You are here » Home » Companies ยป Company Overview » Electrosteel Castings Ltd

Electrosteel Castings Ltd.

BSE: 500128 Sector: Engineering
NSE: ELECTCAST ISIN Code: INE086A01029
BSE 00:00 | 02 Feb 35.65 -0.35
(-0.97%)
OPEN

36.30

HIGH

36.75

LOW

35.40

NSE 00:00 | 02 Feb 35.65 -0.25
(-0.70%)
OPEN

35.80

HIGH

36.80

LOW

35.30

OPEN 36.30
PREVIOUS CLOSE 36.00
VOLUME 62617
52-Week high 47.40
52-Week low 26.40
P/E 5.49
Mkt Cap.(Rs cr) 2,120
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 36.30
CLOSE 36.00
VOLUME 62617
52-Week high 47.40
52-Week low 26.40
P/E 5.49
Mkt Cap.(Rs cr) 2,120
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Electrosteel Castings Ltd. (ELECTCAST) - Auditors Report

Company auditors report

To The Members of

Electrosteel Castings Limited

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying standalone financial statements ofElectrosteel Castings Limited ("the Company") which comprise the Balance sheetas at March 31 2022 the statement of profit and loss (including other comprehensiveincome) the statement of cash flow and the statement of changes in equity for the yearthen ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information. (hereinafter referred to as the"standalone financial statement").

In our opinion and to the best of our information and according to theexplanations given to us except for the possible effects of the matter described in theBasis for Qualified Opinion paragraph the aforesaid standalone financial statements givethe information required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandard ) Rules 2015 as amended ( Ind As) and other accounting principles generallyaccepted in India of the state of affairs of the Company as at March 31 2022 its profitincluding other comprehensive income its cash flows and the changes in equity for theyear ended on that date.

Basis for Qualified Opinion

Attention is drawn to the following notes to the accompanyingstandalone financial statement:

a) Note no. 48 in respect to cancellation of coal block allotted to thecompany in earlier years and non-recognition of the claims receipt thereof &non-carrying of any adjustment in the books of accounts for the reasons stated in thenote. Pending finalisation of the matter & as the matter is sub judice disclosures asper Indian Accounting standard will be given effect on final settlement of the matter andthe balances appearing in the books of accounts in respect to such coal block have beencarried forward at their carrying cost and disclosed as capital work in progress propertyplant & equipment inventories and other heads of account. The impact andconsequential adjustment thereof are not presently ascertainable.

b) Note No. 8A.2 in respect to Company's investment amounting to Rs.8298.26 lakhs in Electrosteel Steels Limited (ESL) the pledge of which was invoked by thelenders of ESL and the same has been set aside by the Hon'ble High Court at Calcutta. Theplea of the company to release the pledge is pending before the Hon'ble High Court atCalcutta. Further the Land of Elavur plant of the Company which is mortgaged in favour ofa Lender of ESL who has assigned their rights to another entity and the symbolicpossession has been taken in the earlier years has been disputed by the company asenumerated in the note. Above exposures have been carried forward at their existingcarrying value & no impairment has been provided in respect to above and the impact ofwhich is not presently ascertainable.

Impacts with respect to (a) & (b) above are presently notascertainable and as such cannot be commented upon by us.

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs) as specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in the 'Auditors'Responsibilities for the Audit of the standalone financial statements' section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules there under and we have fulfilled our otherethical 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 qualified audit opinion on the standalone financial statements.

Emphasis of Matter

We draw attention to Note 63 of the accompanying standalone financialstatements in respect of the Scheme of Arrangement of Srikalahasthi Pipes Limited (SPL)with the Company as approved by the Hon'ble National Company Law Tribunal Cuttack Benchwherein the financial information has been restated from the appointed date in line withguidance of General Circular No. 09/2019 dated August 212019 as issued by Ministry ofCompany Affairs and not from the beginning of the earliest date presented as required inaccordance with guidelines of Appendix C of Ind AS 103.

