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जेनिथ स्टील ट्यूब्स एंड इंडस्ट्रीज

बीएसई: 526267  |  NSE: N.A  |  ISIN:  |  Steel - Medium & Small

खोजें जेनिथ स्टील ट्यूब्स एंड इंडस्ट्रीज कनेक्शन
लेखा परीक्षकों की रिपोर्ट वर्षांत : Mar '10
1. We have audited the attached Balance Sheet of M/S ZENITH STEEL TUBES
 AND INDUSTRIES LIMITED, as at 31st March, 2010 and also Profit & 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 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 over all financial statement presentation. we believe that our audit provides a reasonable basis for our opinion.

3.As required by the Companies (Auditor's Report) Order, 2003 and read with the amendments made 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 companies Act, 1956 and on the basis of such checks of books and records of the company as we considered appropriate and according to the information any explanation given to us we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent they applicable to the company.

4.Further to our comments in the Annexure referred to in paragraph (3) above, we report that:-

(i) We have obtained all the information and explanation, except as stated in pare (vii) (c) below, 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 the law have been kept by the company so far as appears from our examination of those books.

(iii) The Balance Sheet, the Profit & Loss Account and the Cash Flow statement dealt with by this report are in agreement with the books of accounts;

(iv) In our opinion, subject to Note No.7 & 8 of schedule-'S' regarding provision for gratuity and leave encashment being made on estimated basis instead of on the basis of actuarial valuation as required by Accounting Standard-15 (Revised 2005) Accounting for Employee Benefits in the financial statements of employers issued by the Institute of Chartered Accountant of India, and Note No.17 of Schedule 'S' regarding non ascertainment and non provision of impairment loss in the value of Fixed assets as required under Accounting Standard 28 Impairment of Assets issued by Institute of Chartered Accountant of India, the attached Balance Sheet, the profit & Loss Account and the cash Flow statement is in compliance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 to the extend applicable.

(v) On the basis of written representations received from the directors' as on 31.03.2010, and taken on record by the Board of Directors, we report that none of the director is disqualified as on 31.03.2010 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

(vi) Attention invited to a) Note No.6 of Schedule 'S' regarding the One Time Settlement accepted by the SICOM Ltd. for Rs.23.46,000/- as full and final payment against the total dues payable of Rs.12,53.44,192/- as per books of account and the One Time Settlement accepted by SBI. SBI Capital Mkts Ltd. for Rs.15,43,250/ as full & Final payment against the total dues payable of Rs.2,19,48,123/- & accordingly the balance amount of Rs. 14,34.03.065/ has been written back during the year and shown as exceptional items in the profit & Loss Account.

b) Note No.6(b) of Schedule'S' regarding the company's proposal for One Time Settlement (OTS) with IFCI Ltd. which has been agreed for Rs. 3,38,52,000/- vide letter dated 12th December, 2007 subject to fulfillment of the stipulated conditions. As per the said letter, the OTS should have been completed by 30th June.2008. Pending the approval of the Draft Rehabilitation Scheme (DRS) submitted to BIFR thought IFCI Ltd. and fulfillment of the stipulated conditions, the effect of the OTS has not been given in the financial statements. The total outstanding liability to IFCI Ltd. towards principle and interest upto 31st March, 2010 as per books of accounts aggregates to Rs.303,43,05,373/-.

vii) a) Note No.5 of Schedule S regarding preparation of accounts on the basis of going concern in spite of loss Rs.48,63,00,170/-incurred during the year and brought forward losses of Rs. 2,58,21,19,432/- which has resulted in negative net worth of Rs. 2,98,31,40,363/- as at 31st March, 2010. The Company also has working capital deficiency. The company is alsoa sick company within the meaning of Section 3(1) (o) of the Sick Industrial Companies (Special Provisions) Act 1985. These factors raise doubts about, the Company s ability to continue as a going concern which is dependent upon infusion of long terms funds for its future operations. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of assets carrying amount or the amount and classification of liabilities that might result, should the company be unable to continue as a going concern.

b) No provision has been made for sundry debtors for Rs.3,84.91,736/- and advances for capital goods for Rs. 2,08,11,349/- which are outstanding since long/doubtful in nature, (Refer Note No. 3 of schedule- S)

c) No provision has been made for penal interest and liquidated damages on over dues on account of certain lease transactions.

