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Inertia Steel Ltd.

BSE: 512025 Sector: Others
NSE: N.A. ISIN Code: INE767M01011
BSE 05:30 | 01 Jan Inertia Steel Ltd
NSE 05:30 | 01 Jan Inertia Steel Ltd

Inertia Steel Ltd. (INERTIASTEEL) - Auditors Report

Company auditors report

To

The Members of

Inertia Steel Limited

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying Financial Statements of INERTIA STEEL LIMITED ("theCompany") which comprise the Balance Sheet as at 3151 March 2019 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and statement of Cash Flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information (hereinafter referred to as "the Financial Statements").

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 accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2019 and its Profit includingother comprehensive income changes in equity and its cash flows for the year ended onthat date.

Basis for Opinion

We conducted our audit in accordance with Standards on Auditing (SAs) specified undersection 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theethical requirements that are relevant to our audit of the Financial Statements under theprovisions of the Act and the rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our qualified opinion.

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 year. 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.

Key Audit Matter How our audit addressed the key audit matter
1) Revenue Recognition
Our audit procedure included among others:
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured regardless of when the proceeds are being received. Revenue is measured at the fair value of the consideration received or receivable taking into account contractually defined terms of payment and excluding taxes and duties collected on behalf of the Government. • Assessing the Company's processes and controls for recognizing revenue as part of our audit. Our audit approach included testing of the controls and substantive audit procedures including:
Revenue from sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer recovery of the consideration is probable the associated cost can be estimated reliably there is no continuing effective control or managerial involvement with the goods and the amount of revenue can be measured reliably. - Performing detailed transaction testing by checking of individual revenue items from order to sales invoices and subsequent cash receipt;
Revenue from sale of services is recognised as per the terms of the contract with buyer based on stage of completion when the outcome of the transactions involving rendering of services can be estimated reliably. - Performing sales cut-off testing immediately before and after the year end by testing sales invoices to completion of work to ensure that revenue had been recognised in the correct accounting period;
Percentage of completion method requires the Company to estimate the services performed to date as a proportion of the total services to be performed. With regard to the expected impact of the initial application of Ind AS 115 from the financial year 2018 onward our audit approach included among other items:
Additionally new revenue accounting standard contains disclosures which involve collection of information in respect of disaggregated revenue. • Assessing the process to identify the impact of adoption of the new revenue accounting standards.
Accordingly it has been determined as a key audit matter. • Verifying the completeness of disclosure in the Financial Statements as per Ind AS 115.
Refer Note no. 1(C)(VI) and 10 to the Financial Statements.

Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the management discussion & analysis and director's reportincluded in the annual report but does not include the Financial Statements and ourauditor'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 have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Financial Statements

The Company's Board of Directors 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 state of affairs (financial position) profit (financialperformance including other comprehensive income) cash flows and the statement of changesin equity of the Company in accordance with the accounting principles generally acceptedin India including Indian Accounting Standards (‘Ind AS') prescribed under Section133 of the Act read with relevant rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Financial Statements that give a true and fair view and are free from materialmisstatement whether due 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.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditors' Responsibility for the audit of the Financial Statements

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

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3) (i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the ability ofthe Company to continue as a going concern. If we conclude that a material uncertaintyexists we are required to draw attention in our auditor's report to the relateddisclosures in the Financial Statements or if such disclosures are inadequate to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date ofour auditor's report. However future events or conditions may cause the Company to ceaseto continue as a going concern.

• Evaluate the overall presentation structure and content of the FinancialStatements including the disclosures and whether the Financial Statements represent theunderlying transactions and events in a manner that achieves fair presentation.

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 year 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 Section 143 (3) of the Act we report that:

a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

b. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

c. The Balance Sheet the Statement of Profit and Loss (Including 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 Indian AccountingStandards prescribed under Section 133 of the Act read with relevant rules thereunder;

e. On the basis of the written representations received from the directors as on 31stMarch 2019 and taken on record by the Board of Directors none of the directors isdisqualified as on 31s' March 2019 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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A".

g. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us the Company has not paid any remuneration to its directors during the year.

h. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company does not have any pending litigations which would impact its financialposition.

ii. The Company did not have any long -term contracts including derivative contractsfor which there were any material foreseeable losses;

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

2. As required by the Companies (Auditor's Report) Order 2016 (the Order) issued bythe Central Government of India in terms of Section 143(11) of the Act we give in "AnnexureB" hereto a statement on the matters specified in paragraphs 3 and 4 of theOrder.