Our Opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements for the yearended March 31 2022. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. In addition to the matters described inthe basis for qualified opinion section we have determined the matters described below asKey audit matters and for each matter our description of how our audit addressed thematter is provided in that context.

Key audit matters How our audit addressed the key audit matter
Provision for Taxation litigations and disclosures of contingent liabilities
The Company is exposed to different laws regulations and interpretations thereof. The company is also subject to number of significant claims and litigations. The assessment of the likelihood and quantum of any liability in respect of these matters can be judgmental due to the uncertainty inherent in their nature. Our audit procedures included among others:
I. Understanding and assessing the internal control environment relating to the identification recognition and measurement of provisions for disputes potential claims and litigation and contingent liabilities;
As on March 31 2022 the Company has carried forward non- current income tax liabilities of Rs. 6215.64 Lakhs [Refer Note 28 to the financial statements]. Further the Company has disclosed significant pending legal cases with respect to Kodilabad mines [Refer Note 49 to the financial statements] and other material contingent liabilities [Refer Note 54 to the financial statements]. II. Analyzed significant changes/ update from previous periods and obtained a detailed understanding of such items. Assessed recent judgments passed by the court authorities affecting such change;
III. Discussed the status of significant known actual and potential litigations with the management & noted that information placed before the board for such cases and
We considered this to be a key audit matter since the accounting and disclosure of claims and litigations is complex and judgmental and the amounts involved are or can be material to the financial statements. IV. Assessment of the management's assumptions and estimates related to the recognized provisions for disputes and disclosures of contingent liabilities in the financial statements.
Recoverability of Government Grant
The company has been entitled for various sales tax incentives under Industrial promotion scheme issued by the State Governments. The company had complied with the conditions of such scheme and incentives were accounted for in the books in earlier years. A sum of Rs. 5883.07 Lakhs (grouped under other financial assets in note no. 18) is outstanding against said incentive as on 31st March 2022. I. Evaluating eligibility requirements of schemes and compliances by the company.
II. Understanding and testing the design and operating effectiveness of controls as established by the management in recognition and assessment of the recoverability of the grant.
We determined this to be a matter of significance to our audit due to the quantum of the government grant outstanding compliance requirement of the scheme and also because of recovery pattern of the same. III. Considering the relevant notifications to ascertain the basis for determination completion of performance obligation and assessing the appropriateness of the management estimates for accounting of government grant and timing of recognition & past receipt of the grants.
Inventory measurement
The company deals with various types of bulk material & Finished goods such as ductile Iron pipes pipe fittings coal coke & Iron Ore etc. The total inventory of such materials amounts to Rs.165762.37 Lakhs as on March 31 2022. (refer note no. 12). I. Obtained the understanding of the management with regards to internal financial controls relating of Inventory management.
The measurement of these inventories involved certain estimations/assumption and also involved volumetric measurements. Measurement of some of these inventories also involved consideration of handling loss moisture loss/gain spillage etc. and thus required assistance of technical expertise. II. The company has deployed an independent agency for verification of bulk Materials in which our team were also present to oversee the process of entire materials being verified. We have also reviewed the internal verification process followed by the management for certain inventory items.
We determined this to be a matter of significance to our audit due to quantum of the amount & estimation involved. III. We have also reviewed the report submitted by external agency and obtained reasons/explanation for such differences and also confirmed the adjustment made by the company in accordance with the policy confirmed by the Board of Directors.

Information other than the Standalone Financial Statements andAuditor's Report thereon

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Annualreport for example Board's Report Report on Corporate Governance Management Discussion& Analysis Report etc. but does not include the standalone financial statements andour auditors' report thereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated. If based on the work we have performed on the other information that weobtained prior to the date of this auditor's report 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.

Responsibilities of Management and those charged with governance forthe standalone financial statements

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialStatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and 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 Act read with theCompanies (Indian Accounting Standards) 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 the 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 standalone financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial Statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditors' Responsibility for the Audit of the standalone financialstatements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditors' report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone 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 thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof 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 Companies Act 2013 we are also responsible for expressing ouropinion on whether the Company has adequate internal financial controls system in placeand 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 and based 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; and

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions 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 work; 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 standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2020("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Companies Act 2013 we give in the "Annexure A" astatement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.