In absence of necessary information, the consequential impact thereof on the accounts is not ascertainable.(Refer Note No.4 of Schedule - S).

d) The balance of sundry debtors, sundry creditors, deposits, secured loan, unsecured loans, loans and advances and dues to secured creditors etc. are subject to confirmation and reconciliation, consequential impact thereof on the accounts is not ascertainable. (Refer Note No.15 of Schedule-S).

e) Provision for gratuity and leave encashment is made on estimated basis instead of on the basis of actuarial valuation as required by Accounting Standard 15 (Revised 2005) Accounting for Retirement Benefits in the financial statements' of employers the consequential impact thereof on the accounts is not ascertainable. (Refer Note No. 7 & 8 of Schedule - ).

f) Note No. 17 of schedule-S regarding non ascertainment and non provision of impairment loss in the value of Fixed Assets as required under Accounting Standard-28 Impairment of Assets issued by Institute of Chartered Accountant of India, the consequential impact thereof on the accounts is not ascertainable.

g) Note No. 20 of Schdule-S regarding non ascertainment of Creditors falling under Micro, small and Medium Enterprises Development Act, 2006 and consequent non-provision of Interest on amounts due to such creditors, the resulting impact thereof on the account is not ascertainable.

viii). We further report that, without considering item mentioned at para (vii)(a),(c),(d),(e),(f), and (g) above, the effect of which could not be determined, had the observation made by us in paragraphs (vii) (b) above been considered, the loss for the year would have been Rs. 54,56,03,225/- (as against the reported figure of Rs. 48,63,00,170/-). Accumulated loss would have been Rs. 312,77,22,687/- (as against the reported figure of Rs. 306,84,19,602/-) sundry debtors would have been Rs. 42,95,567/- (as against the reported figure of Rs. 4,27,87,300/-), Advance for capital goods would have been Rs. Nil (As against the reported figure of Rs. 2,08,11,349/-).

ix) In our opinion and to the best of our information and according to the explanations given to us, because of the effect of the matters discussed in paragraphs vii & viii above, the financial statements do not 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 affair, of the Company as at 31st March, 2010 and

b) in cash of the Profit and Loss Account, of the lose 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.

ANNEXURE TO THE AUDITORS REPORT

Referred to in the Report of even date to the Members ZENITH STEEL TUBES AND INDUSTRIES LIMITED on the accounts for the year ended March 31, 2010.

1.a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) We have been informed that most of fixed assets have been physically verified by the management during the year. In our opinion the frequency of the verification is reasonable . No material discrepancies were noticed on such verification.

c) During the year the company has not disposed off any substantial part of the fixed assets.

2.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 procedure of physical verification of the inventory followed by the management are reasonable & adequate in relation to the size of the Company & 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 the inventory and no material discrepancies were noticed on physical verification between the physical stock and book records.

3.a) The Company has not granted Loans to the companies, Firms or other parties covered in the Register maintained under Section 301 the Companies Act.

b) The Company had taken, unsecured loan from three parties covered in the register maintained under section 301 of the Companies Act. 1956. The maximum amount involved during the year was Rs.73,78.000/- and the year end balance of loans taken from such parties was Rs. 73,78,000/-.

c) In our opinion and according to information and explanation given to us, the rate of interest and other terms and conditions on which these loans have been taken are not prima facie prejudicial to the interest of the company.

d) We were informed by the company that the terms of repayment have not been stipulated therefore we are unable to comment whether the company is regular in repayment of principal and interest thereon.

e) As there is no stipulation in respect of repayment of loan taken therefore we are unable to comment whether there is any overdue amount of such loans.

4. In our opinion, and according to information and explanations given to us, there are adequate internal control procedures commensurate with size of the Company and the nature of its business with regard to the purchase of inventory, fixed assets and for sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control.

5.a)In our opinion, and according to the information and explanation given to us, the particulars of contracts or arrangements, referred to in section 301 of the Companies. Act, 1956 have been entered in the register required to be maintained under that section.

b) In our opinion and according to the information and explanations given to us , the transaction made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public and consequently the provision of Sections 58A and 58AA or any othe relevant provision of the companies Act, 1956 and the rules framed there under are not applicable.

7. In our opinion the Internal audit system is not commensurate With the size and nature of its business as the scope and area of its coverage needs to be enhanced.