FOR AGRAWAL CHHALLANI AND CO.
CHARTERED ACCOUNTANTS.
Nagpur
28th May 2019
(S.R. Chhallani)
PARTNER
Membership No. 30154.

"ANNEXURE A" TO INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 (f) under ‘Report on Other Legal and RegulatoryRequirements' of our report of even date to the members of Inertia Steel Limited on thefinancial statements for the year ended 31st March 2019)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSubsection 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of InertiaSteel Limited ("the Company") as of 31st March 2019 inconjunction with our audit of the financial statements of the Company for the year endedon that date.

Management's Responsibility for 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.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 internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note and the Standards on Auditing prescribed under Section 143(10) ofthe Act to the extent applicable to an audit of internal financial controls both issuedby the Institute of Chartered Accountants of India. 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 over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's 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 ofrecords that 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 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.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31s' March 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note.

FOR AGRAWAL CHHALLANI AND CO.
CHARTERED ACCOUNTANTS.
(Nagpur) (Registration Number: 100125W)
28th May 2019 J
(S.R. Chhallani)
PARTNER
Membership No. 30154

"ANNEXURE B" TO INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2 under the heading "Report on Other Legal andRegulatory

Requirements" of our report of even date to the members of Inertia Steel Limitedon the financial statements for the year ended 31st March 2019)

i. The Company does not have any Fixed Assets hence clause (i) of paragraph 3 of theOrder is not applicable to the Company.

ii. The Company does not have any Inventory hence clause (ii) of paragraph 3 of theOrder is not applicable to the Company.

iii. According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company has not granted any loans secured orunsecured to companies firms Limited Liability Partnerships or other parties covered inthe register maintained under section 189 of the Companies Act 2013.

iv. The Company has not made any investments and not given any loans guarantees orsecurities during the year. Therefore the provisions of Clause (iv) of paragraph 3 of theOrder are not applicable to the Company.

v. According to the information and explanations given to us the Company has notaccepted any deposit from the public. Therefore the provisions of Clause (v) of paragraph3 of the Order are not applicable to the Company for the year under audit.

vi. The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act.

vii. According to the information and explanations given to us in respect of statutorydues:

a. The company has generally been regular in depositing undisputed statutory duesincluding Income tax Sales tax Service tax Goods and Service Tax and any otherstatutory dues with the appropriate authorities during the year. According to theinformation and explanations given to us no undisputed amounts payable in respect of suchstatutory dues were outstanding as at 31st March 2019 for a period of more than sixmonths from the date they became payable.

b. According to the information and explanations given to us there are no suchstatutory dues which have not been deposited on account of any dispute.

viii. The Company does not have any borrowings from any Financial Institution BanksGovernment or debenture holder during the year. Hence clause (viii) of paragraph 3 of theOrder is not applicable to the Company.

ix. According to the information and explanations given to us during the year theCompany has not raised any money by way of initial public offer or further public offer(including debt instruments). The Company has not raised any fresh term loans during theyear.

x. Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and on the basis of information and explanationsgiven by the management no fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the year.

xi. The Company has not paid or provided any managerial remuneration during the yearhence clause (xi) of paragraph 3 of the Order is not applicable to the Company.

xii. In our opinion the Company is not a Nidhi Company. Therefore the provisions ofClause (xii) of paragraph 3 of the Order are not applicable to the Company.

xiii. According to the information and explanations given to us all transactions withthe related parties are in compliance with sections 177 and 188 of the Act whereapplicable and details of such transactions have been disclosed in the financialstatements as required by the applicable Indian accounting standards.

xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company during the year the company has not raised anymoney by preferential allotment or private placement of shares or debentures. Thereforethe provisions of Clause (xiv) of paragraph 3 of the Order are not applicable to theCompany.

xv. According to the information and explanations given to us during the year thecompany has not entered into any non-cash transactions with directors or persons connectedwith him. Therefore the provisions of Clause (xv) of paragraph 3 of the Order are notapplicable to the Company.

xvi. In our opinion and according to information and explanations provided to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.

FOR AGRAWAL CHHALLANI AND CO.
CHARTERED ACCOUNTANTS.
Nagpur (Registration Numbet :- 100125W)
28th May 2019
(S.R. Chhallani)
PARTNER.
Membership No. 30154.

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