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Kanishk Steel Industries Ltd.

BSE: 513456 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE791E01018
BSE 00:00 | 28 Sep 19.70 0.10
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NSE 05:30 | 01 Jan Kanishk Steel Industries Ltd
OPEN 20.50
PREVIOUS CLOSE 19.60
VOLUME 3079
52-Week high 25.50
52-Week low 4.94
P/E 4.80
Mkt Cap.(Rs cr) 56
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 20.50
CLOSE 19.60
VOLUME 3079
52-Week high 25.50
52-Week low 4.94
P/E 4.80
Mkt Cap.(Rs cr) 56
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kanishk Steel Industries Ltd. (KANISHKSTEEL) - Auditors Report

Company auditors report

To the Members of Kanishk Steel Industries Limited

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying standalone ind AS Financial statementsof Kanishk Steel industries Limited(the 'Company') which comprise the BalanceSheet as at 31st March 2020 the Statement of Profit and Loss (including OtherComprehensive income) the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and notes to the Financial statements including a summary of thesignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone ind AS 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 including indian Accounting Standards ('ind AS')specified under Section 133 of the Act of the state of affairs of the Company as at 31 stMarch 2020 and its profit including other comprehensive income its cash flows and thechanges in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone ind AS financial statements inaccordance with the Standards on Auditing specified under Section 143(10) of the Act. OurResponsibilities under those standards are further described in the Auditor'sResponsibilities for the Audit of the standalone ind AS Financial Statements section ofour report. We are independent of the Company in accordance with the Code of Ethics issuedby 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 Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion on the standalone Ind AS financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone Ind AS financial statements forthe financial year ended 31st March 2020. These matters were addressed In the context ofour audit of the standalone Ind AS financial statements as a whole and in forming ouropinion thereon and we do not provide a separate opinion on these matters. For eachmatter below our description of how our audit addressed the matter is provided in thatcontext.

We have determined the matters described below to be the key auditmatters to be communicated in our report. We have fulfilled the responsibilities describedin the Auditor's responsibilities for the audit of the standalone Ind AS financialstatements section of our report including in relation to these matters. Accordingly ouraudit included the performance of procedures designed to respond to our assessment of therisks of material misstatement of the standalone ind AS financial statements. The resultsof our audit procedures including the procedures performed to address the matters belowprovide the basis for our audit opinion on the accompanying standalone ind AS financialstatements:

Key Audit Matters How the matter was addressed in our Audit
Verification of Inventory and Valuation thereof The total inventory of the Company amounting to Rs. 477387084 (as on March 31 2020) forms about 40.59% of the total assets of the Company. Our Audit procedures based on which we arrived at the conclusion regarding reasonableness of determination of year-end Inventory and valuation thereof include the following:
This includes bulk materials such as MS Scrap billets. Steel Scrap etc which are susceptible to handling loss spillage etc. and determination of the same requires estimation based on experience and technical expertise. Also the physical verification of the Inventories could not be carried out and/or observed by us due to lockdown restrictions at the year end. We have applied alternative methods of verification for arriving at Inventories as at the year-end by applying roll back principles and carrying out relevant adjustments for receipt and issues. Materiality for variations discrepancies after considering the reasonable allowance for volumetric measurement were duly adjusted with respect to subsequent movements and discrepancies and adjustments pursuant to last such verification carried out.
While necessary review and other corroborative evidences were obtained and verified professional expert's report and conclusions drawn by them on the matter
We have verified the adjustments made for receipt and consumption to arrive at the physical stock as on March 312020; and
We examined the valuation process / methodology and checks being performed at multiple levels to ensure that the valuation is consistent with and asper the policy followed in this respect.

Emphasis of Matter

We draw attention to Note 5 (a) to the Statement which explains theextent to which COVID-19 pandemic will impact the Company's operations and financialresults which are dependent on uncertain future developments. Our opinion is not modifiedIn respect of this matter.

Other Matter:

Due to the COVID-19 related lockdowns we undertook online verificationof the documents / records / statements on the basis of the assurance given by themanagement about the accuracy and authenticity of the same. We have performed alternateprocedures of audit as per the guidance provided in SA501 "Audit Evidence-SpecificConsiderations for selected Items" and have obtained sufficient appropriate auditevidence to issue our unmodified opinion on these ind AS Financial statements.

Information Other than the Standalone Financial Statements andAuditors' Report Thereon

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Board'sReport including Annexures to Board's Report and Management Discussion and AnalysisReport but does not include the standalone Financial statements and our 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 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.

Responsibilities of Management for the Standalone Ind AS FinancialStatements

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 standaloneind AS Financial statements that give a true and fair view of the state of affairs(Financial position) profit or loss (Financial performance including other comprehensiveincome) changes in equity and cash flows of the Company in accordance with the accountingprinciples generally accepted in india including the Ind AS specified under Section 133of the Act read with Companies (Indian Accounting Standards) Rules 2015 as amended. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting 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 Financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone Ind AS 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 arealso responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of standalone Ind ASfinancial statements:

Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with Standards on Auditing 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 Ind AS financialstatements.

