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Chennai Ferrous Industries Ltd.

BSE: 539011 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE777O01016
BSE 16:01 | 02 Dec 178.50 1.75
(0.99%)
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184.00

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NSE 05:30 | 01 Jan Chennai Ferrous Industries Ltd
OPEN 182.00
PREVIOUS CLOSE 176.75
VOLUME 10868
52-Week high 347.45
52-Week low 82.70
P/E 2.76
Mkt Cap.(Rs cr) 64
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 182.00
CLOSE 176.75
VOLUME 10868
52-Week high 347.45
52-Week low 82.70
P/E 2.76
Mkt Cap.(Rs cr) 64
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Chennai Ferrous Industries Ltd. (CHENNAIFERROUS) - Auditors Report

Company auditors report

To

The Members of Chennai Ferrous Industries Limited

Report on the audit of the Ind As financial statements

Opinion

We have audited the accompanying Ind As financial statements of Chennai FerrousIndustries Limited (“the Company”) which comprise the balance sheet as at March31 2022 and the Statement of Profit and Loss including statement of other comprehensiveincome statement of cash flows and the statement of changes in equity for the year thenended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind As financial statements give the information required bythe Companies Act 2013 (‘Act’) in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2022 its profit (or Loss)* includingother Comprehensive income its cash flows and the changes in equity for the year ended onthat date.

Basis for opinion

We conducted our audit in accordance with the standards on auditing specified undersection 143 (10) of the Companies Act 2013. Our responsibilities under those Standardsare further described in the auditor’s responsibilities for the audit of thefinancial statements section of our report. We are independent of the Company inaccordance with the code of ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and thecode of ethics.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.

Key audit matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind As financial statements of the current period. Thesematters were addressed in the context of our audit of the Ind As financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

Information other than the financial statements and auditors’ report thereon

The Company’s board of directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Board’sReport including Annexures to Board’s Report Business Responsibility Report but doesnot include the Ind As financial statements and our auditor’s report thereon.

Our opinion on the Ind As financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.

In connection with our audit of the Ind As financial statements our responsibility isto read the other information and in doing so consider whether the other information ismaterially inconsistent with the standalone financial statements or our knowledge obtainedduring the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management’s responsibility for the financial statements

The Company’s board of directors are responsible for the matters stated in section134 (5) of the Act with respect to the preparation of these Ind As financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the Indianaccounting standards (Ind-As) specified under section 133 of the Act read with theCompanies (Indian Accounting Standard) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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 Ind As financial statementthat give a true and fair view and are free from material misstatement whether due tofraud or error.

In preparing the Ind As financial statements management is responsible for assessingthe Company’s ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The board of directors are also responsible for overseeing the Company’s financialreporting process.

Auditor’s responsibilities for the audit of the Ind As financial statements

Our objectives are to obtain reasonable assurance about whether the Ind As financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor’s report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these Ind As financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the Ind As financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists 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 Ind As financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor’s report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content of the Ind As financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Ind AS financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in

(i) planning the scope of our audit work and in evaluating the results of our work; and

(ii) to evaluate the effect of any identified misstatements in the Ind As financialstatements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards. From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the Ind As financial statements of the current period and are thereforethe key audit matters.

We describe these matters in our auditor’s report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Report on other legal and regulatory requirements

As required by the Companies (Auditor’s Report) Order 2016 (“theOrder”) issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act 2013 we give in the Annexure “A” a statementon the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

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 bestof 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 theCompany so far as it appears from our examination of those books;

(c) The balance sheet the statement of profit and loss including the statement ofcomprehensive income the cash flow statement and statement of changes in equity dealtwith by this report are in agreement with the books of account;

(d) In our opinion the aforesaid Ind AS financial statements comply with the Indianaccounting standards (Ind-As) specified under section 133 of the Act read with rule 7 ofthe Companies (Accounts) Rules 2014;

(e) On the basis of the written representations received from the directors as on March31 2022 taken on record by the board of directors none of the directors is disqualifiedas on March 31 2022 from being appointed as a director in terms of Section 164 (2) of theAct;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in “Annexure B”. Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company’s internal financial controlsover financial reporting;

(g) In our opinion the managerial remuneration for the year ended March 31 2022 hasbeen paid/provided by the company to its directors in accordance with the provisions ofsection 197 read with schedule V to the Act.