2. Further to our comments in the annexure referred to in the paragraphabove 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 appears from our examination of those books;

c) The Balance Sheet the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Cash Flow and Statement of Changes in Equity dealtwith by this Report are in agreement with the relevant books of account;

d) Except for the possible effects of the matter described in the Basisfor Qualified Opinion paragraph in our opinion the aforesaid financial statements complywith the Indian Accounting Standards (Ind AS) specified under section 133 of the Act readwith Companies (Indian Accounting Standards) Rules 2015 as amended;

e) The matters described in the Basis for Qualified opinion paragraphabove in the event of being decided unfavorably in our opinion may have an adverseeffect on the functioning of the Company;

f) On the basis of the written representations received from thedirectors as on March 31 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2022 from being appointed as a director interms of section 164 (2) of the Act;

g) The qualification relating to the maintenance of accounts and othermatters connected therewith are as stated in the Basis for Qualified Opinion paragraphabove

h) With respect to the adequacy of the internal financial controls withreference to the standalone financial statements of the Company and the operatingeffectiveness of such controls refer to our separate Report in "Annexure B".Our report expresses an unmodified opinion on the adequacy and operating effectiveness ofthe Company's internal financial controls with reference to the standalone financialstatements;

i) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of the section 197(16) of the Act as amendedin our opinion and to the best of our information and according to the explanation givento us the managerial remuneration for the year ended March 31 2022 has been paid /provided by the Company to its directors in accordance with the provisions of section 197read with Schedule V to the Act;

j) With respect to the other matters to be included in the Auditor'sReport 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. Except for the matters dealt with in the Basis of Qualified Opinionparagraph impact whereof are presently not ascertainable impacts of pending litigations(other than those already recognized in the accounts) on the financial position of theCompany have been disclosed in the standalone financial statement as required in terms ofthe Ind AS and provisions of the Companies Act 2013 - Refer Note No. 54 to the standalonefinancial statements.

ii. The Company has made provision as required under the applicablelaw or Indian accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts - Refer Note no. 46 to the standalone financialstatements; and

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

iv. (a) The management has represented that to the best of it'sknowledge and belief as disclosed in the note no. 58 to the standalone financialstatements no funds have been advanced or loaned or invested (either from borrowed fundsor share premium or any other sources or kind of funds) by the company to or in any otherperson or entity including foreign entities ("Intermediaries") with theunderstanding whether recorded in writing or otherwise that the Intermediary shallwhether directly or indirectly lend or invest in other persons or entities identified inany manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries")or provide any guarantee security or the like on behalf of the Ultimate Beneficiaries;

(b) The management has represented that to the best of it's knowledgeand belief as disclosed in the note no. 58 to the financial statements no funds havebeen received by the company from any person or entity including foreign entities("Funding Parties") with the understanding whether recorded in writing orotherwise that the company shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theFunding Party ("Ultimate Beneficiaries") or provide any guarantee security orthe like on behalf of the Ultimate Beneficiaries; and

(c) Based on such audit procedures that we considered reasonable andappropriate in the circumstances nothing has come our notice that has caused us tobelieve that the representations under sub-clause (a) and (b) above contain any materialmis-statement.

v. The dividend declared or paid during the year by the Company is incompliance with section 123 of the Companies Act 2013.

vi. As stated in Note 22.8 to the financial statements the Board ofDirectors of the Company has proposed dividend for the year which is subject to theapproval of the members at the ensuing Annual General Meeting. The dividend proposed is inaccordance with section 123 of the Act as applicable.

ANNEXURE "A" TO THE AUDITORS' REPORT OF EVEN DATE

(Referred to in paragraph 1 under "Report on Other Legal andRegulatory Requirements" of our report of even date)

I. a. A. The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant and Equipmentexcept in case of furniture and fixture.

