TO THE MEMBERS OF ASHIANA ISPAT LIMITED
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of Ashiana IspatLimited ("the Company") which comprise the balance sheet as at 31st March 2020the statement of profit and loss (including other comprehensive income) statement ofchanges in equity and statement of cash flows for the year then ended and notes to thefinancial statements including a summary of the significant accounting policies and otherexplanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2020 and loss and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance withthe Standards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those SAs are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. Weare independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalindependent responsibilities in accordance with these requirements and the ICAI Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion on financial statements.
Key Audit Matters
Keyaudit mattersare those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined the following matter to be key audit matter to becommunicated in our audit report :
|Key Audit Matters ||Auditors Response |
|On 24th March 2020 Our Hon'ble Prime Minister had announced a national wide lockdown in all over the country due to pandemic situation of COVID-19 (Noval Corona Virus) from 25th March 2020 which was further extended by time to time. As a result of this lockdown situation there is weak demand of steel in the market due to lower capital expenditure by govt and others because funds is being moved from infrastructure to Public Health. Subsequently production line of the whole steel ||Based on the discussions with management company has resumes its' commercial production on 20th May 2020 ensuring compliances of strict protocol measures of the Govt of India. |
|industry and the company is materially affected.. From 20th May 2020 the company resume it's production line and started it's commercial production. As a result of this company bears some revenue loss however the quantum of this revenue loss is not ascertainable. Being a Non-Adjusting event as per Ind AS-10 no adjustment is required for this event in the financial statements. The management of the Company has reviewed the situation and had made a strategy to cope with the impact likely to be arise and as per the risk analysis by the management company is confident to manage the resources therefore the financial statements of the company have been prepared on going concern basis. ||The management is in the opinion that company will continue in operation in accordance with the demand of the market and in compliances with protocol of Ministry of Home Affairs issued time to time and the company has already in place cash flow management procedure and have taken various steps to reduce overhead to manage the operations of the company and to manage resources of the company therefore accounts of the company has been prepared on going concern basis. Disclosure as required under Ind AS-10 has suitably been made in financial statements. |
There are no other key audit matters to be communicated in our report.
Information Other than the Financial Statements and Auditors'Report Thereon
The Company's management and Board of Directors are responsible for thepreparation of the other information. The other information comprises the informationincluded in the Management discussion and analysis Board Report including annexures toBoard report Corporate Governance report and shareholder information etc. but does notinclude the financial statements and our auditors' report thereon.
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon. In connectionwith our audit of the financial statements our responsibility is to read the otherinformation and in doing so consider whether the other information is materiallyinconsistent with the financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.
Management's Responsibility for the Financial Statements
The Company's management and Board of Directors are responsible for thematters stated in section 134(5) of the Act with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities selection and application of appropriateaccounting policies making judgments and estimates that are reasonable and prudent anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements management and Board ofDirectors are responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing theCompany's financial reporting process. Auditor's Responsibilities for the Audit of theFinancial Statements
Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thefinancial statements whether due to
fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting andbased on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our workj and (ii) toevaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditors' report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors' Report) Order 2016("the Order") issued by the Central
Government in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.
(A) As required by Section 143(3) of the Act we report that:
a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.
c) The balance sheet the statement of profit and loss (including othercomprehensive income) the statement of changes in equity and the statement of cash flowsdealt with by this Report are in agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with theInd AS specified under section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.
e) On the basis of the written representations received from thedirectors as on 31st March 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2020 from being appointed as a director interms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls withreference to financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B". Our report expresses anunmodified opinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditors'Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us:
i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements - Refer Note 41 to the financialstatements.
ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long- termcontracts including derivative contracts.
iii. There is no such amount which is required to be transferred to theInvestor Education and Protection Fund by the Company.
THE ANNEXURE REFERRED TO IN INDEPENDENT AUDITOR'S REPORT TO THE MEMBERSOF THE GOMPANY ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2020 WE REPORTTHAT:
(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.
