other
statutory dues have been generally regularly deposited with the appropriate
authorities. According to the information and explanations given to us, no
undisputed amounts payable in respect of the aforesaid dues were
outstanding as at March 31, 2012 for a period of more than six months from
the date of becoming payable.
b) The disputed statutory dues aggregating to Rs. 1.35 crore, that have
not been deposited on account of disputed matters pending before
appropriate authorities are referred in Annexure A.
10. The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred any cash losses during the
financial year covered by our audit and the preceding financial year.
11. Based on our audit procedures and according to the information and
explanation given to us, the Company has not defaulted in the repayment of
its dues to a Financial Institutions, Banks and Debenture Holders.
12. According to the information and explanations given to us, no loans and
advances have been granted by the Company on the basis of security by way
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 or a 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 shares, securities, debentures and other investments.
Accordingly, the provisions of clause 4 (xiv) of the Order are not
applicable to the Company.
15.(a) The Company has given a corporate guarantee for loans taken by its
wholly owned subsidiary Atlantis International Services Limited amounting
to US $ 40 million to Standard Chartered Bank.
(b) The Company has given a corporate guarantee for loans taken by its step
down subsidiary Ferro Zinc International FZE amounting to US $ 30 million
to ICICI Bank.
16. The Company has raised new term loans during the year. The term loans
outstanding at the beginning of the year and those raised during the year
have been applied for the purposes for which they were 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 there are no funds raised on short-term basis that have 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 created securities / charges in respect of secured
debentures issued.
20. During the period covered by our audit report, the Company has not
raised any money by public issues.
21. To the best of our knowledge and belief and 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 Prakkash Muni & Associates
Chartered Accountants
Firm Registration No: 111792W
Prakkash R. Muni
Partner
Membership No.: 30544
Place: Mumbai
Date : 9th May, 2012
Annexure "A" of the Audit Report
Nature of Amount Period Forum where dispute
Duty (Rs.) is pending
1. Service Tax 1,74,118 November 06 Commissioner of
to Central Excise
November 09 (Appeals)
2. Service Tax 35,29,749 July 05 to Central Excise and
July 07 Service Tax Appellate
Tribunal
3. Service Tax 1,61,751 April 06 to Central Excise and
October 06 Service Tax Appellate
Tribunal
4. Excise Duty 64,84,307 December 07 Central Excise and
to June 08 Service Tax Appellate
Tribunal
5. Excise Duty 30,82,563 December 07 Central Excise and
to June 08 Service Tax Appellate
Tribunal
6. Excise Duty 1,09,107 July 10 Commissioner Appeals
Note: In case of rejection of an appeal at any stage, penalty may be
leviable. |