| We have audited the accompanying financial statements of CHASE BRIGHT
STEEL LIMITED ("the Company"), which comprise the Balance Sheet as
at March 31,2014, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended and a summary of significant
accounting policies and other explanatory information, which we have
signed under reference to this report.
Management's Responsibility for the Financial Statements
The Company Management is responsible for 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 Accounting Standards notified under the Companies Act, 1956
(the Act) read with the General Circular No. 15/2013 dated September
13, 2013 of the Ministry of Corporate Affairs in respect of section 133
of the Companies Act, 2013. This responsibility includes the design,
implementation and maintenance of internal control 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 conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. 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 misstatements.
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 control relevant to the Company's
preparation and fair presentation of the financial statements in order
to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness
of the Company's internal control. An audit also includes evaluating
the appropriateness of accounting policies use and the reasonableness
of the accounting estimates made by management, 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.
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:
(a) In the case of the Balance Sheet, of the state of affairs of the
company as at March 31, 2014;
(b) In the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
i. As required by the Companies (Auditor's Report) Order, 2003, as
amended by the Companies (Auditor's Report) (Amendment) Order, 2004,
issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the Act (hereinafter referred to as "the Order"),
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
explanation given to us, we give in the Annexure a statement on the
matters specified in Paragraphs 4 and 5 of the Order.
ii. As required by Section 227(3) of the Act, we report that:
a. 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;
b. 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.
c. The Balance Sheet, the Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the Books of
Accounts.
d. In our opinion, the Balance sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards notified under the Act read with the General
Circular No. 15/2013 dated September 13, 2013 of the Ministry of
Corporate Affairs in respect of section 133 of the Companies Act, 2013
to the extent applicable.
e. On the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274of the Act.
ANNEXURE TO INDEPENDENT AUDITORS' REPORT [Referred in Paragraph (i)
under the heading of "Report on Other Legal and Regulatory
Requirements" of our report of even date to the member of CHASE
BRIGHT STEEL LIMITED on the financial statements for the year ended
March 31,2014.]
(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, according to a phased programme designed to cover all the
fixed assets at least once during the year, which in our opinion, is at
reasonable intervals having regard to the size of the Company and
nature of its assets. As informed to us, no material discrepancies were
noticed on such verification.
(c) In our opinion, and according to the information and explanation
given to us, the Company has not disposed off a substantial part of its
fixed assets during the year so as to affect its going concern.
(ii) (a) The management has conducted physical verification of
inventories during the year.
In our opinion, the frequency of verification is reasonable.
(b) In our opinion, the procedures of physical verification of
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 inventory records, in our
opinion, the Company is maintaining proper records of inventories and
the discrepancies noticed on physical verification between the physical
stocks and book records were not material and have been properly dealt
with in the books of account
(iii) (a) As per information furnished, the Company has not granted any
loans, secured or unsecured to companies, firms other parties listed in
the register maintained under section 301 of the Companies Act, 1956.
Accordingly, clauses (b), (c) and (d) of paragraph 4(iii) of the said
Order are not applicable.
(b) The company has taken unsecured loans from five parties covered in
the register maintained under section 301 of the Companies Act, 1956.
The maximum amount involved during the year was Rs. 378.10 lakhs and the
year-end balance of loans taken from such parties was Rs. 350.10 lakhs.
(c) In our opinion and according to the information and explanation
given to us, the rate of interest and other terms and conditions for
such loans, are not, prima facie, prejudicial to the interest of the
Company.
(d) The Company is regular in repaying the principal amounts as
stipulated.
(iv) In our opinion, and according to the information and explanation
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. During the course of our audit, we have not observed any
continuing failure to correct major weakness in such internal control
system.
(v) (a) On the basis of the audit procedures performed by us and
according to the information and explanations given to us, we are of
the opinion that the particulars 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 or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of rupees five lakhs in
respect of any party during the year have been made at prices / rates
which are reasonable having regard to the prevailing market price /
rates at the relevant time.
(vi) In our opinion and according to the information and explanation
given to us, the Company has not accepted any deposits from the public
and hence the question of complying with the directives issued by the
Reserve Bank of India, the provisions of sections 58A and 58AA or any
other relevant provisions of the Act and the Rules framed thereunder
are not applicable.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of accounts maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of section (1) of section 209 of the Act
and are the opinion that, prima facie, the prescribed accounts and
records have been made and maintained. We have, however, not made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
(ix) (a) According to the information and explanation given to us and
the records of the Company examined by us, in our opinion, the Company
is generally regular in depositing the undisputed statutory dues
including provident fund, employees' state insurance, income-tax,
sales-tax, wealth-tax, service-tax, custom duty, excise and other
material statutory dues, as applicable to it, with the appropriate
authorities.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income-tax, wealth-tax,
service-tax, sales- tax, customs duty and other material statutory dues
were in arrears, as at March 31,2014 for a period of more than six
months from the date they became payable except Income-tax dues of Rs.
5.71 lakhs and NMMC Cess of Rs. 18.09 lakhs.
(c) According to the information and explanations given to us, there
are no dues of income-tax, sales-tax service tax, custom duty, excise
duty and cess which have not been deposited on account of any dispute.
(x) As on March 31,2014, the accumulated losses of the Company are not
more than 50% of its net worth. The Company has incurred cash losses
during the year ended on that date but not in the immediately preceding
financial year.
(xi) According to the information and explanations given to us and
records of the Company examined by us, the Company has not defaulted in
repayment of dues, if any, to a financial institution or bank. Further,
the Company has not issued any debentures and hence clause 4 (xi) of
the Order, to that extent, is not applicable.
(xii) In our opinion and according to the information and explanations
given to us, the Company has not granted any loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities. Therefore the provisions of Clause 4(xii) of the Order are
not applicable to the Company.
(xiii) In our opinion, the Company is not a chit fund, nidhi, mutual
benefit fund or a society. Accordingly, paragraph 4(xiii) of the said
Order is not applicable.
(xiv) According to the information and explanations given to us, the
Company is not dealing in or trading in shares, securities, debentures
and other investments. Accordingly, the provisions of clause 4(xiv) of
the Order are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has not given guarantees for loans taken by others from banks
or financial institutions.
(xvi) Based on the information and explanation given to us by the
management, the proceeds from the term loans availed were, prima facie,
have been applied for the purpose for which they were raised.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that the funds raised on short term basis have not been utilised for
long term investment.
(xviii) According to the information and explanations given to us, as
the Company has not made any preferential allotment of shares during
the year, Accordingly, Clause 4(xviii) of the Order is not applicable.
(xix) According to the information and explanations given to us, as the
Company has not issued any debentures, the question of creating
security or charge in respect thereof does not arise.
(xx) As the Company has not raised any money by way of public issues
during the year, the provisions of Clause 4(xx) of the Order are not
applicable.
(xxi) Based on the audit procedure performed and information and
explanations given to us by the management, we report that no fraud
(i.e. intentional material misstatements resultant from fraudulent
financial reporting and misappropriation of assets) on or by the
Company has been noticed or reported during the course of our audit.
For A. J. MEHTA & ASSOCIATES
Chartered Accountants
Firm Registration No. 106179W
(ATUL J. MEHTA)
Place : Mumbai Proprietor
Dated : May 30, 2014 Membership No.: 36959
|