Orissa Sponge Iron & Steel Ltd.
|BSE: 504864||Sector: Metals & Mining|
|NSE: N.A.||ISIN Code: INE228D01013|
|BSE 00:00 | 04 Mar||Orissa Sponge Iron & Steel Ltd|
|NSE 05:30 | 01 Jan||Orissa Sponge Iron & Steel Ltd|
|BSE: 504864||Sector: Metals & Mining|
|NSE: N.A.||ISIN Code: INE228D01013|
|BSE 00:00 | 04 Mar||Orissa Sponge Iron & Steel Ltd|
|NSE 05:30 | 01 Jan||Orissa Sponge Iron & Steel Ltd|
To the Members of
ORISSA SPONGE IRON & STEEL LIMITED Reports on the Financial Statements Opinion
We have audited the accompanying IndAS Financial Statements of "M/S. ORISSA SPONGEIRON & STEEL LIMITED" (the "Company") which comprise of the BalanceSheet as at 31st March 2021 the related Statement of Profit andLoss(including Other Comprehensive Income) and the Cash Flow Statement for the year endedand the statement of changes in equity for the year then ended and a summary ofsignificant accounting policies and other explanatory information which we have signedunder reference to this report.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with the IndAS and accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2021 and Loss total comprehensive income the changes in equityand its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of the Ind ASfinancial statements under the provisions of the Companies Act 2013 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 judgement were of mostsignificance in our audit of the Ind AS financial statements of the current period. Thesematters were addressed in the context of our audit of the Ind AS financial statements as awhole and informing our opinion thereon and we do not provide a separate opinion onthese matters. We have determined the matters described below to be the key audit mattersto be communicated in our report.
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including Annexure to Board's Report Business Responsibility ReportCorporate Governance and Shareholder's Information but does not include the financialstatements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon. In connection with our audit of thefinancial statements our responsibility is to read the other information and in doingso consider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. 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.
Responsibilities of Management and those charged with governance for the Ind ASfinancial statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income change in equity andcash flows of the Company in accordance with the Indian Accounting Standards (Ind AS) andaccounting principles generally accepted in India specified under section 133 of the Actread with the 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 appropriateimplementation and maintenance of accounting policies; making judgments and estimates thatare reasonable and prudent; and design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Ind AS financial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the Ind AS financial statements management is responsible for assessingthe Company'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.
Auditor's Responsibilities for the Audit of Ind AS Financial Statement
Our objectives are to obtain reasonable assurance about whether the Ind AS 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 Ind AS financial statements.
A further description of the auditor's responsibilities for the audit of the Ind ASfinancial statements is included in Annexure A. This description forms part of ourauditor's report.
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 subsection (11) of Section 143 ofthe Companies Act 2013 we give in the Annexure B a statement on the matters specified inParagraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Companies Act 2013 we report that: a) We havesought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit; b) In our opinionproper books of account as required by law have been kept by the Company so far as appearsfrom our examination of those books; c) The Balance Sheet the Statement of Profit andLoss and 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 Ind ASfinancial statements comply with the Indian Accounting Standards specified under Section133 of the Act. e) On the basis of written representations received from the directors as on 31st March 2021 and taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2021 from being appointed as a director interms of subsection (2) of Section 164 of the Companies Act 2013; f) With respectto the adequacy of the internal financial controls over financial reporting of the Companyand the operating effectiveness of such controls refer to our separate report in"Annexure C"; g) With respect to the other matters to be included in theAuditors Report in accordance with the requirements of section 197(16) of the Act asamended: In our opinion and to the best of our information and according to theexplanation given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provision of Section 197 read with Schedule V of theCompanies Act 2013; and h) With respect to the other matters included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our knowledge and information and according to theexplanation given to us:-i) The Company has disclosed the impact of pending litigations onits financial position in its Ind AS Financial Statements Refer Note 39 to the IndAS Financial Statements; ii) The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses. iii) There hasbeen no delay in transferring amounts required to be transferred to the InvestorEducation and Protection Fund by the Company
Annexure A: Responsibilities for Audit of Financial Statement
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 Ind AS 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company 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 Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe Ind AS financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
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 Ind AS financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverseconsequences of doing so would reasonably beexpected to outweigh the public interest benefits of such communication.
