MODERN STEELS LIMITED
ANNUAL REPORT 2011-2012
AUDITORS` REPORT
To
The Members,
Modern Steels Ltd.
MANDI GOBINDGARH
Dear Members,
1. We have audited the attached Balance Sheet of MODERN STEELS LTD, MANDI
GOBINDGARH as at 31st March, 2012 and also the Statement of Profit & Loss
and the Cash Flow Statement for the year ended on that date annexed there
to. These financial statements are the responsibility of Company`s
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
2. We 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 management, as well as evaluating the
overall financial statements presentation. We believe that our audit
provides a reasonable basis for ouropinion.
3. As required by Companies (Auditors` Report) order, 2003, issued by the
Central Government of India in term of sub-section (4A) of Section 227 of
the Companies Act, 1956 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 enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said order.
Further to our comments in the Annexure referred to in paragraph 3 above,
we report that:
i) We have obtained all the information & explanations, which to the best
of our knowledge and belief were necessary for the purpose of our audit;
ii) In our opinion, proper books of accounts as required by law have been
kept by the Company so far as appears from our examination of those books;
iii) The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the applicable
accounting standards referred to in sub-section (3C) of Section 211 ofthe
CompaniesAct, 1956;
v) On the basis of written representations received from the directors as
on 31st March, 2012, and taken on record by the Board of Directors; none of
the director is disqualified as on 31st March, 2012 from being appointed as
a Director in term of clause (g) of sub-section (1) of Section 274 of the
Companies Act, 1956;
vi) In our opinion and to the best of our information and according to the
explanations given to us, the said accounts read with the Significant
Accounting Policies and other notes thereon together 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 ofthe Company
as at 31st March, 2012;
b) In the case of the Statement of Profit & Loss, of the loss for the year
ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flow for the year
ended on that date.
FOR A. GOEL & ASSOCIATES
Chartered Accountant
Firm Registration No. 002743N
Place: Chandigarh ASHOK K. GOEL
Dated: 18th May, 2012 Partner
M. No. 81342
REFERRED TO PARAGRAPH 3 OF OUR REPORT OF EVEN DATE
To the best of our knowledge and belief and according to the information
and explanations given to us, we further report that:-
1.a) The Company has maintained proper records to show full particulars
including quantitative details & situation of its fixed assets.
b) As explained to us, the fixed assets have been physically verified by
the management which in our opinion is reasonable having regards to size of
the Company and nature of its assets. No material discrepancies have been
noticed during the year.
c) During the year substantial part of fixed assets have not been disposed
off by the Company.
2.a) The inventory of the Company has been physically\ verified by the
management during the year.
b) In our opinion and according to the information and explanation 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 nature of its business.
c) The Company has maintained proper records of its inventories and no
material discrepancies were noticed on physical verification.
3. In respect of loans, secured or unsecured granted by the Company to
companies, firms or other parties covered in the register maintained under
Section 301 of the Companies Act, 1956. According to the information and
explanation given to us:
a) The Company has granted unsecured loan to two companies during the year.
The maximum amount involved during the year is Rs.12.80 Crores & year end
outstanding is Rs. 1.86 Crores.
b) The rate of interest and other term & conditions of the above loan is,
in our opinion, not prima facie prejudicial to the interest of the Company.
c) The receipts of principal amounts and interest have been regular as per
stipulations.
d) There was no overdue amount.
In respect of loans, secured or unsecured taken by the Company from
companies, firms or other parties covered in the register maintained under
Section 301 of the Companies Act, 1956. According to the information and
explanation given to us.
e) The Company has taken unsecured loan from two companies and eight
parties during the year. The maximum amount involved during the year is
Rs. 3.31 Crores and year end outstanding is X.2.2% Crores.
f) The rate of interest and other terms and conditions of such loans are in
our opinion, prima facie not prejudicial to the interest of the Company.
g) Payment of principal amount and interest have been regular/ as per
stipulations.
4. There is adequate internal control systems commensurate with the size of
the Company and the nature of its business with regard to the purchase of
fixed assets, inventory, sale of goods & services. Further on the basis of
our examination of books and records of the Company and according to
information and explanations given to us we have neither came across nor
have been informed of any continuing failure to correct major weakness in
the aforesaid internal control procedures.
5. To the best of our knowledge and belief and according to to the
information and explanations given to us we are of the opinion that the
transactions need to be entered into the register maintained under Section
301 of the Companies Act,1956 have been so entered. In our opinion and
according to the information and explanation given to us, the transactions
made in pursuance of contracts or arrangements have been made at prices
which are reasonable having regard to prevailing market prices at the
relevant time.
6. In our opinion and according to the information and explanations given
to us, the Company has complied with the provisions of Section 58A and 58AA
of the Companies Act, 1956 and the rules framed there under with regard to
the deposits accepted from the public. No order has been passed by the
Company Law Board or National Company Law Tribunal or Reserve Bank of India
or any court or any other Tribunal.