B. The Company has maintained proper records showing full particularsof intangible assets.

b. During the year Property Plant and Equipment have been physicallyverified by the management according to a programme of verification at regular intervalswhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets except in respect of fixed assets located at Parbatpur Coal Block forreasons stated in Note No. 48(a). As informed no material discrepancies were noticed onsuch verification.

c. According to the information and explanations given to us and on thebasis of our examination of the records of the Company the title deeds of immovableproperties (other than properties where the company is the lessee and the lease agreementsare duly executed in favour of the lessee) are held in the name of the Company except asdetailed below: (Refer Note no. 5.7 of the standalone financial statements)

Description of Property Gross carrying value (Amount Rs. In Lakhs) Held in the name of Whether promoter director or their relative or employee Property held since when Reason for not being held in the name of the Company
Freehold land 335.81 Various owners having small plots No Between 2008-09 to 2014-15 Refer note no. 48 to the financial statement.
Freehold land 1889.04 Mahadev Vyapaar Pvt. Ltd. No 01-04-2014 Transfer in the name of the company is in the process. Refer note no. 5.7 to the financial statement.
Freehold land 35150.37 Srikalahasthi Pipes Limited No 01-10-2020
Leasehold Land 360.15 Srikalahasthi Pipes Limited No 01-10-2020

d. The Company has not revalued its Property Plant and Equipment(including Right of Use assets) and intangible assets during the year.

e. According to information and explanations given to us and on thebasis of our examination of the records of the Company there are no proceedings initiatedor pending against the Company for holding any benami property under the Prohibition ofBenami Property Transactions Act 1988 and rules made thereunder.

II. a. As informed the inventories of the Company except for materialsin transit finished goods lying with third parties and inventories lying at ParbatpurCoal Block for reasons stated in Note no. 48(a) have been physically verified by themanagement at the reasonable intervals. In our opinion and according to the informationand explanations given to us the frequency of such verification is reasonable. For stockslying with third parties at the year-end written confirmations have been obtained and inrespect of goods-in-transit subsequent goods receipts have been verified or confirmationshave been obtained from the parties. The discrepancies noticed on physical verificationbetween the physical stocks and the books records were not in excess of 10% in theaggregate for each class of inventory and have been properly dealt with in the books asper the policy followed by the company.

b. As the Company's inventory of raw materials comprises mostly of bulkmaterials such as Coal Coke I ron ore Manganese ore etc. requiring technical expertisefor quantification the Company has hired an independent agency for the physicalverification of the stock of these materials. Considering the above in our opinion thecoverage and procedures for physical verification of inventories followed by themanagement are reasonable and adequate in relation to the size of the Company and thenature of its business.

c. According to the information and explanations given to us and on thebasis of our examination of the records of the Company the Company has been sanctionedworking capital limits in excess of five crore rupees in aggregate from banks orfinancial institutions on the basis of security of current assets. In our opinion thequarterly returns or statements filed by the Company with such banks or financialinstitutions are in agreement with the books of accounts of the Company for the respectivequarters.

III. The Company has advanced loan to four companies other than itssubsidiaries & joint ventures. The company has also advanced financial guarantees toits subsidiaries during the year.

a. In our opinion and according to the information and explanationsgiven to us the Company has not provided guarantee or security or granted any loans oradvances in the nature of loans secured or unsecured to companies firms limitedliability partnerships or any other parties during the year apart from the details givenbelow:

(Amount Rs. In Lakhs)

Particulars Guarantees Loans
Aggregate Amount granted/ provided during the year
: Subsidiaries 6471.95 -
: Others - 20000.00
Balance outstanding as at balance sheet date in respect of above cases
: Subsidiaries 6471.95 -
: Others - 5308.00

b. In our opinion and according to the information and explanationsgiven to us the terms and conditions of the granting of all the loans and guaranteesprovided during the year are prima facie not prejudicial to the company's interest;

c. In respect of loans granted during the year the schedule ofrepayment of principal and payment of interest has been stipulated and the repayments areregular;

d. In respect of loans granted by the company there is no overdueamount remaining outstanding at the Balance sheet date.

e. In our opinion no loans granted by the company that have fallen dueduring the year have been renewed or extended or fresh loan granted to settle the overdues of existing loans given to the same parties.

f. In our opinion and according to the information and explanationsgiven to us the company has not granted any loans which are either repayable on demand orwithout specifying any terms or period of repayment. Further company has not granted anyadvances in the nature of loans.

