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Inducto Steel Ltd.

BSE: 532001 Sector: Others
NSE: N.A. ISIN Code: INE146H01018
BSE 00:00 | 04 Oct 41.30 0
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NSE 05:30 | 01 Jan Inducto Steel Ltd
OPEN 41.95
PREVIOUS CLOSE 41.30
VOLUME 708
52-Week high 43.90
52-Week low 20.45
P/E 34.42
Mkt Cap.(Rs cr) 17
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 41.95
CLOSE 41.30
VOLUME 708
52-Week high 43.90
52-Week low 20.45
P/E 34.42
Mkt Cap.(Rs cr) 17
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Inducto Steel Ltd. (INDUCTOSTEEL) - Auditors Report

Company auditors report

To the members of Inducto Steel Limited

Report on the audit of the standalone financial statements

Opinion

We have audited the accompanying standalone financial statements of InductoSteel Limited ("the Company") which comprises the Balance Sheet as at March31 2021 the Statement of Profit and Loss (including Other Comprehensive Income)statement of changes in equity and statement of cash flow for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information (hereinafter referred as "the Standalone FinancialStatements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Financial Statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2021and total comprehensive income (comprising of profit and other comprehensive income)changes in equity and its cash flows for the year ended.

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 thoseStandards are further described in the Auditor's Responsibilities for the Audit ofthe Standalone Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India together with the ethical requirements that are relevant to our auditof the standalone financial statements under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

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 of thecurrent period. These matters were addressed in the context of our audit of the StandaloneFinancial Statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Key Audit Matter Auditor's Response
Evaluation of uncertain tax positions
The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Our audit procedures included among others the following:
• Obtained details of completed tax assessments and demands for the year ended March 31 2021 from management.
• Obtained understanding of key uncertain tax positions.
• Discussed with appropriate senior management and evaluated management's underlying key assumptions in estimating the tax provisions.
• Assessed management's estimates of the possible outcome of the disputed cases.

Information Other than the Standalone Financial Statements andAuditor's Report Thereon

The Company's management and Board of Directors is responsible forthe other information. The other information comprises the information included in theAnnual Report but does not include the Standalone Financial Statements and ourauditor's 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 Standalone Financial Statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated. If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Responsibility of Management and those charged with governance for theStandalone Financial Statements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these StandaloneFinancial Statements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate implementation and maintenance ofaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS 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 concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. Those Board of Directors arealso responsible for overseeing the company's financial reporting process.

Auditor's 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 auditor's 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 financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls with referenceto Standalone Financial Statements in place and the operating effectiveness of suchcontrols.

• 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 thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the Standalone Financial Statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

• 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.

We communicate with those charged with governance regarding 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 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 precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so 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 2016("the Order") issued by theCentral Government of India in terms of sub-section(11) of section 143 of the Act we give in the Annexure - A statement on the mattersspecified in the paragraph 3 and 4 of the Order to the extent applicable.

2. As required by Section 143 (3) of the Act we report that:

a. we have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b. in our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books;

c. the balance sheet the statement of profit and loss (including othercomprehensive income) the statement of changes in equity and the cash flow statementdealt with by this Report are in agreement with the books of account;

d. in our opinion and except for the effects of our qualified opinionthe aforesaid Standalone Financial Statements comply with the Accounting Standardsspecified under Section 133 of the Act.

e. on the basis of the written representations received from thedirectors as on March 31 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2021 from being appointed as a director in termsof Section 164 (2) of the Act;

f. with respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B" to this report; and

g. with respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:

i. the Company has disclosed impact of pending litigations which couldmaterially impact its financial statements - Refer Note 3.8 of the Standalone FinancialStatements;

ii. the Company did not have any long term contracts includingderivative contracts for which there were any material foreseeable losses;

iii. there has been no amounts which were required to be transferredto the Investor Education and Protection Fund by the Company.

h. In our opinion and according to the information and explanationsgiven to us the remuneration paid by the Company to its directors during the current yearis in accordance with the provisions of Section 197 of the Act. The remuneration paid toany director is not in excess of the limit laid down under Section 197 of the Act.

For Lahoti Navneet & Co. For P. D. Goplani & Associates
Chartered Accountants Chartered Accountants
FRN : 116870W FRN : 118023W
CA Sanjay Soni CA Sonam Langalia
Partner Partner
M. No. 114835 M. No. 154014
UDIN : 21114835AAAAGS2421 UDIN : 21154014AAAABL4632
Mumbai
June 30 2021

Annexure A to the Independent Auditors' Report

The Annexure referred to in our Independent Auditors' Report tothe members of the Company on the Standalone Financial Statements for the year ended March31 2021 we report that:

i) a) The Company has maintained proper records showing the fullparticulars including the quantitative details and situation of its fixed assets.

b) All the assets have not been physically verified by the managementduring the year but as per the information and explanations provided to us there is aregular programme of physical verification which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. Pursuant to the programmea portion of the fixed assets has been physically verified by the management and nomaterial discrepancies have been noticed on such physical verification.

c) According to information and explanations given to us by themanagement the title deeds of immovable properties as disclosed in Note 1.1 on propertyplant and equipment to the standalone financial statements are held in the name of theCompany except for :

1. Title deeds of land with gross and net carrying amount ofRs.166257/- and title deeds of factory shed and buildings with gross carrying amount andnet carrying amount of Rs.2896148/- and Rs.590803/- respectively are held in the nameof erstwhile merging companies namely Hariyana Industrial Gases Private Limited andInducto Techno Castings Private Limited since 31.03.2006.

We were given to understand that the said immovable properties wereowned and acquired by the company in the scheme of merger however the title deeds of thesame are still in the name of erstwhile merging companies.