7. In our opinion the Company`s present internal audit system is
commensurate with its size and nature of business.
8. On the basis of records produced to us, we are of the opinion that prima
facie the cost records prescribed by the Central Government of India under
Section 209(1)(d) of the Companies Act, 1956 have been made & maintained.
We have not carried out any detailed examination of such accounts records.
9.(a) According to the books and records as produced and examined by us in
accordance with generally accepted auditing practices in India and also
based on management representations, undisputed statutory dues in respect
of Provident Fund, Employee`s State Insurance dues, Investor Education and
Protection Fund, Income Tax, Wealth Tax, Service Tax, Cess and other
material statutory dues have generally been regularly deposited by the
Company during the year with the appropriate authorities in India and there
were no arrear outstanding in respect of above for a period of more than
six months as on 31st March, 2012.
(b) According to the records of the Company examined by us and the
information and explanations given to us, there are no dues of Sales Tax,
Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess
which have not been deposited on account of any dispute other than the
following amounting to Rs. 2.12 Crores. The details are as under:-
NATURE OF DUES/ A B C
NAME OF STATUTES
EXCISE DUTY :
CENTRAL EXCISE ACT 1944 PUNJAB AND HARYANA
HIGH COURT 1989-90 647885
CENTRAL EXCISE ACT 1944 COMMISSIONER
(APPEALS),
CHANDIGARH 2007-08 256533
CENTRAL EXCISE ACT 1944 COMMISSIONER 2007-08 to
(APPEALS), 2008-09 259085
CHANDIGARH
CENTRAL EXCISE ACT 1944 COMMISSIONER
(APPEALS),
CHANDIGARH 2007-09 850927
CENTRAL EXCISE ACT 1944 COMMISSIONER 2004-05
(APPEALS), to
CHANDIGARH 2006-07 8956212
CENTRAL EXCISE ACT 1944 CESTAT,
NEW DELHI 2004-05 79579
CENTRAL EXCISE ACT 1944 CESTAT, 2002-03 to
NEW DELHI 2004-05 1587580
CENTRAL EXCISE ACT 1944 CESTAT, 2005-06 to
NEW DELHI 2006-07 1130998
CENTRAL EXCISE ACT 1944 COMMISSIONER
(APPEALS),
CHANDIGARH 2007-08 264934
CENTRAL EXCISE ACT 1944 COMMISSIONER 2008-09 & 146314
(APPEALS), 2009-10
CHANDIGARH
CENTRAL EXCISE ACT 1944 COMMISSIONER 2007-08 to 311332
(APPEALS), 2008-09
CHANDIGARH
CENTRAL EXCISE ACT 1944 CESTAT, NEW DELHI 2004-05 to 355235
2005-06
CENTRAL EXCISE ACT 1944 CESTAT, NEW DELHI 2008-09 110550
CENTRAL EXCISE ACT 1944 CESTAT, NEW DELHI 2003-04 to 2078246
2007-08
CENTRAL EXCISE ACT 1944 CESTAT, NEW DELHI 2004-05 516272
CUSTOMS DUTY
CUSTOMS ACT 1962 CESTAT, AHMEDABAD 2004-05 2535450
INCOME TAX
INCOME TAX ACT 1961 COMMISSIONER (APPEAL), A/Y 2005-06 to 1073510
GURGAON 2010-11
A = FORUM WHERE DISPUTE IS PENDING
B = YEAR
C = DISPUTED AMOUNT Rs.
10. The Company has no accumulated losses as on 31st March, 2012. It has
suffered cash loss during the financial year ended on that date and earned
cash profit in the immediately 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 any repayment of
dues to financial institutions, banks, institution and have not issued any
debentures.
12. The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. In our opinion, considering the nature of activities carried on by the
Company during the year, the provisions of any special / statute applicable
to chit fund / nidhi / mutual benefit fund / societies are not applicable
to it.
14. The Company has not dealt or traded in shares, securities debentures or
other securities during the year.
15. The Company has not given any guarantee for loans taken by others from
bank or financial institutions.
16. In our opinion the term loans have been applied for the purpose for
which they were raised during the year.
17. On the basis of review of utilization of funds, which is based on
overall examination of the balance sheet of the Company, related
information as made available to us and as represented to us by the
management, funds raised on short term basis have not been used for long
term investment.
18. According to the information and explanation given to us. During the
year the Company has not made any preferential allotment of shares to any
companies, parties or firms covered in register maintained under Section
301 of the Companies Act, 1956.
19. The Company has not issued any debentures that were outstanding at any
time during the year.
20. The Company has not raised any money by public issue during the year.
21. As per the information and explanation given to us and on the basis of
examination of records, no material fraud on or by the company was noticed
or reported during the course of our audit.
FOR A. GOEL & ASSOCIATES
Chartered Accountant
Firm Registration No. 002743N
Place: Chandigarh ASHOK K. GOEL
Dated: 18th May, 2012 Partner
M. No. 813427 |