IV. In our opinion and according to the information and explanationsprovided to us the Company has not granted any loans or provided any guarantees orsecurity to the parties covered under Section 185 of the Act. The Company has compliedwith the provisions of Section 186 of the Act in respect of investments made or loans orguarantee or security provided to the parties covered under Section 186 of the Act.

V. The Company has not accepted any deposits or amounts which aredeemed to be deposits within the meaning of Sections 73 to 76 of the Act and the Companies(Acceptance of Deposits) Rules 2014 (as amended). Accordingly the provisions of clause3(v) of the Order are not applicable to the Company.

VI. We have broadly reviewed the books of account maintained by thecompany pursuant to the Rules made by the Central Government for the maintenance of costrecords under Section 148 (1) of the Act in respect of the Company's products to which thesaid rules are made applicable and are of the opinion that prima facie the prescribedrecords have been maintained. We have however not made a detailed examination of the saidrecords with a view to determine whether they are accurate or complete.

VII. According to the information and explanations given to us and onthe basis of our examination of the books of account:

a. The Company is generally regular in depositing with appropriateauthorities undisputed statutory dues including Provident fund Employees' StateInsurance Income-tax Sales- tax Service Tax Goods and Services tax Duty of customs Duty of excise Value Added Tax Cess and Other Statutory Dues applicable to it. In ouropinion no undisputed amounts payable in respect of Provident fund Employees' StateInsurance Income-tax Sales Tax Service Tax Goods and Service tax Duty of customsDuty of excise Value added tax Cess and Other Statutory Dues were outstanding at theyear end for a period of more than six months from the date they became payable.

b. Details of statutory dues referred to sub clause (a) above whichhave not been deposited as on March 31 2022 on account of any dispute are given below:

Name of the Statute Nature of Dues Amount (Rs. in lakhs) Period to which the Amount relates Forum where dispute is pending
Sales Tax Act Sales Tax/ VAT 0.25 2010-11 Commercial Taxes Tribunal Ranchi
4198.97 2007-09 2015-16 2017-18 West Bengal Appellate & Revisional Board
338.15 2013-15 Additional Commissioner Commercial Taxes West Bengal
60.61 2014-16 Joint Commissioner (Appeal) Sales Tax Dhanbad Circle Dhanbad
13.24 2009-10 Hon'ble Jharkhand High Court
1.62 2012-13 Deputy Commissioner Sales Tax Bokaro Circle Bokaro
829.63 2000-01 2003-06 Sales Tax Appellate Tribunal Hyderabad
214.91 2005-06 2011-12 2013-14 Sales Tax Appellate Tribunal Vishakhapatnam
427.28 2000-01 2010-11 2014-15 High Court of Andhra Pradesh
64.85 2012-13 Assistant Commissioner Chittor
169.39 2013-14 Appellate Dy. Commissioner Tirupati
Andhra Pradesh Tax on Entry of Goods into Local Area Act 2001. Entry Tax 221.66 2014-15 to 2017-18 Appellate Deputy Commissioner
West Bengal Tax on Entry of Goods into Local Area Act 2012. Entry Tax 8434.08 2011-12 to 2017-18 West Bengal Appellate & Revisional Board
Goods & Service Tax Act 2017 GST 62.24 Transitional Credit The Additional Commissioner- Audit Ranchi
18.44 2017-18 The Assistant Commissioner- CGST & CX Khardah division.
Goods & Service Tax Act 2017 GST 62.24 Transitional Credit The Additional Commissioner- Audit Ranchi
18.44 2017-18 The Assistant Commissioner- CGST & CX Khardah division.
Central Excise Act Excise Duty 11.86 2005-06 Customs Excise and Service Tax Appellate Tribunal Kolkata
10.77 2008-09 Additional Director General Director of Revenue Intelligence New Delhi
1910.34 2002-03 to 2004-05 2005-07 Commissioner of Goods & Service Tax & Central Excise
3.76 2014-16 Assistant Commissioner Central Tax- Tirupati
8.25 2007-09 CESTAT Hyderabad
51.34 2006-07 Office of the commissioner of Central Tax & Customs (A) Guntoor
Central Excise Act Service Tax 20.29 2004-05 to 2007-08 Hon'ble Madras High Court
470.84 2007-08 to 2011-16 Customs Excise and Service Tax Appellate Tribunal Kolkata
149.7 2006-2012 Commissioner of Central Excise Chennai II Commissionerate
377.76 2002-03 to 2006-07 CGST & Cx Khardah Division Kolkata North Commissionerate
1246.85 2016-17 Director General of G.S.T. Intelligence Zonal Unit Patna.
306.41 2006-07 to 2014-15 Commissioner of Central Tax- Tirupati
44.27 2007-08 2014-15 & 2015-16 Additional Commissioner of Central Tax - Tirupati
The Income Tax Act 1961 Income Tax 641.47 2017-18 & 2018-19 CIT (Appeals) Income Tax