As part of an audit in accordance with Standards on Auditing weexercise professional judgment and maintain professional skepticism throughout the audit.We also:

• Identify and assess the risks of material misstatement of thestandalone Ind AS financial statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate 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 Act we are also responsible for explaining our opinion onwhether the Company has adequate internal financial controls system in place and theoperating 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 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 financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

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

Materiality is the magnitude of misstatements in the financialstatements that individually or in aggregate makes it probable that the economicdecisions 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 standalone IndAS financial statements for the financial year ended 31st March 2020and are therefore thekey audit matters. We describe these matters in our auditor's report unless law orregulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016(the 'Order') issued by the Central Government of India in terms of Section143(11) of the Act we give in the Annexure A a statement on the matters specified inparagraphs 3 and 4 of the Order.

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

a) we have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purpose of our audit;

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 cash flow statement and the statement of changes in equity dealtwith by this report are in agreement with the books of account;

d) in our opinion the aforesaid standalone financial statements complywith Ind AS specified under Section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 as amended;

e) on the basis of the written representations received from thedirectors and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of Section164(2) of the Act;

f) with respect to the adequacy of the internal financial controls overfinancial reporting of the company with reference these standalone Ind AS financialstatements and the operating effectiveness of such controls refer to our report as per"Annexure B" to this report;

g) In our opinion the managerial remuneration for the year ended 31stMarch 2020 has been paid/ provided by the company to its directors in accordance with theprovisions of section 197 read with Schedule V to the Act;

h) 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 (as amended) in our opinion and to the best of our information and accordingto the explanations given to us:

I. The Company has disclosed the Impact of pending litigations on itsfinancial position in its standalone ind AS financial statements - Refer Note 34to thestandalone Ind AS financial statements

ii. the Company has made provision as required under the applicablelaw or Ind AS for material foreseeable losses. If any on long-term contracts includingderivative contracts;

iii. there has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company during the yearended 31 st March 2020;

Annexure A to the Independent Auditor's Report of even date to themembers of Kanishk Steel Industries Limited on the standalone ind AS financial statementsfor the year ended 31st March 2020

Annexure A

Based on the audit procedures performed for the purpose of reporting atrue and fair view on the standalone financial statements of the Company and taking intoconsideration the information and explanations given to us and the books of account andother records examined by us in the normal course of audit and to the best of ourknowledge and belief we report that:

(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of property plant andequipment.

(b) Ail property plant and equipment have not been physically verifiedby the management during the year but there is a regular programme of verification whichin our opinion is reasonable having regard to the size of the company and the nature ofits assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanation given to us and therecords examined by us and based on examination of the registered sale deed / transferdeed/ conveyance deed provided to us we report that title deed of free hold land are heldin the name of the company as at the balance sheet date. In respect of immovable propertyof land that have been taken on lease and disclosed as property plant and equipment in thefinancial statements the lease agreements are in the name of the company where thecompany is lessee in the agreement.

(ii) On account of COVID-19 related lockdown restrictions as explainedto us the management could not conduct the year-end physical verification of Inventoryand has arrived at the quantity and value as per the regular records maintained by themalso depending on the periodical physical verification of Inventories conducted during theyear at reasonable intervals during which no material discrepancy was observed by them.

(iii) As per the information and explanation given to us and as per therecords produced to us the Company has not granted any secured or unsecured loans tocompanies firms or other parties covered in the register maintained under section 89 ofthe Companies Act 2013 {'the Act'). Accordingly the provisions of clauses(iii) (a) to (c)of the Order are not applicable to the Company and hence not commentedupon.

(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 with respect of loans and investments and providing guarantees andsecurities as applicable.

(v) According to the information and explanation given to us theCompany has not accepted any deposits from the public to which the directives issued bythe Reserve Bank of India and the provisions of section 73 to 76 or any other relevantprovisions of the act and the Companies(Acceptance of Deposits) Rule 2014 as amendedwould apply. Accordingly paragraph 3(v) Is 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 sub- section (1) of Section 148 of the Act in respect of Company'sproducts and services and are of the opinion that prima facie the prescribed accountsand records have been made and maintained. However we have not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

(vii) (a) The Company is regular in depositing undisputed statutorydues including provident fund employees' state insurance income-tax duty ofcustoms goods and service tax cess and other material statutory dues as applicablewith the appropriate authorities. Further no undisputed amounts payable in respectthereof were outstanding at the year- end for a period of more than six months from thedate they became payable.