2. In case of Green Plot Development (Alang) the company has doneredevelopment work on a lease hold plot at Alang (Alang Ship Breaking Yard Alang).

ii) The physical verification of inventory has been conducted atreasonable intervals by the management during the year. In our opinion the frequency ofverification is reasonable and no material discrepancies were noticed on such physicalverification. However as regards stock of raw materials the company is mainly engaged inship breaking activities and old and used ships are its main raw materials. Ascertainingactual weight of ship at the time of purchase and thereafter; is not possible due to itsnature and size loss of weight on account of corrosion and other factors during the usageof the ship and its voyage for long period of the years. Inventory of raw materials at theend of the year is ascertained by reducing the weight of the scrap sold together with theestimated wastage of the material.

iii) According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under section189 of the Companies Act 2013. Accordingly the provisions of clause 3(iii)(a) (b) and(c) of the Order are not applicable to the Company and hence not commented upon.

iv) In our opinion and according to the information and explanationsgiven to us the company has complied with the provisions of section 185 and 186 of theCompanies Act 2013 in respect of the loans and investments made and guarantees andsecurity provided by it as applicable.

v) According to the information and explanations given to us thecompany has not accepted any deposits from the public within the meaning of sections 73 to76 of the act and the rules framed there under to the extent notified.

vi) Pursuant to the rules made by the Central Government of India thecompany is required to maintain cost records as specified under section 148(1) of the actin respect of its products. We have broadly reviewed the same and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained. Wehave not however made a detailed examination of the records with a view to determinewhether they are accurate complete.

vii) a) In our opinion and according to the information andexplanations given to us the Company is generally regular in depositing undisputedstatutory dues including provident fund employees' state insurance income-taxsales-tax service tax duty of customs duty of excise value added tax cess goods andservice tax and other material statutory dues as applicable with the appropriateauthorities and no such undisputed amounts were in arrears for a period of more than sixmonths from the date they became payable.

b) According to the information and explanations given to us and therecords of the Company examined by us the particulars of dues of income-tax sales-taxwealth-tax service tax duty of customs duty of excise value added tax cess goods andservice tax as at March 31 2021 which have not been deposited on account of any disputeare as follows:

Name of the authority (where the dispute is pending) Related period Nature Amount
Hon. CIT (A) 8 Mumbai AY 2014-15 Income Tax Rs. 24566390
Hon. ITAT "I" Bench Mumbai AY 2012-13 Income Tax Rs. 4219940

viii) In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in repayment of loans or borrowings to any bankor financial institution. The Company has not taken any loan from government.

ix) The company has not raised moneys by way of initial public offer orfurther public offer (including debt instruments) or tern loan during the year underreport.

x) 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 explanations given to us we have neither comeacross any instance of material fraud by the Company or on the Company by its officers oremployees noticed or reported during the year nor have we been informed of any such caseby the Management.

xi) The Company has paid/ provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act.

xii) As the Company is not a Nidhi Company and the Nidhi Rules 2014are not applicable to it the provisions of Clause 3(xii) of the Order are not applicableto the Company.

xiii) According to the information and explanations given to us by themanagement the Company has entered into transactions with related parties in compliancewith the provisions of Sections 177 and 188 of the Act. The details of related partytransactions have been disclosed in the standalone financial statements as required underIndian Accounting Standard (Ind AS) 24 Related Party Disclosures specified under Section133 of the Act.

xiv) According to the information and explanations given by themanagement and based on the examinations of the records of the company the company hasnot made any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review. Accordingly the provisions of Clause3(xiv) of the Order are not applicable to the Company.

xv) In our opinion and according to the information and explanationsgiven to us by the management he Company has not entered into any non-cash transactionswith its directors or persons connected with him. Accordingly the provisions of Clause3(xv) of the Order are not applicable to the Company.

xvi) According to the information and explanations given to us by themanagement the Company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Orderare not applicable to the Company.

For Lahoti Navneet & Co. For P. D. Goplani & Associates
Chartered Accountants Chartered Accountants
FRN : 116870W FRN : 118023W
CA Sanjay Soni CA Sonam Langalia
Partner Partner
M. No. 114835 M. No. 154014
UDIN : 21114835AAAAGS2421 UDIN : 21154014AAAABL4632
Mumbai
June 30 2021

Annexure B to the Independent Auditors' Report

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference tofinancial statements of Inducto Steel Limited ("the Company") as of March31 2021 in conjunction with our audit of the Standalone Financial Statements of theCompany 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 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 (ICAI).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to standalone financial statements based on our audit.We conducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") and the Standards onAuditing deemed to be prescribed under section 143(10) of the Act to the extent applicableto an audit of internal financial controls both applicable to an audit of internalfinancial controls and both issued by the ICAI. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial 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 financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to standalone financial statements included obtaining an understanding ofinternal financial controls with reference to financial statements assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone financial statements whether due to 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 internalfinancial controls system with reference to standalone financial statements.

Meaning of Internal Financial Controls with reference to financialstatements

A company's internal financial controls with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to financial statements includes those policies andprocedures that

(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorization of management and directors of thecompany; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference tofinancial statements

Because of the inherent limitations of internal financial controls withreference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial control controls with reference to financial statements maybecome inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system with reference to standalone financial statements andsuch internal financial controls with reference to standalone financial statements wereoperating effectively as at March 31 2021 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 Lahoti Navneet & Co. For P. D. Goplani & Associates
Chartered Accountants Chartered Accountants
FRN : 116870W FRN : 118023W
CA Sanjay Soni CA Sonam Langalia
Partner Partner
M. No. 114835 M. No. 154014
UDIN : 21114835AAAAGS2421 UDIN : 21154014AAAABL4632
Mumbai
June 30 2021

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