Eastcoast Steel Ltd.
|BSE: 520081||Sector: Metals & Mining|
|NSE: ESTCSTSTEL||ISIN Code: INE315F01013|
|BSE 00:00 | 01 Mar||Eastcoast Steel Ltd|
|NSE 05:30 | 01 Jan||Eastcoast Steel Ltd|
|BSE: 520081||Sector: Metals & Mining|
|NSE: ESTCSTSTEL||ISIN Code: INE315F01013|
|BSE 00:00 | 01 Mar||Eastcoast Steel Ltd|
|NSE 05:30 | 01 Jan||Eastcoast Steel Ltd|
To the Members of
Eastcoast Steel Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Eastcoast Steel Limited("the Company") which comprise the Balance Sheet as at 31st March2020 the Statement of Profit and Loss including Other Comprehensive Income the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofsignificant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards ("Ind AS")specified under Section 133 of the Act and other accounting principles generally acceptedin India of the state of affairs of the Company as at 31st March 2020 itsloss including other comprehensive income its cash flows and the statement of changes inequity for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing ("SAs")specified under Section 143(10) of the Act. Our responsibilities under those Standards arefurther described in the Auditor's Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India (ICAI) togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the provisions of the Act and the Rules made thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the ICAIsCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion on the financial statements.
Material Uncertainty related to Going Concern
With reference to note no.36 of the accompanying financial statement the Company as at31st March 2020 has an outstanding borrowings of Rs.1452.70Lakhs and also has incurredcash losses over the years which has resulted in the negative net worth. These factorsmay indicate material uncertainty and cast significant doubt about the Company's abilityto continue as a going concern. The Company vide postal ballot result dated 13th July2019 has obtained the approval of the shareholders to monetize by sale/disposal/transferpart of the company's property the requisite funds could be mobilized to make good of thenegative net worth and repay its existing debt liability. Therefore the accounts arecontinued to be presented on going concern basis.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
We have determined that there are no key audit matters to communicate in our report forthe year ended 31st March 2020.
Information Other than the Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information; weare required to report that fact. We have nothing to report in this regard.
Management Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these Financial Statements that givea true and fair view of the financial position financial performance including othercomprehensive income cash flows and the statement of changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards ("Ind AS") specified under Section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provision of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofthe appropriate accounting policies; making judgements and estimates that are reasonableand prudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and fair presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of Directors are also responsible for overseeing the Company's financialreporting process.
Our objectives are to obtain reasonable assurance about whether the 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 a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud 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 financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statementswhether 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 the audit in order to designaudit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch 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 the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the 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 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 with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.
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 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 appears from our examination of those books;
c) The Balance Sheet Statement of Profit and Loss including Other ComprehensiveIncome the Cash Flow Statement and the Statement of Changes in Equity dealt with by thisreport are in agreement with the books of account;
d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act read with Companies (Indian Accounting Standards) Rules 2015as amended;
e) On the basis of written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified 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 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 controls overfinancial reporting;
g) In our opinion matter stated under Material uncertainty relating to going concernparagraph above may have an adverse effect on the functioning of the Company;
h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rules 11 of the Companies (Audit and Auditors) Rules 2014 as amended in our opinion and to the best of our information and according to the explanations givento us:
i. The Company does not have any pending litigations which would impact on itsfinancial position;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses and iii. There were no amount which wererequired to be transferred to the Investor Education and Protection Fund by the Company.