(h) With respect to the other matters to be included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us;

a. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements;

b. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; and

c. There were no accounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company

d. The management has represented that to the best of its knowledge and belief otherthan as disclosed in the notes to the accounts

i. The company has not advanced any funds to or in any other persons or entitiesincluding foreign entities (“Intermediaries”) with the understanding whetherrecorded in writing or otherwise that the Intermediary shall whether directly orindirectly lend or invest in other persons or entities identified in any manner whatsoeverby or on behalf of the company (“Ultimate Beneficiaries”) or provide anyguarantee security or the like on behalf of the Ultimate Beneficiaries other than thosedisclosed in the notes to accounts

ii. The company has not received any funds from any persons or entities includingforeign entities (“Funding Parties”) with the understanding whether recorded inwriting or otherwise that the company shall whether directly or indirectly lend orinvest in other persons or entities identified in any manner whatsoever by or on behalf ofthe Funding Party (“Ultimate Beneficiaries”) or provide any guarantee securityor the like on behalf of the Ultimate Beneficiaries other than those disclosed in thenotes to accounts

iii. Based on audit procedures carried out by us that we have considered reasonableand appropriate in the circumstances nothing has come to our notice that has caused usbelieve that the representations under sub-clause (i) and (ii) contain any materialmisstatement

iv. The company has not declared or paid any dividend during the year.

For S.K GULECHA & ASSOCIATES

Chartered Accountants

Firm Registration No. 013340S

(Sandeep Kumar Gulecha)

Membership No. 226263

UDIN No: 22226263AIOHGE6839

Place: Chennai

Date 07.05.2022

Annexure “A” to the Independent Auditor’s Report*

(Referred to in paragraph 1 under ‘Report on other legal and regulatoryrequirements’ section of our report to the members of Chennai Ferrous IndustriesLimited of even date)

1. In respect of the Company’s fixed assets:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment.

(b) The Company has a program of verification to cover all the items of Property Plantand Equipment in a phased manner over a period of three years which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. Howeverno physical verification has been carried on by the management during the year.Accordingly we were unable to comment on whether any material discrepancies were noticedon such verification and whether they are properly dealt with in the financial statements.

(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds provided to us we report thatthe title deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name of the Company as at the balance sheet date.

(d) The company has revalued its Property Plant and equipment during the course of theyear based on valuation by a Registered Valuer and the details of such revaluation wherethe change is greater than or equal to 10% of the carrying amount of such class of PPE areas follows:

Class of PPE Carrying amount before revaluation Revalued Amount Change
Land 21124604 276930000 255805396
Buildings 60923650 70777936 9854286

2. The inventory (if any) has been physically verified by the management duringthe year at reasonable intervals. Based on the explanations books and records madeavailable there no inventories available with the company. Accordingly paragraph 3(ii)of the Order is not applicable.

3. According to information and explanation given to us the company has notgranted any loan secured or unsecured to companies firms limited liability partnershipsor other parties covered in the register required under section 189 of the Companies Act2013. Accordingly paragraph 3 (iii) of the order is not applicable.

4. In our opinion and according to information and explanation given to us inrespect of loans investments guarantees and security the Company has complied with theprovisions of sections 185 and section 186 of the Companies Act 2013 except applicabilityof interest on the loans and advances given. The company has not charged any interest onthe advances given under the proviso of Section 186.

5. In our opinion and according to the information and explanations given to usthe company has not accepted any deposits and accordingly paragraph 3 (v) of the order isnot applicable.

6. The Central Government of India has not prescribed the maintenance of costrecords under subsection (1) of section 148 of the Act for any of the activities of thecompany and accordingly paragraph 3 (vi) of the order is not applicable.