(b) The fixed assets has been physically verified by the management atthe reasonable which in our opinion is considered reasonable having regard to the size ofthe Company and the nature of its assets. No material discrepancies were noticed on suchverification.
(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.
(ii) According to the information and explanation given to us and onthe basis of our examination of the records of the Company physical verification of theinventory has been conducted at reasonable intervals by the management and discrepanciesnoticed which were not material in nature have been properly dealt with in the books ofaccounts.
(iii) According to the information and explanation given to us duringthe year the Company has not granted any loans secured or unsecured to companies firm orother parties covered in the register maintained under section 189 of the Companies Act2013.
(iv) In our opinion and according to the information and explanationsgiven to us there are no loans investments guarantees and securities granted during theyear in respect of which provisions of section 185 and 186 of the Companies Act 2013 areapplicable.
(v) The Company has not accepted deposits from public within themeaning of provisions of Section 73 to 76 or any other relevant provisions of theCompanies Act 2013 and rules framed there under.
(vi) We have broadly reviewed the books of accounts maintained by theCompany pursuant to the Rules made by the Central Government for the maintenance of costrecords under section 148 of the Act and are of the opinion that prima facie theprescribed accounts and records have been made and maintained however we have not made adetailed examination of such cost records.
(vii) (a) According to the information and explanations given to us andon the basis of our examination of the records of the Company provident fund employeestate insurance income-tax duty of customs cess goods & services tax and otherapplicable undisputed statutory dues have generally been regularly deposited during theyear by the Company with the appropriate authorities. According to the information andexplanations given to us no undisputed amounts payable in respect of provident fundemployee state insurance income tax duty of customs cess goods & services tax andother applicable statutory dues were in arrears as at 31st March 20120 for a period ofmore than six months from the date they became payable.
(b) According to the information and explanations given to us thereare no material dues of income tax or duty of custom or cess Goods & Services Taxwhich have not been deposited with the appropriate authorities on account of any disputeexcept following:
|Name of the Statutes ||Nature of Dues ||Amount in INR ||Financial year to which amount relates ||Forum where dispute is pending |
|Income Tax Act 1961 ||Income Tax ||116111 ||AY 2013-14 ||CIT (A) Alwar |
(viii) The Company has not defaulted in repayment of loan or borrowingto a financial institution or bank government. There are no debenture holders.
(ix) According to the information and explanation given to us &records examined by us the term loans taken during the year have been applied for thepurpose for which they were obtained. The Company has not raised money by way of initialpublic offer or further public offer (including debt instruments) during the year
(x) According to the information and explanation given to us no fraudby the Company or on the company by its officers or employees has been noticed or reportedduring the course of our audit.
(xi) According to the information and explanations give to us and basedon our examination of the records of the Company the Company has paid/provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanationsgiven to us the Company is not a nidhi Company as prescribed u/s 406 of the act.accordingly paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the financial statements as requiredby the applicable accounting standards.
(xiv) According to the information and explanation given to us theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year.
(xv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with him. Accordingly paragraph3(xv) of the Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.
REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OFSUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT 2013 ('THE ACT'')
We have audited the internal financial controls over financialreporting of Ashiana Limited (''the Company'') as of 31st March 2020 in conjunction withour audit of the financial statements of the Company for the year ended on that date.
MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Company's management and Board of directors are responsible forestablishing and maintaining internal financial controls based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia ('ICAI'). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to Company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the ''Guidance Note'') and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company's internal financial controls system over financialreporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A Company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial control overfinancial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the Company arebeing made only in accordance with authorizations of management and directors of theCompany and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the Company's assets thatcould have a material effect on the financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIALREPORTING
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31st March 2020 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
|For DV Aggarwal & Co. LLP Chartered Accountants FRN : 001263C / C400022 || |
|Raghav Aggarwal || |
|Partner ||Date : 28th July 2020 |
|M.No. 412838 UDIN : 20412838AAAADR5544 ||Place : Bhiwadi |