(b) The dues outstanding in respect of income-tax sales tax duty ofcustoms duty of excise and value added tax on account of any dispute are as follows:

Statute Name Nature of dues Amount in Rs. Forum where dispute is pending
Central Excise Law Dispute relating to re-fixation of Annual capacity Rs.900000 Plus equal amount of penalty plus interest thereon. Honb'le High Court of Madras.
TNVAT Dispute relating to Input Tax Credit Rs 25635950/- plus penalty of Rs. 1768920/- plus interest thereon of Rs. 1791031/- Commercial Tax Officer Chennai / Honb'le High Court of Madras.
TNVAT Income tax Act 1961 Income Tax Rs.45982174 Assessing Officer
Income tax Act 1961 TDS Rs.295000 Assessing Officer

(viii) In our opinion and according to the information and explanationsgiven to us as at the reporting date the Company has not defaulted in repayment of loansor borrowings to any financial institution or a bank or Government or dues todebenture-holders. The company has not taken any loans from the Government.

(ix) The company has not raised moneys by way of initial public offeror further public offer (including debt instruments) or Term Loan during the year. Hencereporting under clause (ix) of the CARO 2016 are not applicable.

(x) To the best of our knowledge and according to the information andexplanations given to us no fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the period covered by our audit.

(xi) Based upon the audit procedures performed and the information andexplanations given by the management Managerial remuneration has been paid and providedby the Company in accordance with the requisite approvals mandated by the provisions ofSection 197 of the Act read with Schedule V to the Act.

(xii) in our opinion and according to the information and explanationgiven to us the Company is not a Nidhi Company. Therefore the provisions of clause 3(xii) of the Order are not applicable to the Company.

(xiii) in our opinion and according to the information and explanationsgiven to us the Company is in compliance with Section 188 and 177 of the Companies Act2013where applicable for all transactions with the related parties and the details ofrelated party transactions have been disclosed in the ind AS Financial statements.

(xiv) Based upon the audit procedures performed and the information andexplanations given by the management the company has not made any preferential allotmentor private placement of shares or fully or partly convertible debentures during the yearunder review. Accordingly provisions of clause 3(xiv) of the Order are not applicable.

(xv) Based upon the audit procedures performed and the information andexplanations given by the management the company has not entered into any non-cashtransactions with directors or persons connected with him covered under section192 of theAct. Accordingly the provisions of clause 3 (xv) of the Order are not applicable to theCompany.

(xvi) In our opinion the company is not required to be registeredunder section 45 lA of the Reserve Bank of India Act 1934 and accordingly the provisionsof clause 3(xvi) of the Order are not applicable to the Company.

Annexure B to the Independent Auditor's Report of even date to themembers of Kanishk Steel Industries Limited on the standalone Ind AS financial statementsfor the year ended 31st March 2020

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 over financialreporting (IFCoFR) of Kanishk Steel Industries Limited (the "Company") as ofthat date in conjunction with our audit of the stand alone Ind AS financial statements ofthe Company for the year ended 31 st March 2020.

Management's Responsibility for Internal Financial Controls

The Company's Board of Directors is responsible for establishingand maintaining 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 (the "Guidance Note") issued by the Institute of CharteredAccountants of India (ICAI). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of the Company's business includingadherence to Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sIFCoFR with reference to these standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and Standards on Auditing asspecified under section 143(10) of the Companies Act 2013 to the extent applicable to anaudit of IFCoFR 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 IFCoFR with reference to these 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 IFCoFR with reference to these standalone financial statements andtheir operating effectiveness. Our audit of IFCoFR included obtaining an understanding ofIFCoFR with reference to these standalone financial statements assessing the risk that amaterial 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 judgement including the assessment of the risks of materialmisstatement of the 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 IFCoFR withreference to these standalone financial statements.

Meaning of Internal Financial Controls over Financial Reporting withreference to these standalone financial statements

A Company's IFCoFR with reference to these standalone 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 generaily accepted accounting principles. A Company's IFCoFR withreference to these standalone financial statements includes those policies and proceduresthat (1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorizations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the Company's assets that could have a material effect on thefinancial statements.

Inherent Limitations of Internal Financial Controls over FinancialReporting with reference to these standalone financial statements

Because of the inherent limitations of IFCoFR with reference to thesestandalone 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 IFCoFR with reference tothese standalone Ind AS financial statements to future periods are subject to the riskthat IFCoFR with reference to these standalone financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the Company has in all material respects adequateinternal financial controls over financial reporting with reference to these standalonefinancial statements and such internal financial controls over financial reporting withreference to these standalone financial statements were operating effectively as at 31stMarch 2020 based on the internal control over financial reporting criteria established bythe Company considering the essential components of internal control stated in theGuidance Note issued by the ICAI.

ForPuja Rathi &Associates
Chartered Accountants
FRN014457S
UDIN. :20064246AA44AE9927 Puja Rathi FCA
Date: 31-07-2020 Proprietor
Place: Chennai M. No. 064246

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