| We have audited the accompanying standalone Financial Statements of M/S
IMPEX FERRO TECH LIMITED ("the Company"), which comprise the Balance
Sheet as at 31st March 2015, the Statement of Profit and Loss and Cash
Flow Statement for the year ended on that date, and a summary of
significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
The Company's management is responsible for the matters stated in
Section 134(5) of 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 are 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
there under.
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 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 control system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by the company's management, as well as
evaluating the overall presentation of the Standalone 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,
(a) In the case of Balance Sheet of the state of affairs of the Company
as at 31st March 2015;
(b) In the case of Statement of Profit and Loss, of the Loss of the
Company for the year ended on that date; and
(c) In the case of Cash Flow Statement, of the Cash Flows of the
Company for the year ended on that date.
Emphasis of Matter
1. We draw attention to Note No.27 of the financial results, relating
to CDR Package. The CDR Package of the company has been sanctioned vide
LOA dated 10th November, 2014. Pursuant to the said LOA, implementation
of CDR policy is completed and the effect thereof has been given in
these accounts with respect to the CDR scheme as per the said LOA. The
said accounts are subject to confirmation and reconciliation with the
Lenders. The reported financials would have consequential impact once
the reconciliation is completed, the quantum where of remains
unascertained.
Our report is not qualified in respect of this matter.
2. We draw attention to the Note No. 39 of the statement which
indicates that as at March 31st 2015, the accumulated losses amounting
to ' 6,349.26 Lacs has substantially eroded net worth of the Company,
indicating the existence of a material uncertainty about the company's
ability to continue as a going concern. These financial results have
been prepared on a going concern basis for the reasons stated in the
said note.
Our report is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2015 ('the
order') issued by the Central Government of India in terms of
subsection (11) of the section 143 of the Act, we give in the Annexure
a statement on the matters specified in the paragraphs 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 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 written representations received from the directors
as on 31st March 2015, and 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; and
(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 the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on the
financial position in the Financial Statements - Refer Note - 28 A(b)
to (f) to its Financial Statements ;
ii. The Company did not have any long term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There were no amounts which were required to be transferred by the
Company to the Investor Education and Protection fund.
Annexure to the Independent Auditors' Report
Annexure referred to in paragraph 1 under the heading of "Report on
Other Legal and Regulatory Requirements" of even date to the members of
IMPEX FERRO TECH LIMITED on the accounts of the Company for the year
ended 31st March 2015. On the basis of such checks as we considered
appropriate and according to the information and explanations given to
us during the course of our audit, we report that:
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.
(b) All fixed assets were physically verified by the management during
the year in accordance with a planned program of verifying them once in
three years which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. No material
discrepancies were noticed on such verification.
(ii) (a) The inventory, except goods-in-transit has been physically
verified by the management during the year. In respect of inventory
lying with the third parties, these have substantially been confirmed by
them. In our opinion, the frequency of such verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of stocks 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 inventory.
The discrepancies noticed on verification between the physical stocks
and the book records were not material having regard to the size of the
operations of the Company and the same have been properly dealt with in
the books of account.
(iii) The Company has not granted any loan, secured or unsecured, to
companies, firms or other parties listed in the register maintained
under Section 189 of the Companies Act, 2013. Therefore, the provisions
of Clause (iii) (b), (c) and (d) of the said Order are not applicable
to the Company.
(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 inventories and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across, nor have been
informed of, any continuing failure to correct major weaknesses in the
aforesaid internal control system.
(v) The Company has not accepted any deposits from the public and
consequently, the directives issued by Reserve Bank of India and
provisions of Section 73 to Section 76 of the Companies Act, 2013 and
the rules framed there under are not applicable.
(vi) We have broadly reviewed the books of account maintained by the
Company in respect of manufacture of Iron & steel product & Power
generation unit pursuant to the Rules made by the Central Government
for the maintenance of cost records under Section 148(1) of the
Companies Act, 2013, and we are of the opinion that prima facie, the
records have been maintained. We have not however made a detailed
examination for the records with a view to determining whether they are
accurate and complete.
(vii) (a) According to the information and explanations given to us and
on the basis of our examination of the books of account, the Company has
been regularly deposited undisputed amount payable in respect of
Provident Fund, Employees' State Insurance, Income -Tax, Service Tax,
Sales Tax, Custom Duty, Excise Duty, Value Added Tax, Cess, Professional
Tax, and other Statutory Dues during the year with appropriate
authorities. However, there have been delays in few cases.
(b) According to the information and explanations given to us, there
are no dues of Sales Tax, Custom Duty, Wealth Tax, Excise Duty and Cess
which have not been deposited as on 31st March, 2015 with the
appropriate authorities on account of any dispute except the following
cases which are as follows:
Name of the Nature of Dues Financial Year Rs./Lacs
statute
2005- 06 12.36
2005-06 and 8.26
Central Excise
Act, 1994 Excise Duty 2006-07
2006- 07 0.5
2007- 08 15.55
Total 36.67
Name of the Forum where Dispute is Pending
statute
Commissioner of Central Excise (Appeals) (III)
CESTAT, Calcutta Bench
Central Excise
Act, 1994
Commissioner of Central Excise (Appeals) (IV)
CESTAT, Calcutta Bench
Total Rs. 20.92 Lacs paid under protest
Name of the Nature of Dues Financial Year Rs./Lacs
statute
2005-06 304.13
Central Sales
2006-07 479.91
Tax and Local VAT
2008- 09 748.45
Sales Tax Act
2009- 10 211.18
Total 1,743.67
W.B. Entry Tax Entry Tax 2012-13 and 272.51
Act 2013-14
Total 272.51
Income Tax Income Tax 2011-12 1606.46
Act, 1961
Total 1606.46
Name of the Forum where Dispute is Pending
statute
WBCT, Appellate and Revisional Board
Central Sales
WBCT, Appellate and Revisional Board
Tax and Local
WBCT, Appellate and Revisional Board
Sales Tax Act
Sr. Joint Commissioner of Commercial Taxes
Total Rs. 88.62 Lacs paid under protest
W.B. Entry Tax Hon'ble High Court of Calcutta
Act
Total Rs. NIL paid under protest
Income Tax Commissioner of Income Tax (Appeals), Kolkata
Act, 1961
Total Rs. NIL paid under protest
(c) There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
(viii) The accumulated losses at the end of the financial year are not
less than fifty percent of its net worth and the company has incurred
cash losses during the financial year covered by our audit and in the
immediately preceding financial year.
(ix) Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to the financial
institutions or banks.
(x) The Company has not given any guarantee for loans taken by others
from banks or financial institutions during the year.
(xi) In our opinion and according to the information and explanations
given to us, the term loan have been applied for the purpose they were
obtained.
(xii) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
year.
For R. Kothari & Company
Chartered Accountants
FRN : 307069E
Manoj Kumar Sethia
Place : Kolkata Partner
Date : 30th May, 2015 Membership No. 064308
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