VIII. According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has notsurrendered or disclosed any transactions previously unrecorded as income in the books ofaccount in the tax assessments under the Income Tax Act 1961 as income during the year.

IX. a. According to the information and explanations given to us and onthe basis of our examination of the records of the Company in our opinion the Companyhas not defaulted in repayment of loans and borrowings or in the payment of interestthereon to any lender during the year.

b. According to the information and explanations given to us and on thebasis of our audit procedures we report that the Company has not been declared WillfulDefaulter by any bank or financial institution or government or government authority.

c. In our opinion and according to the information and explanationsgiven to us by the management the term loans were applied for the purpose for which theloans were obtained.

d. According to the information and explanations given to us and on anoverall examination of the balance sheet of the Company we report that no funds raised onshort-term basis have been used for long-term purposes by the Company.

e. According to the information and explanations given to us and on anoverall examination of the standalone financial statements of the Company we report thatthe Company has not taken any funds from any entity or person on account of or to meet theobligations of its subsidiaries.

f. According to the information and explanations given to us andprocedures performed by us we report that the Company has not raised loans during theyear on the pledge of securities held in its subsidiaries.

X. a. In our opinion and according to the information and explanationsgiven to us the Company has not raised any moneys by way of initial public offer orfurther public offer (including debt instruments) during the year. Accordinglyclause3(x)(a) of the Order is not applicable to the Company.

b. The Company has not made any preferential allotment or privateplacement of shares or convertible debentures (fully partially or optionally convertible)during the year. Accordingly clause 3(x)(b) of the Order is not applicable.

XI. a. During the course of our examination of the books and records ofthe Company carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanation given to us we have neither comeacross any instance of material fraud by the Company or on the Company noticed orreported during the year nor have we been informed of any such case by the management.

b. During the course of our examination of the books and records of theCompany carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanation given to us a report underSection 143(12) of the Act in Form ADT-4 as prescribed under rule 13 of Companies (Auditand Auditors) Rules 2014 was not required to be filed with the Central Government.Accordingly the reporting under clause 3(xi)(b) of the Order is not applicable to theCompany.

c. As represented to us by the management there were no whistle blowercomplaints received by the Company during the year.

XII. In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi Company. Accordingly clause3(xii) of the Order isnot applicable to the Company.

XIII. According to the information and explanations given to us andbased on our examination of the records of the Company the 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 standalone financial statements asrequired by the applicable Indian accounting standards.

XIV. a. Based on information and explanations provided to us and ouraudit procedures in our opinion the Company has an internal audit system commensuratewith the size and nature of its business.

b. We have considered the internal audit reports of the Company issuedtill date for the period under audit.