8. The Central Government has prescribed maintenance of cost records u/s.209 (l)(d) of the Companies Act, 1956. However the company has not made and maintained any such record.

9.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 regular in depositing, with appropriate a authorities undisputed statutory dues including Provident Fund, Sales Tax, Employees State Insurance, Income Tax, Wealth tax. Custom Duty, Excise duty, Service tax, Cess & any other material statutory dues applicable to except for dues of Tax Deducted at Sources where delay in payment have been observed and Deferral Sales Tax & Gram Pancnayat Tax which has not been paid. According to the information and explanations given to us, no undisputed Statutory dues payable were outstanding as at 31st,March 20l0 for a Period of more than six months from the date they became payable except for dues in respect Deferral Sales Tax amounting to Rs.5,32,762/ and due related to Gram Panchayat Tax amounting to Rs.5,32,890/-.

b) According to the information and explanation given to us, there is no statutory dues in respect of Sales Tax, Income tax. Custom duty, Wealth tax, Excise duty, Service tax, and Cess that have not been deposited With the appropriate authorities on account of any disputes.

10. The accumulated losses of the company are more than fifty percent of its net worth. The company has incurred cash losses during the financial year covered by our audit and also in the immediately preceding financial year. Further the company has been declared as sick industry company by BIFR vide order dated 29/06/2001.

11. The company has defaulted in repayment of dues to Financial Institution and Bank. Particulars of defaults by the company in repayment of dues to bank and financial institution are as follows.

Sr. Name of the Financial Description period of defaul No. Institution / Bank of Loan 01. Industrial Finance Coprn. Secured Loan Default Continues of India Ltd. Since 15.10.1997

02. Maharashtra State Finance Secured Loan Default Continues Corporation Ltd. Since 15.09.1997

04 Industrial Finance Coprn. Lease Rental Default Continues of India Ltd Since 01.11.1997

05. Bank of Madura Lease Rental Default Continues Since 30.06.1997

06. Development Credit Bank Lease Rental Default Continues of India Ltd. Since 29.06.1997

TOTAL - -

Name of the Financial AMOUNT (Rs. In.Lakhs) Institution / Bank Principle Interest TOTAL (Inc.Penal Int)

Industrial Finance Coprn 11,20,00,000/- 140,78,86,911/- 151,98,86,911/- of India Ltd

Maharashtra State Finance 21,47,632/- 4,92,71,138/- 5,14,18,770/- Corporation Ltd

Industrial Finance Coprn 12,95,45,298/- 138,48,73,164/- 151,44,18,462/- of India Ltd

Bank of Madura 23,16,275/- - 23,16,275/-

Development Credit Bank 78,15,250/- 44,32,505/- 1,22,47,755/- of India Ltd.

TOTAL 25,38,24,455/- 284,64,63,718/- 310,02,88,173/-

* Attention is invited to paragraph 4(vii)(c) of our report of even date regarding non-provision for penal interest and liquidated damages on over dues on account of certain lease transactions in absence of necessary information we are unable to comment about amount of default of penal interest in respect of the same.

During the year One Time Settlement accepted by SICDM Ltd. for Rs, 23,46.000/- as full & Final payment against the total dues payable ok Rs. 12,53,44,192/- as per books of accounts.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a chit fund or a nidhi/mutual benefit fund or a society.

14. In our opinion and according to the information and explanations given to us, the Company is not dealing in shares, securities, debentures, and other investments.

15. According to the information and explanations given to us, the company has not given any guarantees for loans taken by others from banks or financial institutions.

16. The Company has not taken any term loans during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March. 2010, we report that short term funds raised during the year have been used for long term purposes to the extent of Rs. 47,90,92.338/- and the cumulative amount of funds raised on short term basis amounting to Rs.2,97,25,07,787/- have been used for long term purposes which mainly includes accumulated losses.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

19. In our opinion and according to the information and explanations given to us, the Company has not issued any secured debentures during the period covered by our report.

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 explanation given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

for KHANDELWAL JAIN & CO.

Chartered Accountants

(Firm Reg.No.105049W)

(NARENDRA JAIN)

partner

M.No. 048725

Place: Mumbai

Date : 30th August, 2010

स्रोत: रेलीगरे टेचनोवा

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