Annexure - B to the Auditors' Report
ADDITIONAL INFORMATION ANNEXED TO THE INDEPENDENT AUDITORS' REPORT
As required by the Companies (Auditor's Report) Order 2016 issued by the Company LawBoard in terms of section 143(11) of the Companies Act 2013 and on the basis of suchchecks as we considered appropriate and as per the information and explanations given tous during the course of audit we further state that: (i) In respect of theCompany's fixed assets:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. (b) The Company has a program ofverification to cover all the items of fixed assets in a phased manner which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. Pursuant to the program certain fixed assets were physically verified by themanagement during the year. According to the information and explanations given to us nomaterial discrepancies were noticed on such verification.
(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds provided to us we report thatthe title deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name of the Company as at the balance sheet date. In respect ofimmovable properties of land and building that have been taken on lease and disclosed asfixed assets in the financial statements the lease agreements are in the name of theCompany.
(ii) The inventory has been physically verified during the year by the management. Inour opinion the frequency of verification is reasonable.
The discrepancies noticed on verification between the physical stocks and the bookrecords were not material.
(iii) The Company has not granted any secured/unsecured loan to Companies Firms orother parties covered in the register maintained under section 189 of the Companies Act2013. Therefore the provisions of sub clause (a) (b) and (c) to clause 3 (iii) ofCompanies (Auditors' Report) Order 2016 are not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.
(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from public.
Therefore the provisions of clause 3 (v) of the Companies (Auditors' Report) Order2016 are not applicable to the Company
(vi) Maintenance of cost records has been prescribed by the Central Government undersub section (1) of section 148 of the Companies Act 2013 and the company has accordinglyappointed cost auditor for the same.
(vii) (a) The Company is generally regular in depositing undisputed statutory duesincluding Provident Fund Employee's State Insurance Income Tax Sales Tax Service TaxCustom Duty Excise Duty Value Added Tax Goods and Service Tax Cess and any otherstatutory dues applicable to it with the appropriate authorities. No undisputed amountspayable in respect of aforesaid dues were outstanding as at 31st March 2021 for a periodof more than six months from the date they became payable.
(b) According to the information and explanations given to us and on the basis of ourexamination there are no material disputed dues on account of Sales Tax Service TaxCustom Duty Excise duty Value Added Tax Goods and Service Tax and any other statutorydues that have not been deposited with appropriate authorities on account of any disputeexcept the followings:
(viii) In our opinion and as per information and explanations given to us the Companyhas not defaulted in repayment of dues to bank and financial institutions and it has nottaken any loan from Government and debenture holders.
(ix) In our opinion and according to the information and explanations given to us themoney raised through term loans were applied for the purposes for which they were raised.The Company has not raised any money through initial public offer or further publicoffering including debt instruments.
(x) In our opinion and according to the information and explanations given to us nosignificant fraud by the Company and on the Company by the officers or employees wasnoticed or reported during the year.
(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid or provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Hence the provisions of clause 3(xii) of the Companies(Auditors' Report) Order 2016 are not applicable to the Company.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with related parties are incompliance with Section 177 and 188 of the Act where applicable and proper disclosureshave been made in the Financial statements as required by the applicable accountingstandards (xiv) In our opinion and according to the information and explanations given tous the Company has not made any preferential allotment or private placement of shares orfully or partly convertible debentures during the year. Accordingly the provisions ofclause 3(xiv) of the Companies (Auditors' Report) Order 2016 are not applicable to theCompany.
(xv) In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transactions with the directors or personsconnected with the director. Accordingly the provisions of clause 3 (xiv) of theCompanies (Auditors' Report) Order 2016 are not applicable to the Company.
(xvi) In our opinion the Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934 and hence the provisions of clause 3 (xvi) of theCompanies (Auditors' Report) Order 2016 are not applicable to the Company.
Annexure - C to the Auditors' Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of M/s. ORISSASPONGE IRON & STEEL LIMITED ("the Company") as of 31 March 2021 inconjunction with our audit of the Ind AS financial statements of the Company for the yearended on 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 Reportingissued by the Institute of Chartered Accountants of India (ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
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 on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.