XV. According to the information and explanations given to us and asrepresented to us by the management and based on our examination of the records of theCompany the Company has not entered into non-cash transactions with directors or personsconnected with him. Accordingly paragraph 3(xv) of the Order is not applicable.

XVI. a. The Company is not required to be registered under Section

45-IA of the Reserve Bank of India Act 1934. Accordingly thereporting under clause 3(xvi)(a) & (b) of the Order is not applicable to the Company.

b. The Company is not a Core Investment Company (CIC) as defined in theregulations made by the Reserve Bank of India. Accordingly reporting under clause3(xvi)(c) of the Order is not applicable to the Company.

c. Based on the information and explanations provided by the managementof the Company the Group does not have any CIC's which are part of the Group.Accordingly reporting under clause 3(xvi)(d) of the Order is not applicable to theCompany.

XVII. The Company has not incurred any cash losses in the current andin the immediately preceding financial year.

XVIII. There has been no resignation of the statutory auditors duringthe year. Accordingly reporting under clause 3(xviii) of the Order is not applicable.

XIX. According to the information and explanations given to us and onthe basis of the financial ratios (refer note - 56 to the standalone financialstatements) ageing and expected dates of realization of financial assets and payment offinancial liabilities other information accompanying the standalone financial statementsour knowledge of the Board of Directors and management plans and based on our examinationof the evidence supporting the assumptions nothing has come to our attention whichcauses us to believe that any material uncertainty exists as on the date of the auditreport that the Company is not capable of meeting its liabilities existing at the date ofbalance sheet as and when they fall due within a period of one year from the balance sheetdate. We however state that this is not an assurance as to the future viability of theCompany. We further state that our reporting is based on the facts up to the date of theaudit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the balance sheet date will get dischargedby the Company as and when they fall due.

XX. In our opinion and according to the information and explanationsgiven to us there is no unspent amount under sub-section (5) of Section 135 of the Actpursuant to any project. Accordingly clauses 3(xx)(a) and 3(xx)(b) of the Order are notapplicable.

ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph (h) under 'Report on Other Legal andRegulatory Requirements' of our report of even date)

Report on the Internal Financial Controls with reference to theaforesaid standalone financial statements under Clause (i) of Subsection 3 of Section 143of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to thestandalone financial statements of Electrosteel Castings Limited ("the Company")as of March 31 2022 in conjunction with our audit of the standalone financial statementsof the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control with reference tothe standalone financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India. 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 Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to the standalone financial statements based on ouraudit. We conducted our audit in accordance with the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting (the "Guidance Note") issued by theInstitute of Chartered Accountants of India and the Standards on Auditing prescribed underSection 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls with reference to the standalonefinancial statements was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system with reference to the standalonefinancial statements and their operating effectiveness. Our audit of internal financialcontrols with reference to the standalone financial statements included obtaining anunderstanding of internal financial controls with reference to the aforesaid standalonefinancial statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system with reference to the standalone financial statements.

Meaning of Internal Financial Controls with reference to the standalonefinancial statements

A company's internal financial control with reference to the standalonefinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of standalone financial statementsfor external purposes in accordance with generally accepted accounting principles. Acompany's internal financial control with reference to the standalone financial statementsincludes those policies and procedures that (1) pertain to the maintenance of recordsthat in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls with reference tothe standalone financial statements

Because of the inherent limitations of internal financial controls withreference to the standalone financial statements including the possibility of collusionor improper management override of controls material misstatements due to error or fraudmay occur and not be detected. Also projections of any evaluation of the internalfinancial controls with reference to the standalone financial statements to future periodsare subject to the risk that the internal financial control with reference to thestandalone financial statements may become inadequate because of changes in conditions orthat the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system with reference to the standalone financial statements and suchinternal financial controls with reference to the standalone financial statements wereoperating effectively as at March 31 2022 based on the internal control with referenceto the standalone financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Singhi & Co. Chartered Accountants Firm Registration No. : 302049E
(Gopal Jain) Partner
Place : Kolkata Membership No. : 059147
Date : May 10 2022 UDIN: 22059147AISASQ7050

.