"ANNEXURE A" TO INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS OFEASTCOAST STEEL LIMITED
(Referred to in Paragraph 1 under the heading of "Report on Other Legal andRegulatory Requirements" of our report of even date)
i) In respect of its fixed assets :
a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information.
b. As explained to us all the fixed assets have been physically verified by themanagement in a phased periodical manner which in our opinion is reasonable havingregard to the size of the Company and nature of its assets. No material discrepancies werenoticed on such physical verification. c. In our opinion and according to the informationand explanations given to us title deeds of immovable properties are held in the name ofthe Company.
ii) In respect of its inventories: As the Company had no inventory during the yearclause (ii) of paragraph 3 of the Order is not applicable to the Company.
iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Act. Consequently the requirement of clause (iii) (a) to clause (iii)(c) of paragraph 3 of the Order is not applicable to the Company.
iv) Company has not directly or indirectly advanced loan to the persons or givenguarantees or securities in connection with the loan taken by persons covered underSection 185 of the Act. Company has complied with the provisions of Section 186 of theAct in respect of loans investments guarantee or security given.
v) According to the information and explanations given to us the Company has notaccepted any deposits within the meaning of provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the rules framed thereunder. Therefore the provisionsof clause (v) of paragraph 3 of the Order are not applicable to the Company.
vi) To the best of our knowledge and explanations given to us the Central Governmenthas not prescribed the maintenance of cost records under sub section (1) of Section 148 ofthe Act in respect of the activities undertaken by the Company. Accordingly the provisionof clause 3(vi) of the order is not applicable.
vii) In respect of Statutory dues :
a. According to the records of the Company undisputed statutory dues including goodsand services tax provident fund income-tax duty of customs value added tax cess andany other statutory dues as applicable to it have been regularly deposited withappropriate authorities. According to the information and explanations given to us noundisputed amounts payable in respect of the aforesaid dues were outstanding as at 31stMarch 2020 for a period of more than six months from the date of becoming payable.
b. On the basis of our examination of accounts and documents on records of the Companyand information and explanations given to us upon enquires in this regard there are nodisputed amounts payable in respect of goods and services tax provident fund income-taxsales-tax service tax duty of customs value added tax cess and any other statutorydues as applicable to it on account of any dispute which have not been deposited with theappropriate authorities.
viii) In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of loans to its financial institutions. The Companyhas not raised loans from banks or government or by issue of debentures.
ix) The money raised by term loans has been applied for the purpose for which they areraised. The Company has not raised money by way of initial public offer or further publicoffer (including debt instruments) during the year.
x) Based on the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and as per information and explanations given to usno fraud by the Company or on the Company by its officers or employees has been noticed orreported during the year.
xi) Company has not paid any managerial remuneration during the year and hence clause(xi) of paragraph 3 of the Order is not applicable to the Company.
xii) In our opinion Company is not a nidhi Company. Therefore the provisions of clause(xii) of paragraph 3 of the Order are not applicable to the Company.
xiii) In respect of transactions with related parties: In our opinion and according tothe information and explanations given to us all transactions with related parties are incompliance with Sections 177 and 188 of the Act and their details have been disclosed inthe financial statements etc. as required by the applicable Ind AS.
xiv) In our opinion and according to the information and explanations given to us theCompany has not made any preferential allotment or private placement of shares or of fullyor partly convertible debentures during the year and hence clause (xiv) of paragraph 3 ofthe Order is not applicable to the Company.
xv) In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transaction with the directors or personsconnected with him and covered under Section 192 of the Act. Hence clause (xv) of theparagraph 3 of the Order is not applicable to the Company.
xvi) Based on information and explanation given to us the Company is not required tobe registered under Section 45-IA of the Reserve Bank of India Act 1934.
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTSOF EASTCOAST STEEL LIMITED
(Referred to in paragraph 2 (f) under Report on Other Legal and RegulatoryRequirements' of our report of even date) Report on the Internal Financial Controls overFinancial Reporting under Clause (i) of subsection 3 of Section 143 of the Companies Act2013 ("the Act") We have audited the Internal Financial Control over financialreporting of Eastcoast Steel Limited ("the Company") as of 31stMarch 2020 in conjunction with our audit of the financial statements of the Company forthe year then ended.
Management Responsibility for the Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note issued by ICAI and the Standards on Auditing issued by ICAI anddeemed to be prescribed under Section 143(10) of the Act to the extent applicable to anaudit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the ICAI. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.
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 judgment including the assessment of the risks ofmaterial misstatement of 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 controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;
(2) 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
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent 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 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.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by theICAI.