7. In respect of statutory dues:

(a) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employees’state insurance income-tax sales- tax service tax goods and service tax duty ofcustoms duty of excise value added tax cess and other material statutory dues have beengenerally regularly deposited during the year by the company with the appropriateauthorities.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees’ state insurance income-tax sales-tax service tax goods and service tax duty of customs duty of excise value added taxcess and other material statutory dues were in arrears as at March 31 2022 for a periodof more than six months from the date they became payable

(b) According to the information and explanations given to us and the records of thecompany examined by us there are no dues of income-tax sales- tax service tax goodsand service tax duty of customs duty of excise and value added tax which have not beendeposited on account of any dispute except as per details below:

Statute Nature of dues Amount (Rs.in lakhs) Period to which the amount relates Forum where the dispute is pending
NIL

8 In our opinion and according to the information and explanations given to usthe company has not defaulted in repayment of dues to any financial institutions or banksor any government. or any debenture holders during the year. The Company does not have anydues to debenture holders during the year.

9. The term loans taken during the year have been applied for the purposes forwhich those are raised. The Company has not raised any money by way of initial publicoffer or further public offer (including debt instruments).

10. To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or no material fraud on the Company by its officersor employees has been noticed or reported during the year.

11. According to the information and explanations given by the management themanagerial remuneration has been paid/provided in accordance with the requisite approvalsmandated by the provisions of section 197 read with Schedule V of the Companies Act 2013

12. The Company is not a Nidhi Company and accordingly paragraph 3 (xii) of the orderis not applicable to the Company.

13. According to the information and explanations given to us and based on ourexamination of the records of the company transactions with the related parties are incompliance with section 177 and 188 of the Act. Where applicable the details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

14 According to the information and explanations given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the order is not applicable.

15 According to the information and explanations given to us and based on ourexamination of the records of the company the company has not entered into non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)of the order is not applicable.

16 According to the information and explanations given to us and based on ourexamination of the records of the company the company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934.

17. On the basis of the financial ratios aging and expected dates of realization offinancial assets and payment of financial liabilities other information accompanying thefinancial statements the auditor’s knowledge of the Board of Directors andmanagement plans we are of the opinion that no material uncertainty exists as on the dateof the audit report that company is capable of meeting its liabilities existing at thedate of balance sheet as and when they fall due within a period of one year from thebalance sheet date.

18. In our opinion and according to the information and explanations given to us thereare no transactions not recorded in the books of account that have been surrendered ordisclosed as income during the year in the tax assessments under the Income Tax Act 1961(43 of 1961). Accordingly paragraph 3 (viii) of the Order is not applicable.

19. There has been no resignation of the statutory auditors during the year.Accordingly paragraph 3 (xviii) of the Order is not applicable.

20. In our opinion and according to the information and explanations given to us theCompany does not have investments in subsidiaries/ associates or joint venture companies.Accordingly paragraph 3 (xxi) of the Order is not applicable.

For S.K GULECHA & ASSOCIATES

Chartered Accountants

Firm Registration No. 013340S

(Sandeep Kumar Gulecha)

Membership No. 226263

UDIN No: 22226263AIOHGE6839

Place: Chennai

Date: 07.05.2022

Annexure “B” to the Independent Auditor’s Report

(Referred to in paragraph 2 (f) under ‘Report on other legal and regulatoryrequirements’ section of our report to the Members of Chennai Ferrous IndustriesLimited of even date)

Report on the internal financial controls over financial reporting under clause (i) ofsub - section 3 of section 143 of the Companies Act 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of ChennaiFerrous Industries Limited (“the Company”) as at March 31 2022 in conjunctionwith our audit of the financial statements of the Company for the year ended on that date.

Management’s responsibility for internal financial controls

The board of directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors’ responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the “Guidance Note”) issued by the Institute of Chartered Accountantsof India and the standards on auditing prescribed under Section 143 (10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. Thosestandards and the guidance note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor’s judgement including the assessment of the risks ofmaterial misstatement in the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company’s internal financial controlsystem over financial reporting.

Meaning of internal financial controls over financial reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that

(i) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(iii) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company’s assets that could havea material effect on the financial statements.

Limitations of internal financial controls over financial reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management of override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion and according to the information and explanations given to us theCompany has in all material respects an adequate internal financial control system overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as at March 31 2022 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India.

For S.K GULECHA & ASSOCIATES

Chartered Accountants

Firm Registration No. 013340S

(Sandeep Kumar Gulecha)

Membership No. 226263

UDIN No: 22226263AIOHGE6839

Place: Chennai

Date: 07.05.2022

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